In today's evolving crypto finance landscape, TERM Finance is gradually gaining market attention as an innovative protocol focused on solving the "impossible triangle" problem of DeFi lending,In today's evolving crypto finance landscape, TERM Finance is gradually gaining market attention as an innovative protocol focused on solving the "impossible triangle" problem of DeFi lending,

Learn/Market Insights/Event Zone/What Is TER...ng Dilemmas

What Is TERM Finance? 5 Key Features Analysis on How TERM Solves DeFi Lending Dilemmas

Author: MEXC

Jul 16, 2025MEXC

#Popular Events #Spot #Basic Concepts

In today's evolving crypto finance landscape, TERM Finance is gradually gaining market attention as an innovative protocol focused on solving the "impossible triangle" problem of DeFi lending, offering users an unprecedented borrowing experience. Whether you're an experienced cryptocurrency investor or a newcomer, understanding TERM could open new opportunities to your portfolio.

1. What is TERM Finance?

TERM Finance is a non-custodial, scalable fixed-rate lending protocol designed to bring the most fundamental financial instrument from traditional finance—fixed-rate lending—to the cryptocurrency market. Unlike other DeFi lending platforms, TERM achieves direct matching between borrowers and lenders through an innovative on-chain double auction mechanism, ensuring both parties trade at fixed rates for fixed terms without sacrificing transparency, efficiency, or security.

TERM Finance refers to the entire protocol and platform, while the TERM token is the platform's native token, similar to the relationship between Ethereum and ETH. As the core of the ecosystem, the TERM token grants holders various rights and functions.

2. Three Major DeFi Lending Dilemmas TERM Finance Aims to Solve

TERM Finance focuses on solving three core problems in the crypto lending market:

1）Lack of transparency in centralized finance (CeFi): Traditional centralized lending platforms (such as Celsius, BlockFi) lack sufficient transparency, with user assets completely controlled by centralized companies. The FTX collapse has proven the enormous risks in this model.

2）Insufficient scalability of DeFi fixed-rate platforms: Existing DeFi fixed-rate solutions are inefficient when handling large transactions, with highly volatile interest rate fluctuations and poor capital efficiency, making it difficult to attract sufficient liquidity.

3）Lack of stability in DeFi floating-rate platforms: Mainstream DeFi lending platforms (such as Aave, Compound) adopt floating rate models, where rates can surge from 5% to 20%, lacking predictability and making long-term financial planning challenging for users.

3. Five Core Features of TERM Finance

1) Innovative Double Auction Mechanism

Sealed bidding: All bids are hidden from the public through hash algorithms until market clearing.
Single price: All participants trade at the same clearing price.
Second-price mechanism: Reduces participants' incentives to submit non-true valuations.
Proportional allocation: Prioritizes the lowest-cost suppliers and the most willing borrowers.

2) Non-Custodial Fixed-Term Lending

Fixed-term, fixed-rate lending model.
Non-recallable: Neither party can terminate the contract early during the loan period.
Collateral-backed: All loans are backed by liquid digital assets.
Non-custodial architecture: Collateral locked in smart contracts, verifiable in real-time.

3) Efficient Capital Utilization

Funds are locked only during auction periods, and unsuccessful bids are immediately returned.
Single market clearing rate avoids supply-demand rate gaps.
No need for large idle funds to achieve scale.

4) Transparent Liquidation Mechanism

Clear maintenance margin rate requirements.
Smart contracts limit the amount of debt liquidators can cover.
Transparent and predictable liquidation process.

5) Enhanced Security Design

User screening mechanism ensures platform safety and compliance.
Independent Term Repo Locker design isolates collateral for different maturities and assets.
Reduces users' exposure to cybersecurity risks.

4. Main Functions of TERM Token

As the platform's native token, TERM has multiple practical functions:

1）Governance Participation: Holders can vote on important platform proposals, influencing the protocol's future development.

2）Staking Rewards: Staking TERM can earn additional rewards and more voting rights.

3）Transaction Fee Discounts: Holders enjoy discounts on platform service fees.

4）Priority Auction Participation: Holders of a specific quantity can gain special auction privileges.

5）Liquidity Provider Incentives: Incentivizes liquidity providers in the ecosystem.

6）Protocol Revenue Sharing: Through governance decisions, portions of protocol revenue may be allocated to token holders.

5. Future Development Potential of TERM Finance

From multiple dimensions, TERM Finance shows broad development prospects:

1）Product Diversification: Expected to expand its product offerings, launching more fixed-rate financial products with varying term options.

2）Asset Support Expansion: As the protocol matures, it may support more types of collateral, including tokenized real-world assets (RWA).

3）Institutional Cooperation: Its traditional finance-like characteristics have the potential to attract institutional investors, promoting integration between crypto and traditional finance.

6. How to Purchase TERM Tokens on MEXC

As a leading global cryptocurrency exchange, MEXC provides trading services for TERM tokens. Simple steps to purchase TERM:

1）Register a MEXC account: Visit the MEXC official website to complete registration and KYC verification.

2）Deposit funds: Deposit USDT or other mainstream cryptocurrencies to your MEXC account.

3）Find TERM trading pair: Search for "TERM" in the trading area, select the TERM/USDT trading pair.

4）Place a buy order: Choose market order or limit order, confirm quantity and amount before submitting the order.

5）Secure storage: After completing the transaction, you can store TERM in your MEXC account or transfer it to a personal wallet.

Disclaimer: This material does not provide advice on investment, tax, legal, financial, accounting, consulting, or any other related services, nor is it a recommendation to buy, sell, or hold any assets. MEXC Learn only provides information for reference and does not constitute any investment advice. Please ensure you fully understand the risks involved and invest cautiously. All investment behaviors by users are unrelated to this site.

Market Opportunity

DeFi Price(DEFI)

$0.000576

$0.000576$0.000576

-2.20%

USD

DeFi (DEFI) Live Price Chart

Hot Crypto Updates

Lighter (LIT) 2026 Price Prediction: Professional Analysis of the DeFi Rising Star's Investment Value

Meta Description In-depth analysis of Lighter (LIT) token price trends for 2026: comprehensive predictions based on technical indicators, fundamentals, market trends, and industry development. Learn

2025/12/29

MEXC Wallet: Comprehensive Web3 Asset Management Solution

MEXC Wallet positions itself as a comprehensive Web3 asset management solution that evolved from early wallet offerings into a full-featured, multi-chain self-custody platform serving millions of

2025/12/29

BENQI (QI): Comprehensive Analysis of DeFi Protocol Market Position and Investment Outlook

BENQI (QI) is a DeFi liquidity market protocol built on Avalanche focused on scalable, yield-generating products; today it trades well below prior highs, with a market capitalization roughly in the

2025/12/22

Coin98 (C98): A Comprehensive Guide to the Multi-Chain DeFi Ecosystem

1. Platform Overview and Market Position Coin98 stands as a pioneering multi-chain liquidity solution engineered to bridge the fragmentation in decentralized finance (DeFi), supporting over 22

2025/12/22

What Is TERM Finance? 5 Key Features Analysis on How TERM Solves DeFi Lending Dilemmas

1. What is TERM Finance?

2. Three Major DeFi Lending Dilemmas TERM Finance Aims to Solve

3. Five Core Features of TERM Finance

4. Main Functions of TERM Token

5. Future Development Potential of TERM Finance

6. How to Purchase TERM Tokens on MEXC

Popular Articles

When Will XRP Go Up? Technical Signals & Expert Forecasts

What Does XRP Stand For? The Complete Answer Explained

Why Is XRP Going Up? Key Drivers Behind the Rally

How to Trade TSLA Earnings Volatility: Profit from Price Swings on MEXC

Hot Crypto Updates

Lighter (LIT) 2026 Price Prediction: Professional Analysis of the DeFi Rising Star's Investment Value

MEXC Wallet: Comprehensive Web3 Asset Management Solution

BENQI (QI): Comprehensive Analysis of DeFi Protocol Market Position and Investment Outlook

Coin98 (C98): A Comprehensive Guide to the Multi-Chain DeFi Ecosystem

Trending News

Ethereum Prepares For A Breakout: Price And Open Interest Signal Imminent Volatility

MixMax & ICB Network Partner to Boost DeFi Innovation & Growth

The Bitcoin Signal Most Investors Overlook: Hash Ribbons Explain What’s Happening

An organization placed ads on Fox News opposing the DeFi provisions in the cryptocurrency bill.

Related Articles

What is Spot Trading in Crypto? Complete MEXC Guide for Beginners

What are Take-Profit/Stop-Loss Orders? Your Automated Tool for Risk Management and Profit Locking

What is Pre-Market Trading?

What is MEXC Convert?