L2 cost reduction's pressure effect on the fixed interest rate curve.
Today, I saw @TermMaxFi's daily active wallet reach a new high of 3028, U vault APY over 20% with an additional 120x XP.
Many people only look at the returns, while I am thinking that if the roadmap goes as planned, Ethereum, Arbitrum, multi-chain expansion, App V2 plus Order Aggregator, and then cross-chain liquidity will require a complete redraw of the fixed interest rate curve.
In the past, gas fees were high, and many who claimed to be doing fixed-rate trading had little capital movement. When placing orders, adjusting ranges, and rolling positions, after calculating fees, not much is left; it's not that they can't, but that it's not cost-effective.
L2 has pushed down gas fees, and the biggest change is the threshold. In the past, a few hundred dollars felt like working for fees, but now small funds are starting to enter the market, orders have become more frequent, and the curve is being priced by more people.
I have been monitoring several curves, with the short end flattening first; new money is trying short-term investments first, and as orders increase, the interest spread gets eroded. The middle segment is lively, with curators adjusting quotes more frequently; ordinary people feel like interest rates are fluctuating, but in fact, there are more players involved. The long end is slow; it doesn't consume gas and relies on asset quality and trust, and only when these stabilize will it grow.
A key step is the Order Aggregator. In Q1 2026, App V2 will go live, allowing users not to choose pools themselves, with the system automatically seeking optimal paths. At that point, competition changes; it's about whose curve is more stable.
All interest rates are laid out on one table; whoever provides a credible curve has the advantage. If it stabilizes, it could become a reference on-chain.
Low gas fees also have side effects. With more small orders, curve fluctuations are evident. The threshold has lowered, and more and more people treat it as a high-yield product, especially in a bull market.
Recently, I've rolled a small position in L2; gas fees are less of a barrier, and operations have become much simpler. When costs are not an obstacle, the market will see who is seriously pricing.
This is where I will stop for now. In the next article, I will discuss whether the Order Aggregator will smooth out the individuality of single pools and whether the TermMax curve will become an on-chain coordinate system after cross-chain integration.
By then, DeFi fixed income will be different. Do you prefer opportunities with large spreads, or a more stable capital market structure?
#TermMax #DeFi #FixedRateDeFi #L2