AMA Summary: TrueFi x Binance
Our “Ask Me Anything” with the world’s top cryptocurrency exchange
On June 17, 2021, TrueFi co-hosted an AMA with the world’s largest cryptocurrency exchange, Binance — where TRU is trading today.
The hosts invited Michael Gasiorek, Head of Marketing, Ada Wu, China Community Lead, and Matt Kielczewski, Social Media Lead, who introduced TrueFi’s most important V3 updates, including the addition of new assets and the launch of the credit model, as well as the competitive advantages of the protocol now and in the future.
Read on for our AMA recap:
Q1: Can you explain exactly how TrueFi works?
TrueFi is a DeFi credit protocol that powers uncollateralized loans. TrueFi’s is the first and largest protocol for fixed-term, zero collateral loans, made possible through a combination of the best of centralized and decentralized finance.
It takes three players to make TrueFi work:
Vetted institutional Borrowers like Alameda Research and Wintermute Capital submit their business information and loan request, receive a credit score that sets the terms at which they may borrow, and sign a legally enforceable lending agreement in case of default.
Stakers of TRU, the native TrueFi currency, review new Borrowers for creditworthiness and provide coverage against loans in case of default (up to 10% of all staked TRU). TRU holders also govern the direction of the overall TrueFI platform.
Lenders deposit cryptocurrencies into TrueFi to earn a competitive yield, which are used to fund borrower loans, earning 8–16% base + up to 50% in TRU rewards, with full transparency of how funds are allocated. TrueFi currently supports TUSD, USDC — and USDT support launches THIS WEEK!
The overall goal is to make TrueFi the ultimate credit protocol in DeFi, with the ability to move money wherever it creates the most value — instantly.
You can learn even more about TrueFi in our lite paper (has videos and graphics, too):
Q2. You mentioned the crypto-native credit model. How does that work?
TrueFi launched the first crypto-native, on-chain credit scores last week, with the goal of creating a new way of assessing creditworthiness with crypto borrowers. The model provides an objective TrueFi credit score that is publicly displayed in the borrower’s profile by gauging a number of on-chain and off-chain factors, with a score ranging from 0 (for no data) to 255 (the top possible score), and future plans to integrate with other DeFi lending markets.
The scoring model’s assessment criteria include:
- Company Background, including compliance, legal, accounting, and regulatory health, as well as review of corporate structure
- Repayment History, starting with TrueFi and eventually expanding beyond it
- Operating & Trading History, considering both crypto and traditional finance experience
- Assets Under Management, also considering the types of assets and their custody
- Credit Metrics, including asset coverage, leverage, liquidity and risk exposures
The credit model, while still rudimentary today, will continue to improve with the addition of new information sources like centralized exchange data, on-chain history across other protocols, and ongoing lending activity with the TrueFi protocol — and it’s already dictating the terms of TrueFi loans today!
The grand vision for TrueFi credit is a composable, industry-accepted, decentralized gauge of creditworthiness, pulling in both on-chain and off-chain data while respecting borrower privacy, to bring nuance to crypto finance across protocols.
We describe the credit model design in detail in our V3 announcement here:
Q3. Unsecured lending seems like it carries risks. What happens in case of default?
All investing carries risks. TrueFi makes the risks of using our platform very transparent, and has an explicit, multi-step plan in case of the primary type of risk: loan default.
To Mitigate the Lending Risks:
- Borrowers we onboarded go through a thorough risk assessment workflow, and are selected for longstanding, respected businesses.
- Staked TRU protects lenders, with up to 10% of the total staked value serving as “insurance” against any loan default. Over 30% of the circulating supply of TRU is currently staked, providing more than $3m protection.
- Defaults are subject to legal action, pursuant to the lending agreement signed by borrowers before they can submit loans.
4. SAFU Fund: To protect lending pool depositors against default, the SAFU fund is now funded with +5 million TRU and is being integrated into the default response. We’ll be formally announcing it in V4.
To date, we’ve enjoyed a 100% repayment rate, across over 25 loans (some still outstanding) in the last 6 months — all without collateral.
You can learn a LOT more about how we respond to defaults here:
Q4. Tell us, what has TrueFi accomplished since launch?
TrueFi has been thriving since our launch just 6 months ago — across product development and utility, partnerships, and community governance.
Traction:
- $+250 m Total Locked Value
- Originated almost $200 m unsecured loans — 0 default
- Existing borrowers like Alameda Research, Wintermute Trading, Poloniex with dozens of new borrowers being onboarded.
Check real time data here:
Major Product Improvements:
- New Asset support (USDC; followed by USDT this week)
- The world’s first crypto-native credit model to set terms on loans
- Improved staking model that better rewards TRU participants,
- Improved exit liquidity for lenders
Partnership and Key Listing:
- Centralized Exchanges: Binance, FTX, Gate.io — and many more
- DEXs: Sushiswap (with Onsen rewards) & Uniswap
- Transparency: Chainlink & Armanino
Our biggest partnerships are yet to be announced :)
Community: across Telegram, Twitter, and Discord, we’re proud to have tens of thousands of followers, and also hundreds of creators, writers, major influencers, contributing developers, security professionals, and governance contributors actively contributing to the protocol’s growth.
We hope you’ll join us on Telegram or Discord.
Q5. What’s next for TrueFi?
We’re proud to have launched TrueFi V3 just this month, and we’re already planning our next two major updates:
Update 4 will include the official launch of the TrueFi “SAFU” or Backstop Fund, which will further protect lenders against default, as well as lines of credit, which will dramatically improve capital utilization of our lending pools as well as borrower experience.
By Update 5, we expect to be deep into progressive decentralization, which will allow us to move even more power to our community, while also letting us launch new tradable loan tokens.
Along the way, we’ll also be launching new assets, lending pools, improving the product UI/UX, tweaking the credit model, onboarding dozens of new borrowers, launching options for private borrower applications, and announcing a few major new partnerships. This should all happen in the next 3–4 months.
To track everything we’re doing as it happens, it’s best to follow us on Twitter: you won’t miss anything at https://twitter.com/trusttoken
Q6: How can folks get started with TruefI?
💻 Start using TrueFi app today: https://app.truefi.io/dashboard
💸 Also, for users who want to start trading and staking today, you can get TRU on Binance (TRU/BTC, TRU/USDT & TRU/BUSD), FTX (TRU/USD & TRU/USDT), Poloniex (TRU/USDT & TRU/BTC), Gate.io (TRU/ETH) & (TRU/USDT), MXC (variety of pairs and incentives), Sushiswap (TRU/ETH), Uniswap (TRU/ETH) and more.
Check the full listing information here:
You can also find our token economy blog here:
🇨🇳 In Chinese : https://weibo.com/ttarticle/p/show?id=2309404646662080692842#_0
📚 In English: https://blog.trusttoken.com/truefis-tru-token-economics-7facea6651c0
For more information, please follow:
Website: https://truefi.io/
Twitter: https://twitter.com/TrustToken
Medium: https://blog.trusttoken.com/
Weibo (CN) : https://weibo.com/truefi
💬 Last but not least, please join our WeChat group by adding ‘TrueFi_Global’ on WeChat.
