TrueFi Integrates Chainlink Price Feeds to Further Secure Zero-Collateral TUSD Loans
First Use Case: Protecting TUSD Lenders and TRU Stakers From Outsized Losses
Launched in November 2020, TrueFi has now served almost $100m of zero-collateral TUSD loans to leading firms like Alameda Research, Wintermute Trading, and Invictus Capital, accomplishing a 100% repayment rate. While we have achieved great success thus far, we are committed to further enhancing TrueFi as one of the safest protocols in the industry for obtaining capital-efficient loans, making it even more attractive to borrowers and lenders alike.
One of the key ways we are hardening the TrueFi platform is through an expansion of our integration with market-leading oracle solution Chainlink, particularly to ensure that asset prices used by TrueFi match global asset prices as aggregated from across the wider market.
Chainlink is already being used by TUSD for its Proof of Reserve functionality, which enables DeFi applications to automatically verify on-chain that each TUSD stablecoin is backed 1:1 with US dollars held in reserve. Given its successful implementation, it’s only natural to expand our Chainlink integration to secure TrustToken’s second act, TrueFi, via support from Chainlink’s highly accurate, available, and tamperproof price oracles.
TrueFi is using the Chainlink Price Feeds on mainnet to determine the current price of TrueFi’s native token, TRU, relative to TUSD and ETH if the smart contract needs to execute automated coverage of loan defaults.
Learn more about the integration below:
How will the TRU Price Feeds be used?
With more capital demand every week from borrowers migrating to the TrueFi platform, it’s more important than ever to make TrueFi the best possible platform for lenders. As such, one of TrueFi’s biggest initiatives in Q2 is limiting the downside from a potential loan default through the launch of a community “SAFU” fund and V2 staking.
A key mechanism to serve both lenders and stakers in TrueFi V2 is TRU liquidation. If a loan defaults, TRU stakers will be partially liquidated (at a maximum of 10% of the staked TRU pool) to help make the affected lending pool whole.
Accurate price feeds are critical to triggering liquidations that accurately reflect the current fair market exchange rates of TRU/TUSD. Additionally, the TruFi platform partially compensates users for their gas fees via TRU tokens, also requiring a secure and up-to-date source of the TRU/ETH exchange rate.
Why TrueFi Chose to Integrate Chainlink Price Feeds
To ensure that stakers on the TrueFi platform are not falsely liquidated due to inaccurate data and lending pools are adequately covered, we require the highest quality price data and the most secure and reliable oracle solution. An oracle is a digital agent employed by a smart contract to connect it with off-chain data, particularly by fetching such data from external connection points called Application Programming Interfaces (APIs).
TrueFi’s smart contract platform now uses Chainlink oracles to access aggregated price data from various premium API data providers. These Price Feed oracles will not only support the TrueFi platform during TRU liquidations, but they can be leveraged by the wider DeFi ecosystem to support TRU as a form of collateral/payment option in their dApp, further increasing TRU’s utility.
We selected these Chainlink Price Feed oracles because they are built upon a time-tested and battle-hardened framework, which already secures over $10 billion in value on mainnet for numerous top DeFi protocols. Some of the key features of Chainlink Price Feeds include:
- High-Quality Data — All Chainlink Price Feeds source data from numerous professional data aggregators, leading to consumption of global market prices that reflect a volume-adjusted aggregate of all trading environments.
- Secure Nodes — All Chainlink Price Feeds are secured by decentralized oracle networks made up of independent, security reviewed node operators run by experienced blockchain and DevOps teams, mitigating both downtime and Sybil-attacks.
- Decentralized Network — Chainlink Price Feeds are decentralized at the oracle and data source level, resulting in high uptime and manipulation resistance in the sourcing and delivery of external price data on-chain.
- Transparent On-Chain Data — Each Chainlink Price Feed is accompanied by open visualizations and reputation frameworks derived from on-chain data, enabling anyone to independently audit the performance of oracle networks.
“We’re excited to integrate Chainlink because we know that oracles are one of the most critical parts of any DeFi application,” says Rafael Cosman, CEO of TrustToken. “A custom built oracle with an imperfect design can open the door to a disastrous attack. This is why many top protocols are choosing Chainlink, a team that’s laser focused on solving the oracle problem as well as possible using premium data, secure nodes, and verifiably decentralized infrastructure.”
In Conclusion
While we’re excited for what V2 has brought, we believe the best is yet to come. Our TrueFi 2021 Roadmap remains the best place to prepare for the next iterations of TrueFi — and if you’d like to get involved in creating it, please follow TrueFi on Twitter and join the growing global TrueFi community on Discord.
As we integrate with more technology and expand our reach to new partnerships, we believe TrueFi will continue to become a key part of DeFi infrastructure.
About TrustToken
TrustToken frees money to move to wherever it creates the most value — instantly.
TrustToken’s TrueFi platform brings uncollateralized lending on-chain, offering borrowers fast, fixed-rate loans with zero collateral requirements, and lenders competitive, transparent rates on stablecoin deposits. TrueFi is governed by TRU holders, who have processed almost $100m of unsecured loans to borrowers like Alameda Research and Wintermute Trading, with no defaults. TrueFi is recognized as a top 10 on-chain lending platform by DeFi Pulse with +$50m in TVL.
Our TrueCurrencies (TUSD, TGBP, TAUD, TCAD, THKD) are the world’s most transparent stablecoins. Each is fully collateralized, attested live on-chain, now moving billions in monthly trade volume across over 100 trading partners including Binance, Huobi, and OKEx. TUSD users enjoy lighting-fast transactions, easy minting and redemptions, and obsessive customer service.
About Chainlink
Chainlink is the most widely used and secure way to power universally connected smart contracts. With Chainlink, developers can connect any blockchain with high-quality data sources from other blockchains as well as real-world data. Managed by a global, decentralized community of hundreds of thousands of people, Chainlink is introducing a fairer model for contracts. Its network currently secures billions of dollars in value for smart contracts across the decentralized finance (DeFi), insurance and gaming ecosystems, among others.
Chainlink is trusted by hundreds of organizations to deliver definitive truth via secure, reliable data feeds. To learn more, visit chain.link, subscribe to the Chainlink newsletter, and follow @chainlink on Twitter.
