User Roles
TermMax supports several key user roles, each with distinct functions and motivations.
Market Maker
Skilled managers who configure and update AMM pricing curves, or range orders, to borrow or lend at their preferred rates on selected markets. TermMax administrators periodically create new selectable markets. Market Makers use their own funds to place orders and must be whitelisted by the TermMax admin. Market makers are categorized as follows:
Borrowing Market Maker: Seek collateralized borrowing at fixed rates. These market makers use borrowed assets for leveraging or other profitable activities.
Lending Market Maker: Seek fixed returns with isolated collateral risks to earn interest from borrowers.
Two-Way Market Maker: Seek to both borrow and lend at fixed rates to profit from the spread between these rates.
Curator
A specialized type of whitelisted market maker who, in addition to configuring and updating AMM pricing curves, performs the following key functions by gathering liquidity from Liquidity Providers:
Vault Creation: Create a vault for Liquidity Providers to provide liquidity, which is then used to execute orders based on the curator's strategy. Profits generated are shared with liquidity providers.
Vault-Based Order Management: Update range orders and place orders through the vault.
Cross-Market Liquidity Deployment: Curator can deploy a single vault's liquidity across multiple markets using the same debt tokens, increasing capital efficiency by allowing multiple markets to share the same pool of lent assets.
Liquidity Provider
Users who stake assets in vaults created by curators. They earn a share of the vault's profits, including transaction fees and fixed-rate yields and other incentives, proportional to their contribution and the vault's overall performance. Liquidity providers also assume the risk of potential losses within the vault.
Example
Liquidity providers supply liquidity to TermMax's vault and earn a share of transaction fees, yields and incentives. They have flexibility in liquidating positions and can adapt strategies based on market conditions.
Example (this example will be deprecated after we release a new version):
Alice provides liquidity to the Bob Vault on TermMax by depositing USDC and receives proportional shares in return. She earns transaction fees from trades occurring in the pool, as well as incentives offered by the platform. If Alice wishes to exit her position, she can redeem her lp-XT and lp-FT tokens for XT and FT tokens and then swap them back into USDC, or redeem the LP tokens for USDC directly. This flexible exit strategy allows her to access her funds whenever she chooses.
By participating as an LP, Alice benefits from transaction fees and incentives, enhancing her returns. She also has the flexibility to adjust her holdings based on interest rate trends or market conditions, optimizing her investment strategy.
Borrower & Lender
Users who borrow or lend on TermMax. Each market offers a variety of range orders placed by market makers, enabling borrowers and lenders to select the most favorable rates under different market conditions.
Borrower example
Borrowers can collateralize their idle or valuable assets to obtain leverage or profit from interest rate differentials by borrowing at lower rates and lending at higher rates.
Example:
Alice owns PT-sUSDe-27DEC2024 tokens that she doesn't want to sell but wishes to leverage. She collateralizes her PT-sUSDe-27DEC2024 on TermMax to borrow USDC at a low interest rate. Alice then uses the borrowed USDC to purchase more PT-sUSDe-27DEC2024 or other yield-bearing assets, effectively increasing her exposure and potential returns. Alternatively, she can lend the borrowed USDC at a higher rate by purchasing FTs, profiting from the difference between the borrowing and lending rates.
Lender example
Fixed-income farmers aim for predictable and stable income. By purchasing Fixed-rate Tokens (FTs) at a discount and redeeming them at maturity, they secure fixed returns over a specified term.
Example:
Bob prefers low-risk investments and wants to earn steady income on his 5,000 USDC. The current annual interest rate for FTs maturing on 27 December 2024 is 15%. Therefore, Bob can purchase FTs at a discounted price calculated based on this interest rate.
Bob buys the FTs for approximately 4,347.83 USDC (5,000 USDC / (1 + (0.15 × 1))). At maturity on 27 December 2024 (Assuming 1 year time to maturity for simplicity), he redeems the FTs for the face value of 5,000 USDC.
Moreover, TermMax's flexible liquidation mechanism provides Bob with added security. If a borrower defaults and their collateral is only partially liquidated, Bob receives a proportional share of the collateral, such as PT-sUSDe-27DEC2024, through physical delivery. This ensures that his investment is protected, and he still benefits from the underlying assets even in adverse situations.
Leverager
Users seeking high-return leverage opportunities on TermMax are leveragers. Leverage can be applied to both fixed and variable rate markets. For example, using fixed-rate yield-bearing Principal Tokens (PTs) issued by Pendle Finance as collateral generates fixed leveraged yields.
Example
Degens are investors seeking to amplify their returns by leveraging their positions. By purchasing Gearing Tokens (GT), they can achieve higher yields without engaging in complex looping strategies.
Example:
Alice has 1,000 USDC and wants to maximize her returns on yield-bearing tokens. Instead of performing multiple transactions to loop her assets, she buys a GT on TermMax. This GT represents a leveraged position where her USDC is used to acquire additional yield-bearing tokens, such as PT-sUSDe-27DEC2024. Through the GT, Alice benefits from amplified yields due to the embedded leverage, all while simplifying the process and managing her liquidation risk through the platform.
Summary
TermMax caters to a diverse range of participants in the DeFi space:
Degens can easily leverage their investments with GTs with one click at low gas fees.
Fixed-income farmers secure stable returns with FTs and are protected through physical delivery in partial liquidations.
Borrowers unlock the value of their assets without selling them.
Lenders act strategically to profit from interest rate differentials.
Liquidity providers benefit from transaction fees, incentives, and flexible exit strategies.
By simplifying complex financial mechanisms into accessible token transactions and offering protective measures like physical delivery of collateral, TermMax empowers users to engage in DeFi investments aligned with their goals and risk tolerance.
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