Now Migrating: TUSD Lending Pool & All TrueFi Farms [Action Required]
Here’s why, and what it means for TrueFi’s Farmers & TUSD Lenders
TrueFi is migrating all tfLP farms (tfTUSD, tfUSDC, tfUSDT), as well as the TUSD Lending Pool to a more scalable and more secure design as part of TrueFi V4, starting August 26th, 2021.
This migration will demand action from all TrueFi farmers (anyone staking tfLP on the protocol) and TUSD lenders, described in this post.
Farmers and lenders who do not migrate before November 1st, 2021 will NOT lose their funds, but may not earn the same or any benefits from their participation in the legacy farms or legacy TUSD lending pool.
Starting August 26th, 2021 complete your automated migration on TrueFi.
As part of V4, TrueFi is fast approaching its “final” core design, as originally envisioned before the protocol’s launch in 2020, complete with major scalability improvements that will allow the protocol to support any number of assets, lending pool types, and yield farms.
As part of TrueFi’s scalability efforts, V4 introduces a new framework for incentive distribution to TrueFi farms in the form of the Liquidity Gauge: a single smart contract that replaces all existing tfLP farms and handles distribution of TRU incentives. These incentives will be distributed proportional to weights (or “allocation points”) assigned to each pool by governance, making it simple to adjust both the total outgoing TRU and the rewards for each pool — from both a governance and technical perspective.
This upgrade necessitates a migration of all existing tfLP tokens from TrueFi’s current farms to the new Liquidity Gauge smart contract, which will require all TrueFi farmers to complete a migration — or in other words, approve a series of smart contract transactions that will move their assets from one smart contract address to another.
The Liquidity Gauge is now live at:
0xec6c3FD795D6e6f202825Ddb56E01b3c128b0b10
Automated tfLP Migration
On August 26th, 2021 the TrueFi app will begin to display a dynamic menu offering migration assistance to any who has connected a wallet holding tfLP tokens in legacy TrueFi farms.
By clicking “Migrate All Farms,” users will move all their tfLP tokens from all TrueFi farms into the new Liquidity Gauge, across a series of transactions. Users may also choose to migrate their funds by funds manually or transaction-by-transaction.
Please note: the migration helper does not allow a user to move only part of their tfLP tokens — it will automatically move all tfLP tokens from all farms.
TrueFi’s first ever lending pool, supporting TUSD loans, has now funded over $135 million in uncollateralized loans across more than a dozen borrowers, with zero defaults. The TUSD pool was custom-designed for the 2020 launch of the protocol and has been instrumental in TrueFi’s traction to date.
However, being the first pool of its kind, the legacy TUSD pool didn’t benefit from the design improvements launched with TrueFi V2’s lending pools (supporting USDC and USDT). TrueFi’s USDC and USDT lending pools are built in a generalizable framework that allows improvements to be made across all pools and assets at once, which offers three key benefits:
- Scalability: Modern pools can receive updates simultaneously and uniformly, including protocol-wide upgrades like the launch of TrueFI’s staking gauge or the launch of lines of credit.
- Security: TrueFi’s latest lending pools draw from a rigorously audited, generalizable design. By migrating TUSD liquidity to the new pool, TrueFi reduces its code complexity and eliminates the custom-built legacy pool as a possible vector of attack.
- Speed: TrueFi’s rate of progress is limited only by the core team’s ability to deploy safely. This means undergoing code audits before pushing protocol updates. Simplifying the codebase has the added benefit of reducing demand on audit time, leading to faster release cycles.
To take advantage of these benefits, a new TUSD pool built on TrueFi V2’s design will be launched on August 26th, 2021. In order to begin moving TUSD liquidity from the legacy pool to the new pool, TrueFi will follow these steps (all in 2021):
- Today: Stop approving loans for TUSD Pool 1 (TP1)
- On or before August 26th: New TUSD Pool is launched
- On or before August 26th: Legacy TUSD pool will closed to new TUSD deposits
- October 24: The final outstanding TUSD loan from the legacy pool is repaid
- November 1: The legacy TUSD pool & legacy tfTUSD farm is wound down
The migration is expected to complete on November 1st, 2021, with the repayment of all outstanding loans in the pool, after which the legacy TUSD pool & legacy tfTUSD farm will no longer be supported. TUSD will remain a supported asset.
Those who fail to migrate before November 1st, 2021 will NOT lose their funds, but will not be earning any benefit from their participation in the legacy pool.
[Action Required] What This Means for TUSD Lenders
Lenders to the legacy TUSD pool and farmers in the legacy tfTUSD farm should migrate their loaned TUSD and/or their staked tfTUSD before November 1st, 2021. It’s estimated this change will affect approximately 180 lenders.
Introducing one-click migration: To reduce the friction and complexity of this migration, TrueFi will offer a simple one-click migration on app.truefi.io that will request the user sign up to 6 smart contracts to do the following (TUSD lenders who haven’t staked their tfTUSD will skip steps 1–2. All users still need to confirm the transactions on MetaMask after the one-click migration order):
- Exit the legacy tfTUSD farm
- Liquid exit the legacy tfTUSD pool (liquid exit penalties will not be applied)
- Approve the new TUSD pool to deploy your TUSD
- Join the new TUSD pool
- Approve TrueFi’s new liquidity gauge, responsible for incentive disbursement
- Join the liquidity gauge
TUSD Pool Migration: Managing Reduced Liquidity
The legacy TUSD pool is currently at ~22% utilization, meaning that some of the pool’s funds are currently on loan and some lenders will not be able to leave the pool until more TUSD loans are repaid.
While over $12m will be repaid in the next 30 days (which creates an exit opportunity for lenders needing high liquidity on their TUSD, or wanting to migrate immediately), just over $17m of TUSD will remain outstanding until mid-to-late October 2021. This will reduce exit liquidity for the last lenders until the final loan is repaid on October 24th.The farm will finally be wound down on November 1st, 2021.
In order to reduce the impact of this challenge, TrueFi will:
- Remove the protocol’s liquid exit fee for those exiting legacy tfTUSD positions
- Keep the legacy tfTUSD farm open until the lending pool is wound down, so as to guarantee legacy lenders continue to receive maximum benefit from their positions — especially as they may be unable to immediately exit them
Regarding the legacy & new tfTUSD farms: once the new pool is live in the upcoming liquidity gauge, legacy tfTUSD farm rewards will be gradually turned down as rewards for the new tfTUSD farm are turned up.
For more detail about incentive adjustments to the legacy tfTUSD & new tfTUSD farms during the migration, review August 23rd’s governance discussion.
Under Discussion: Migration Gas Fees
The migration of all tfLP farms and the TUSD lending pool may introduce gas costs that, across a number of transactions in typical network conditions, may amount to as much as USD $200.
With community support, TrueFi may offer a claimable gas refund of up to a certain amount to migrating legacy TUSD lenders, drawn from the community TRU treasury. This idea remains under discussion and will need additional community support to proceed.
TrueFi is being built for scale and security. To guarantee the protocol grows as quickly and safely as possible, it’s vital TrueFi modernize the its farms, as well as bring the TUSD lending pool up to . Upgrading the TUSD will also allow future TUSD lenders to take advantage of upcoming lending pool improvements: the staking gauge in V4 (coming August 18th) and lines of credit in V5.
To originate TrueFi’s next $250m in uncollateralized loans, we need our community: migrate your liquidity now.
