#termmax @TermMax
if my TermMax debt says 1,000 USDC getting rid of it should cost 1,000 USDC. that Was my assumption going in.
theres a Gearing Token sitting there holding the collateral and the debt. the Number says 1,000. maturity hasnot moved. hard thing to argue with.
except the debt isnot really denominated in USDC. it denominated in FT.
and FT trades.
so if 1,000 FT is what settles that position at maturity and the market is Selling FT at 950 right now why would i hand over 1,000 USDC instead of buying the claim and returning that?
turns out you can. the docs say it plainly buy FT on the open market return it against the GT debt settles collateral comes back. TermMax even published a walkthrough with real Numbers. closing through the UI returned 19.58 USDC. doing it manually with FT returned 19.95. about 1.89% better on a small position roughly $18,900 on a million.
so thats the part i had backwards. nothing shrank. the obligation stayed Exactly where it was. what moved was the price of the instrument that discharges it.
but heres what i missed on The first pass and its the whole thing:
that position was opened around 7% and closed when lending was near 15%. FT was cheap because rates had run past the rate locked in. if rates had gone the other way FT would be Trading at or above face and this trick would just be a worse way to repay.
which means it isnot a discount. its a rate view.
the fixed part was always the obligation. the market price of buying your way out of it was never fixed and was never Supposed to be. TermMax is also folding this into the UI so it picks the cheaper path automatically which quietly ends it as an edge for anyone paying attention manually.
still turning over whether thats a good thing. the manual version Rewarded people who understood what they were holding.
@TermMax #TermMax
if my TermMax debt says 1,000 USDC getting rid of it should cost 1,000 USDC. that Was my assumption going in.
theres a Gearing Token sitting there holding the collateral and the debt. the Number says 1,000. maturity hasnot moved. hard thing to argue with.
except the debt isnot really denominated in USDC. it denominated in FT.
and FT trades.
so if 1,000 FT is what settles that position at maturity and the market is Selling FT at 950 right now why would i hand over 1,000 USDC instead of buying the claim and returning that?
turns out you can. the docs say it plainly buy FT on the open market return it against the GT debt settles collateral comes back. TermMax even published a walkthrough with real Numbers. closing through the UI returned 19.58 USDC. doing it manually with FT returned 19.95. about 1.89% better on a small position roughly $18,900 on a million.
so thats the part i had backwards. nothing shrank. the obligation stayed Exactly where it was. what moved was the price of the instrument that discharges it.
but heres what i missed on The first pass and its the whole thing:
that position was opened around 7% and closed when lending was near 15%. FT was cheap because rates had run past the rate locked in. if rates had gone the other way FT would be Trading at or above face and this trick would just be a worse way to repay.
which means it isnot a discount. its a rate view.
the fixed part was always the obligation. the market price of buying your way out of it was never fixed and was never Supposed to be. TermMax is also folding this into the UI so it picks the cheaper path automatically which quietly ends it as an edge for anyone paying attention manually.
still turning over whether thats a good thing. the manual version Rewarded people who understood what they were holding.
@TermMax #TermMax
