# Two-Way Range Order Setter A **two-way range order setter** on TermMax is a user who places a **single range order** with two pricing curves: one for **borrowing rates** and the other for **lending rates**. This allows the two-way order setter to act as both a borrower and a lender simultaneously within the same market. By setting a **lower rate on the borrowing curve** and a **higher rate on the lending curve**, the two-way order setter earns the spread when borrowing market takers and lending market takers fill the order. ## **How It Works** A two-way range order setter follows these steps to place the range order: 1. **Choosing a Market:**\ The two-way range order setter selects a specific fixed-rate market, which includes the following predefined parameters: * **Debt Token:** The asset to borrow or lend (e.g., USDC). * **Collateral Token:** The asset to lock as collateral for borrowing (e.g., ETH). * **Maturity Date:** The time when loans mature, borrowers must repay, and lenders can redeem their yields. * **Maximum Loan-to-Value (MLTV):** The maximum LTV ratio for borrowing, ensuring loans are over-collateralized. * **Liquidation Loan-to-Value (Liquidation LTV):** The LTV threshold at which collateral will be liquidated to protect lenders. 2. **Specifying Two Pricing Curves:**\ The two-way order setter configures two separate pricing curves for their range order: * **Borrowing Curve:** Specifies the rates the two-way order setter is willing to pay to borrow debt tokens, with **lower rates to minimize borrowing costs**. For example, 3–5%, with higher rates applying to the initial portion matched and lower rates applying to subsequent portions. * **Lending Curve:** Specifies the rates the two-way order setter is willing to offer to lend debt tokens, with **higher rates to maximize returns**. For example, 6–8%, with lower rates applying to the initial portion matched and higher rates applying to subsequent portions. By maintaining a spread between the borrowing and lending curves, the two-way order setter ensures a profit margin when both curves are taken by market takers. 3. **Placing the Order:**\ The two-way range order is placed on the TermMax platform, where it remains active until fully matched or the maturity date is reached. Borrowing market takers fill the **lending curve**, and lending market takers fill the **borrowing curve**. The two-way order setter adjusts dynamically between borrowing and lending based on market activity. ## **Two-Way Mechanics** Once the two-way range order is placed, the process proceeds as follows: 1. **Order Matching for Borrowing (Borrowing Curve):** * When a lending market taker fills the borrowing curve, the two-way range order setter becomes a borrower. The process proceeds as follows: 1. **Minting FT and XT:**\ The debt token provided by the lending market taker is used to mint an equivalent amount of **FTs** (representing the debt) and **XTs**. 2. **XT Exchange:**\ The **XT** is sold to the two-way range order for exchanging **additional FTs**. 3. **FT Reserve Check:** * If the two-way range order has sufficient **FT reserves**, the exchanged FT is transferred from the range order. * If the **FT reserve is insufficient**, the additional FTs are minted from the two-way order setter’s **Gearing Token (GT)**. This increases the **debt recorded in the GT**, reflecting the additional borrowing by the two-way order setter. * The two-way order setter can use the borrowed debt tokens for further investment, trading, or other purposes. 2. **Order Matching for Lending (Lending Curve):** * When a borrowing order setter fills the lending curve, the two-way order setter becomes a lender. The process mirrors the lending mechanics: 1. Borrowing market takers lock collateral in their GT and issue FTs to represent the debt. 2. The **interest part of FTs** is sold to the two-way range order in exchange for XTs. 3. The two-way order setter receives: * **Interest FTs** representing the fixed yield. * **Principal FTs**, which were minted into the lending curve when the two-way range order was placed, representing the loan principal. 3. **Dynamic Role Adjustment:** * The two-way order setter’s role adjusts dynamically based on which curve is matched: * If the borrowing curve is filled, the two-way order setter becomes a borrower and accumulates debt in their GT. * If the lending curve is filled, the two-way order setter becomes a lender and accumulates FTs for yield. 4. **At Maturity:** * **As a Borrower:** The two-way order setter must repay the debt recorded in their GT by either repaying debt tokens directly or purchasing FTs from the market and returning them. * **As a Lender:** The two-way order setter redeems their accumulated FTs for debt tokens at maturity. ## **Example: Alice as a Two-Way Order Setter** 1. **Choosing a Market:** * **Debt Token:** USDC * **Collateral Token:** ETH * **Maturity Date:** 1 year * **Maximum LTV (MLTV):** 80% * **Liquidation LTV:** 85% 2. **Specifying Two Pricing Curves:**\ Alice places a two-way range order with the following parameters: * **Borrowing Curve:** 3–5%, with **higher rates (5%) for the initial portion matched** and **lower rates (3%) for subsequent portions**. * **Lending Curve:** 6–8%, with **lower rates (6%) for the initial portion matched** and **higher rates (8%) for subsequent portions**. 3. **Order Matching:** * **Borrowing:** * A lending market taker lends **1,000 USDC** to Alice’s borrowing curve. * **Minting FT and XT:** 1,000 USDC mints **1,000 FTs** and **1,000 XTs**. * **XT Exchange:** The 1,000 XTs are sold to Alice’s borrowing curve for additional FTs. * **FT Reserve Check:** If the FT reserve in Alice’s range order is insufficient, additional FTs are minted from Alice’s GT, increasing her debt recorded in the GT. * **Result:** Alice borrows 1,000 USDC and increases her GT debt accordingly. * **Lending:** * A borrowing market taker fills Alice’s lending curve and issues FTs. * Alice receives the **interest FTs** exchanged during the match and holds the **principal FTs** minted when the range order was placed. 4. **At Maturity:** * Alice repays the debt recorded in her GT by either returning FTs or paying 1,000 USDC directly. * Alice redeems the FTs accumulated through lending (which may include the earning of spread between borrowing and lending rates). ## **Advantages** 1. **Dynamic Role Flexibility:**\ Two-way order setters can seamlessly adjust between borrowing and lending, optimizing their capital usage based on market demand. 2. **Earn the Spread:**\ By setting a **lower borrowing rate** and a **higher lending rate**, two-way range orders earn the spread between the two, creating a predictable profit margin. 3. **Capital Efficiency:**\ A single range order allows two-way order setters to leverage both borrowing and lending opportunities without maintaining separate orders. 4. **Risk Management:**\ Over-collateralization and LTV constraints protect two-way order setters from excessive risk on the borrowing side, while secured loans ensure returns on the lending side. ## **Summary** The two-way range order setter role is ideal for users seeking a dynamic, capital-efficient strategy that combines borrowing and lending in a single position. By placing a two-way range order with separate borrowing and lending curves, two-way order setters can optimize yields, control borrowing costs, and respond to market conditions without needing to manage multiple positions. This flexibility makes two-way range order a powerful tool for advanced users on TermMax. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.ts.finance/protocol-mechanisms/range-order-setter/two-way-range-order-setter.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. 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