Since the launch of TrueFi V2 in February 2021, which delivered an enhanced staking model and liquid exit, DeFi's first unsecured lending protocol has continued to reach significant milestones through lending, borrowing, and product.
TrueFi generated around $105 million in collateral-free loans across 27 loans and enjoyed a 100% repayment rate. The platform has drawn 15 of the industry's top institutions as active borrowers, with hundreds of new borrowers still under review, while strengthening borrower due diligence with Phase 1 credit model launch.
These loans have provided nearly $1 million in returns (not including TRU incentives) for lenders and stakeholders in the form of origination fees and interest charged on loans, with an average 14 percent APY and 49-day average.
Borrowing expansion has attracted over $100m in total locked value (TVL), consisting of approximately $75m in lending pool assets as well as ~30% of all TRU staked, comprising around 70 million locked TRU tokens supporting the TrueFi network as a default backstop.
At the same time, TrueFi has undergone major product and UX improvements; has collaborated more closely with the DeFi ecosystem through integration with Chainlink, Sushiswap, and other top crypto protocols; and increased protocol transparency with the launch of our Dune Analytics dashboards and TRU treasury transparency supported by top accounting partner Armanino LLP.
TrueFi's next series of updates occurs on May 20, 2021, with TrueFi V3 launch, delivering a new credit scoring system & opening the USDC pool with 2x rewards.
TrueFi V3: Credit Model & Multi-Asset Support
V3 arrives with two incredibly important protocol upgrades: TrueFi credit model implementation and multi-asset support beginning with USDC. These two advances unlock enormous potential for both TrueFi and DeFi.
New: TrueFi-Model
TrueFi's credit model represents a new DeFi building block that is on track to evolve into one of DeFi's most trustworthy borrower creditworthiness reference points, integrating both on-chain and off-chain data and optimised for use throughout other protocols.
At launch, TrueFi whitelisted borrowers based on a detailed Know Your Business (KYB) workflow and selected for long-standing, valued crypto-native institutions, finally processing loans based on TRU staker group approval. The V1 process allowed Alameda Research, Poloniex, and Wintermute to borrow millions of dollars from TrueFi lenders.
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TrueFi V3, however, relies on feedback from a credit model that aggregates a variety of new factors to generate a TrueFi creditworthiness score from 0 to 255, shown publicly on borrower profiles (example: Folkvang):
Company history, including enforcement, legal, accounting and regulatory health, and corporate structure analysis
Repayment history, beginning with TrueFi and extending afterwards
Operating & Trading Background, both crypto and conventional financial experience
Assets under management, including asset forms and custody
Credit metrics, including asset coverage, liquidity and risk exposures
Many elements of this credit model are used with TrueFi borrowers today. With V3's launch, the TrueFi credit model will play an even greater role in setting new loan terms.
Although still primitive today, the credit model will continue to evolve by adding new information sources such as centralised exchange details, on-chain history through other protocols, and the TrueFi protocol's ongoing development.
TrueFi credit's grand vision is a composable, industry-accepted, decentralised gauge of creditworthiness, pulling both on-chain and off-chain data while protecting borrower privacy, to nuance crypto