If you owe 100 USDC at maturity, the obvious assumption is simple: you need 100 USDC to close the debt.
But @TermMax made me look at that assumption differently.
TermMax’s FT represents the fixed-rate side of the debt and can trade before maturity. If an FT is available below its face value, a borrower has another calculation to make: could buying the discounted FT be cheaper than sourcing the debt token directly?
That’s what I find interesting.
The FT isn’t simply something you hold until maturity. Its tradability creates a secondary-market price, which can change the economics of how a debt position is managed.
So the bigger idea isn’t simply that TermMax offers fixed rates.
Separating the economics of a debt position can create additional ways to manage the same obligation.
The question I’m watching is whether secondary liquidity becomes deep enough for that flexibility to matter in practice.
@TermMax #TermMax #USJoblessClaimsFallTo206000
But @TermMax made me look at that assumption differently.
TermMax’s FT represents the fixed-rate side of the debt and can trade before maturity. If an FT is available below its face value, a borrower has another calculation to make: could buying the discounted FT be cheaper than sourcing the debt token directly?
That’s what I find interesting.
The FT isn’t simply something you hold until maturity. Its tradability creates a secondary-market price, which can change the economics of how a debt position is managed.
So the bigger idea isn’t simply that TermMax offers fixed rates.
Separating the economics of a debt position can create additional ways to manage the same obligation.
The question I’m watching is whether secondary liquidity becomes deep enough for that flexibility to matter in practice.
@TermMax #TermMax #USJoblessClaimsFallTo206000
