I kept digging into @TermMax fixed-rate model and there’s a tension nobody’s really addressed: fixed rates solve your uncertainty, but they shift the uncertainty onto the protocol.
When you lock a rate, someone downstream — the LP, the reserve — is now exposed to the spread between what you’re paying and what floating markets do next. That’s not free, it’s priced in somewhere.
So the real question isn’t “is 2% cheap or expensive.” It’s: who’s absorbing the volatility risk you just opted out of, and are they compensated enough for it at scale?
#termmax $BTW
When you lock a rate, someone downstream — the LP, the reserve — is now exposed to the spread between what you’re paying and what floating markets do next. That’s not free, it’s priced in somewhere.
So the real question isn’t “is 2% cheap or expensive.” It’s: who’s absorbing the volatility risk you just opted out of, and are they compensated enough for it at scale?
#termmax $BTW