#termmax @TermMax
TermMax runs two products side by side — fixed-rate lending through FTs and GTs, and TermMax Alpha, an options market for leveraged directional bets. I used to assume both carried the same basic risk shape, just aimed differently.
Here is the part that sat with me once I compared the actual numbers.
Lending's return is fully pre-determined. The docs give a clean example: 110 FT-USDC redeems for 110 USDC at maturity, so buying it for 100 USDC locks a 10% annual return the moment the trade settles. The only risk underneath that fixed number sits in the GT — if collateral value breaches the market's LLTV threshold, liquidation happens regardless of the FT's promised yield.
TermMax Alpha works on a different premise. Going Long means buying a call, Short means buying a put, against a counterparty the docs call Dual Investment — effectively the option seller on the other side of every position. Max loss is defined as the premium paid, called Max Cost in the docs, and that's the ceiling on downside no matter how far price moves against the position.
That reframed the comparison for me. A 10% locked FT return is real, but it's bundled with collateral risk sitting elsewhere in the same system. Alpha's leveraged bet has no such bundling — the tradeoff for a capped, known loss is that the position's execution depends entirely on Dual Investment being present as counterparty.
Where I actually land: one product fixes the return and exposes you to collateral health, the other fixes the loss and exposes you to counterparty presence. #TermMax
Which risk model do you prefer?
TermMax runs two products side by side — fixed-rate lending through FTs and GTs, and TermMax Alpha, an options market for leveraged directional bets. I used to assume both carried the same basic risk shape, just aimed differently.
Here is the part that sat with me once I compared the actual numbers.
Lending's return is fully pre-determined. The docs give a clean example: 110 FT-USDC redeems for 110 USDC at maturity, so buying it for 100 USDC locks a 10% annual return the moment the trade settles. The only risk underneath that fixed number sits in the GT — if collateral value breaches the market's LLTV threshold, liquidation happens regardless of the FT's promised yield.
TermMax Alpha works on a different premise. Going Long means buying a call, Short means buying a put, against a counterparty the docs call Dual Investment — effectively the option seller on the other side of every position. Max loss is defined as the premium paid, called Max Cost in the docs, and that's the ceiling on downside no matter how far price moves against the position.
That reframed the comparison for me. A 10% locked FT return is real, but it's bundled with collateral risk sitting elsewhere in the same system. Alpha's leveraged bet has no such bundling — the tradeoff for a capped, known loss is that the position's execution depends entirely on Dual Investment being present as counterparty.
Where I actually land: one product fixes the return and exposes you to collateral health, the other fixes the loss and exposes you to counterparty presence. #TermMax
Which risk model do you prefer?
Collateral-based (lending)
50%
Premium-capped (Alpha)
0%
Depends on strategy
50%
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