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Overview

A conventional liquidity position is open-ended. Capital goes into a pool, a range is chosen, and the position sits there until somebody decides to unwind it. Its result is a blur: fees earned over an undefined period, against a starting point nobody wrote down.

Terma writes liquidity as a contract instead. Every position — a deployment — is created with three terms fixed at the outset: a market, a price zone, and an expiry. It earns from the trades that cross its liquidity while it is alive, and at expiry it stops on its own. Fees are settled, performance against holding is calculated, and capital becomes redeemable.

The effect is that liquidity stops being a place you park capital and becomes something you place deliberately: around a session, a weekend, an earnings window, a settlement print.

The three terms

Market

A deployment names one base/quote pair. Capital is committed to that pair only, and the sole source of fee income is flow that trades against the deployment’s own liquidity.

Zone

Liquidity is concentrated between a floor and a ceiling. Inside the zone the deployment is active and earning. Above the ceiling it has rotated entirely into the quote asset; below the floor, entirely into the base asset. In both cases it stops capturing fees until price re-enters.

A narrower zone concentrates the same capital into a smaller band of prices. That means more fee exposure per dollar while price stays inside, and faster, fuller rotation when price leaves.

Expiry

The termination time is written at creation and does not move. Nothing has to be monitored or unwound manually — at expiry the deployment ends and settles.

Lifetime

• Deploy. Capital enters the position under its three terms.
• Earn. Trades crossing the zone pay the deployment. Fee income accrues for as long as it is alive.
• Settle. At expiry the deployment stops. Fees are totalled, the closing position is valued, and the result is measured against having simply held the opening composition.
• Redeem. Capital and fees become redeemable. The result is final and belongs to one defined lifetime.

Because each deployment produces a single closed result, a history of deployments is a record of where liquidity actually worked — not an average smeared across an indefinite holding period.

Deployment shapes

Because the lifetime is a term rather than an afterthought, a deployment can be written around a window. The examples below are structures, not live markets, and carry no yield or performance claim.

• Earnings week. A wide zone on a single name, expiring at the end of the week that contains the print.
• Weekend. A crypto pair held across the days when traditional venues are closed, expiring Monday.
• Cash open. A tight zone written for one session, expiring at the US close.
• Settlement day. An index pair around a scheduled data release, expiring at settlement.

The shape of a deployment is a choice: how wide the zone is, and how long the position is allowed to live. A short window around a known event and a broad zone held across a weekend are the same instrument written two different ways.

Fee accrual

A deployment earns only from the trades that cross its own liquidity. Two things therefore govern income: how much volume passes through the zone during the deployment’s lifetime, and how much of the pool’s liquidity at those prices belongs to the deployment.

Neither is known in advance, and Terma does not estimate them. The settlement model on this site takes fee income as an input you supply, so you can reason about a lifetime you are considering — it does not forecast one.

Settlement arithmetic

Settlement uses the standard concentrated-liquidity formulation. Write P for the market price in quote per base, and take square roots of the zone bounds:

Liquidity L is set so that the position is worth exactly the committed capital at the deployment price. At expiry the same formulas are evaluated at the closing price to give the closing composition and its value.

The result

Impermanent loss is negative whenever price has moved away from the deployment price; it is zero only if price ends exactly where it started. A deployment is ahead of simply holding when fee income exceeds that loss.

You can run these numbers against any terms on the settlement model. It is arithmetic on your inputs — no market data is involved and no outcome is predicted.

The position token

While a deployment is alive, ownership of it is represented by a transferable token. The deployment keeps running under its original terms regardless of who holds that token, and whoever holds it at expiry redeems the settled result.

That makes a live deployment a thing you can hand to someone else — a temporary liquidity position with a known market, a known zone and a known remaining lifetime.

Network

Terma targets Robinhood Chain mainnet, and only mainnet. No testnet, devnet or local network is configured anywhere in this application.

Parameters are taken from the Robinhood Chain documentation ↗. The public RPC is rate limited; a dedicated endpoint can be supplied through NEXT_PUBLIC_RPC_URL.

Risk

• Market exposure. A deployment holds both sides of a pair. Its value moves with the market and can end below the capital committed.
• Impermanent loss. Any price move away from the deployment price leaves the position worth less than holding the opening composition. Fee income may or may not cover it.
• Inactive zones. Once price leaves the zone the deployment stops earning while remaining fully exposed to the side it rotated into.
• Fixed expiry. The termination time cannot be moved. A deployment settles at its expiry whatever the market is doing at that moment.
• Smart contract risk. Deployments are on-chain contracts and carry the risks that implies.

Nothing on this site is investment advice, and no return is offered or implied.

Glossary

• Deployment — a liquidity position with a market, a price zone and an expiry, all fixed at creation.
• Zone — the price band between floor and ceiling in which the deployment’s liquidity is active.
• Expiry — the termination time at which the deployment stops and settles.
• Settlement — the closing calculation: fees captured, impermanent loss, net against holding, redeemable value.
• Net vs holding — fee income plus impermanent loss. The figure that says whether the deployment beat doing nothing.
• Position token — the transferable representation of ownership of a live deployment.