Introducing TermMax - Leveraged Yield Vault with Pendle’s PTs

tl;dr

• TermMax is a platform that allows users to earn higher fixed-rate yields by leveraging Pendle's Principal Tokens (PTs).
• It caters to three types of users: Degens (risk-takers), Farmers (stable return seekers), and LPs (liquidity providers).
• Users can deposit ETH or stablecoins to earn at a fixed rate and withdraw anytime via AMMs.
• The platform offers unique features, including one-click leverage, fixed rates, and early exit options through AMMs.
• TermMax will launch on Arbitrum and Ethereum and potentially expand to other EVM chains based on market demand.

What is the TermMax? 

TermMax allows users with varying risk profiles to earn higher fixed-rate yields by leveraging Pendle’s Principal Tokens (PTs), with the flexibility to exit anytime.

For those unfamiliar with Pendle’s PTs,  below is the explanation from the issuer itself:

Principal Token (PT) represents the principal portion of an underlying yield-bearing asset. Upon maturity, PT can be redeemed at 1:1 for the accounting asset. This is the base, principal asset deployed in the underlying protocol such as Lido, Renzo, and Aave (e.g., ETH in stETH, ETH in ezETH, and USDC in aUSDC, respecitvely).

Since the collective value of its yield component has been separated, PT can be acquired at a discount relative to its accounting asset. Assuming no swaps, the value of PT will approach and ultimately match the value of accounting asset on maturity when redemption is enabled.”

Now, back to the TermMax. TermMax caters to three types of users:

• Degens: Risk-takers willing to accept liquidation risks to earn higher, fixed yields.
• Farmers: Users who prefer stable, fixed returns with minimal risk.
• LPs (Liquidity Providers): Those who mint tokens on the platform and provide liquidity for Degens and Farmers in exchange for transaction fees.

Users can deposit ETH or stablecoins like USDC/USDT and earn without minimum deposit requirements. Whether you’re a degen or a farmer, you can withdraw your assets anytime—even before the PT’s maturity—through the vault’s AMM. However, slippage may occur. 

TermMax will be launched on Arbitrum and Ethereum and expand to more EVM chains based on market demand.

How Does TermMax Work

At launch, only the Term Structure team can create vaults. As the system matures, we plan to make vault creation fully permissionless. 

Each vault will have predefined parameters like fee rates, underlying PTs, an underlying token, and leverage settings. Once the vault is created, LPs can deposit the underlying token to mint a set of tokens, which they then reinvest into the vault for farmers and degens, akin to how LPs behave on Pendle. 

Farmers and degens can deposit into the vault and automatically start earning yields. For example, if a Degen deposits assets into a vault, the vault will borrow 9x the deposited amount from LP’s liquidity with a fixed rate to purchase pre-defined PTs, resulting in 10x leverage. Conversely, Farmers can take loan agreements from LPs to earn a fixed return while freeing up the capital for LPs, which can be further used to serve Degens in the following. In other words, leverage is made possible through the liquidity supplied by LPs and, indirectly, by farmers. Meanwhile, Farmers enjoy low-risk, fixed returns, protected by a liquidation process that prioritizes them over degens. 

In simpler terms:

• Farmers earn yields from degens’ borrowing fees.
• Degens earn yields from the leveraged returns on the underlying PTs.
• LPs facilitate these transactions and earn transaction fees.

For more technical explanation, please visit our doc.

What Makes TermMax Unique? 

Three characteristics make TermMax stand out. 

One-click Leverage

Instead of looping back and forth on money markets, TermMax enables users to create a leveraged position with PTs in one go, saving gas fees and creating a better user experience.

Fixed Rates

Unlike many similar solutions that use variable rates, TermMax offers fixed rates. This means users don’t have to constantly monitor changes in borrowing rates that could make their positions unprofitable.

Early Exits

Users can exit their positions anytime through our AMMs instead of waiting for maturity. Worried about slippage? No problem—you can also set limit orders to control your trades.

Ready to be Yield Amplified?

We'd love to hear your thoughts while we’re still building TermMax! Join our Discord to share your thoughts, or follow us on X to stay tuned. 

Can’t wait to try out the product? Leave your email here to try it before anyone else. Who knows. Maybe there might be extra rewards for the early depositors. 👀