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Many people think TermMax is doing fixed income, but actually it’s issuing bonds on the chain.

Recently, a lot of funds are starting to flow into the fixed interest rate market, and TermMax’s TVL is approaching 100 million USD.

But I’ve noticed that most people still don’t understand what it’s really doing.

Many protocols offering fixed returns are essentially just re-packaging floating pools like Aave and Morpho. The yields look stable, but the underlying risks haven’t changed. You have no idea who’s leveraging up or about to get liquidated in the pool.

When the market is calm, it doesn’t feel like a big deal. But once on-chain liquidity tightens, all the problems suddenly surface.

@TermMaxFi
What’s interesting is that it didn’t follow the usual logic of mixing pools. Instead, it broke down each loan and borrow separately. One collateral, one borrowed asset. Risks don’t randomly jump around in pools, and interest rates no longer fluctuate wildly with utilization curves.

How long you borrow, what the cost is, how much you get back at maturity—all are clearly defined upfront. That’s why they keep emphasizing one term: Native Origination.

Many people, when they first see the FT / GT model, think it’s complicated. But honestly, it’s just like splitting a traditional IOU into two parts.

FT (Fixed Token) is more like a zero-coupon bond on the chain.

For example, you buy it today for 0.95 USDC and get back 1 USDC at maturity. The discount in the middle is the locked-in profit. It doesn’t have a floating rate, nor does it get thrown off by sudden changes in pool utilization.

The other side, GT (Gearing Token), is the leverage certificate for the borrower. Debt, term, and repayment rights are separated out.

Borrowing and lending are truly isolated for the first time.

That’s also why I’ve been increasingly convinced that TermMax has a financial flavor. Unlike many DeFi protocols that are constantly trying to boost APY, it’s more like building a credit market on-chain.

Recently, the data from the ynETHx market is quite typical.

The underlying yield is about 4.36%, the fixed cost of borrowing WETH is around 2.53%, and the spread locked in is about 1.83%, lasting until July 31.

Many might find this low. But for those handling large funds, the biggest fear is never low returns, but waking up tomorrow to find the model suddenly broken. The issue with floating yields isn’t that you can’t make money.

It’s that you never really know if what you’re earning is actually today’s money. The true value of fixed interest rates is that they lock in time, yield, and risk together. This is very close to the logic of traditional bond markets.

So I increasingly feel that #TermMax ’s competitor might not be other DeFi lending protocols at all. It’s more like re-creating a rate market on-chain.

When more assets with terms, discounts, and clear cash flow structures start appearing on-chain, DeFi will truly begin to mature. At least, it’s no longer just about competing over who has the higher APY.