Introducing dTRINITY, a Stablecoin Liquidity Protocol on Fraxtal
SINGAPORE (June 21, 2024) — We are thrilled to announce the upcoming launch of dTRINITY, a next-generation protocol that offers discounted stablecoin loans to enhance access to liquidity and leverage for DeFi users. dTRINITY will initially focus on stablecoin yield loopers who want to amplify their strategies with low borrowing costs. Ultimately, our mission is to revolutionize the $30-billion DeFi lending market by delivering superior interest rates that are sustainable and scalable with TVL growth.
dTRINITY has been in development since Q1 2024 and will officially go live in Q3 on the Fraxtal mainnet, with follow-on expansions to Ethereum and other chains starting in Q4. The protocol is developed by Trinity Foundation Ltd., a Singapore-based non-profit public company limited by guarantee, with core project contributors including the founders of Stably and notable backers from other leading DeFi projects (TBA).
What is yield looping?
Yield “looping,” or leveraging, is a process where a DeFi user repeatedly supplies a yield-bearing asset (e.g., sFRAX) to a lending protocol and borrows stablecoins against it as collateral. The borrowed stablecoins are then used to acquire more of the yield-bearing collateral asset, effectively increasing exposure to it with leverage. This strategy is profitable if the yield generated by the leveraged collateral exceeds the interest rate (borrowing cost) of the stablecoin loans. However, there are also significant risks involved with yield looping strategies.
How does dTRINITY enhance yield looping?
dTRINITY enhances yield looping through the vertical integration of its native stablecoin (dUSD), lending protocol (dLEND), and decentralized exchange (dSWAP).
Yield-bearing collaterals can be supplied to dLEND to take out dUSD loans. Borrowing costs for dUSD are subsidized by its collateral reserve’s float income (i.e., interest income), enabling users to loop/leverage more efficiently at lower interest rates. The borrowed dUSD can also be swapped for more yield-bearing collaterals through dSWAP. Additionally, dSWAP serves as a collateral liquidation venue for dLEND positions.
What is dUSD?
dTRINITY USD (dUSD) is a decentralized US Dollar-pegged stablecoin fully backed by on-chain collateral assets. The dUSD collateral reserve consists of other stablecoins like FRAX and USDC as well as yield-bearing assets like sDAI and RWA tokens. Every dUSD is fully backed by 1 USD worth of collateral and can be minted/redeemed permissionlessly through smart contracts.
dUSD is dTRINTY’s native stablecoin and unified liquidity layer, serving as the base pair for both dLEND and dSWAP. Unlike centralized stablecoins that do not externalize the float income from their reserves, dUSD prioritizes the dTRINITY community by sharing a majority of its float income as interest rate subsidies to stimulate growth and adoption of the protocol. This approach reinforces a community-centric model where the success of protocol translates directly into enhanced value for community members as both dTRINITY and dUSD continue to scale.
What is Fraxtal?
dTRINITY will be deployed on Fraxtal as its genesis network. Created by the Frax team, Fraxtal is the first modular rollup Ethereum L2 with a native blockspace reward mechanism called Flox. This means that not only will users earn incentives on the Fraxtal network, smart contracts on Fraxtal like dTRINITY will also accrue incentives which could be redistributed to users as additional rewards later on, further enhancing their benefits.
Points Program & Roadmap
Upon mainnet launch in Q3, dUSD lenders and LPs will earn dTRINITY points for contributing stablecoin liquidity to the protocol. Accumulated points will be converted to dTRINITY’s governance tokens (TRIN) in the future. More details about the point program and the TRIN token will be announced soon.
Fraxtal testnet access for dTRINITY will be available publicly by the end of July 2024. A public bug bounty program will be announced thereafter.
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Disclaimer: dTRINITY is not available to residents of Canada, Iran, North Korea, Russia, the USA, the UK, and other restricted regions.
The information contained herein should not be considered legal, business, financial, or tax advice. Past performance is not indicative of future results. Digital assets and DeFi protocols carry significant risks, including the potential for complete loss of funds. By using dTRINITY, you acknowledge and accept these inherent risks. View our full Disclaimer and Terms to learn more about the risks involved.
