What is TRU token? TrueFi lending protocol

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15 Apr 2024

TrueFi is a lending protocol that assists lenders in earning good interest rates for borrowers without collateralizing the property.
TrueFi has introduced the Trinity protocol with the goal of enhancing the capital efficiency of real-world assets (RWAs). This new protocol utilizes dollar-backed TRI tokens, collateralized by assets, to simplify leverage acquisition and risk hedging for users.

The protocol's first collateral is the interest-bearing TfBILL, a tokenized short-term U.S. Treasury bill product. Users can collateralize tfBill or other assets to mint TRI on Trinity and exchange them for stablecoins on the automated market maker platform.

Through a smart contract called Vessel, users can mint TRI, borrow up to 92% of the loan-to-value ratio in TRI, exchange it for stablecoins, mint additional TRI, and repeat the process. Users can earn a net profit of up to 15-20%.

Alternatively, users can swap stablecoins for TRI and stake them into the sTRI vault, earning fees for yields expected to match or exceed the T-bill rate. TRI can also be traded on the secondary market.

Trinity is currently operational on the Optimism Sepolia test network, and once testing is completed, the initial user will be selected. The protocol is expected to launch with a $40 million mint TRI cap.

What is TRUEFI?

TrueFi is a decentralized lending protocol that facilitates credit services and collateral-free loans, offering benefits to both borrowers and lenders. The project aims to promote decentralized lending by providing transparent and efficient operations.

Through TrueFi, lenders can earn attractive returns without the need for borrowers to provide collateral, allowing for flexible investment strategies. Transactions on TrueFi are transparent, ensuring that all parties involved have access to relevant information throughout the process.

Wallfacer Labs, TrueFiDAO's core partner, has proposed the launch of Trinity, a platform designed to enhance the utility of TrueFi's U.S. Treasury crypto offerings. Trinity enables users to borrow crypto using crypto-backed real-world assets (RWAs) as collateral, with plans to expand features for TrueFi's Treasury bill token (tfBILL) in the future.

Under the proposed program, investors can collateralize tfBILL to borrow TRI tokens, which can then be used for DeFi strategies, offering annual yields of up to 15%. Additionally, investors can purchase TRI on secondary markets and stake it to earn borrowing fees from the platform. The proposal to launch Trinity is currently pending approval from TrueFi's decentralized autonomous organization.

In 2023, TrueFi introduced a service offering U.S. Treasury-backed crypto assets, attracting over $8.7 million in deposits.

See also: What does RWA mean? The potential of Real World Assets

The mechanism of TrueFi

The lender provides assets into the project pool through two ways:
- Use stablecoins such as USDC, USDT, TUSD, etc. to put into the lending pool and receive TRU token rewards. The unborrowed assets of TrueFi are used to provide liquidity on Curve.
- Deposit assets into Permissioned Pools—pools of other organizations.

The borrower applies for the loan, providing the required information.

TrueFi DAO conducts censorship with the support of TRU token holdersvotes. If the yes vote percentage is higher, then the loan is approved in the form of TrueUSD (TUSD).