TrueFi –Cryptoverse AMA Recap

Date : 26th April 2021

Guest - Ryan Rodenbaugh : Business Development & Strategy

Q: Please briefly introduce yourself and #TrueFi to our community?

A: My name is Ryan (@ryanrodenbaugh on twitter, telegram, etc.) and I lead business development and strategy for TrueFi.

TrueFi is a protocol for credit and collateral-free lending. So far we’ve originated over 100mm USD worth of loans and have on boarded many top borrowers in crypto .Prior to launching TrueFi, we also launched the TUSD stable coin along with some other tokenized currencies (THKD, TAUD, TCAD, TGBP)

Q: As you point out, much of DeFi’s growth is due to lending platforms, but since TrueFi was launched in November, has DeFi seen an improvement with its unsecured loans? if not yet, really when will it be?

A: We’re still very early in Defi unsecured lending. I think all of the borrowers that we work with have been very happy with this development.

Overall, I actually don’t think that the market has taken a ton of notice though.

For the time being, all yields in DeFi are so high (whether because of crazy demand or because of yield farming) that people barely even notice that our unboosted yields are 13–18% . I think once we start to onboard more borrowers and make some improvements with how fees are paid to stakers that people will start to notice more.

Q: TrueFx has a basket of very interesting stable coins. My question is, what are the mechanisms they have developed to prevent the depreciation of their stablecoins over time? Is it possible that, even though they are stable coins, they generate yield and benefits to their holders?

A: Well, each of these currencies (THKD, TAUD, TCAD, TGBP etc.) could definitely go down in value if the underlying currency crashed. So far example if GBP/USD crashed, then TGBP would also crash relative to its dollar value.

It’s possible that these currencies could be supported for yield on TrueFi or other platforms, however that means that there would need to be people willing to borrow these currencies and pay a yield on them. Right now, I don’t think a lot of people actually want THKD, TGBP, etc. That’s why we haven’t seen much growth yet. Most traders and borrowers in crypto want dollars, not yet other tokenized currencies.

The one exception is Celsius Network. Which does pay yield on some of the non-USD coins.

Q: Much of DeFi current success has been based onbuilt on collateralized lending, why did TrueFi decide to offer uncollateralized lending? What is the reason for this decision and how do users benefit from it?

A: This is a bit of a long answer. The process of how we wound up at TrueFi and uncollateralized lending came from our experience with TUSD.

At some point, as TUSD was losing in the market to USDC, we were thinking about what we could do to remain competitive. We considered if we could make tusd so that it wasn’t just collateralized with USD, but also with BTC. However, we would not be able to do this.

At the same time, we also had many firms coming to us wanting to borrow TUSD, but we weren’t able to lend it to them.

Then, we saw the success of Compound and decided that uncollateralized lending would be the next step. We then spent summer and fall of 2020 sprinting to build TrueFi before finally launching in November.
Users benefit from having consistently higher average rates than on the interest rate protocols.

Q: What is the ultimate goal of trufi? What is the plan to turn it into a global phenomenon in defi’s lending platform?

A:
Over time, our vision for TrueFi has quickly grown (I’d say) beyond just lending.

Lending is a big market! And as I say on the second slide there, we plan to be the biggest on-chain unsecured lender.

But beyond that, we think we’re capturing very useful data about each of our borrowers and that ultimately we’ll be able to become a provider of on-chain ‘credit scores’.

in an ideal world, other lending protocols would be able to use those scores as well to make more informed decisions about their borrowers as well.

Q: What was the latest features you are built from taking community feedbacks?

A: So the #1 next thing we’re adding is support for USDC. Right now you can only borrow and lend TUSD and since USDC is much bigger than TUSD we hope this will lead to a lot of growth.

And much longer roadmap here:

Q: What are your priorities for 2021 ? Do you have any roadmap?

A:

Q: Staking programme is very important for any project, Can i stake your token? Do you have any plan of starting staking programme?

A: Yes, staking is one of the most important parts of TrueFi. Without staking, TrueFi doesn’t work.

Stakers protect the protocol from defaults and are also paid 100% of fees.

Q : Is your platform suitable for Crypto beginners?Or does it only limited for professional users?Is your platform suitable for Crypto beginners?Or does it only limited for professional users?

A: On the lender side, anyone can lend and from a UI perspective, I think it’s actually very suitable for beginners.

On the borrower side, only vetted institutions can borrow

Q: Let’s imagine that the borrower is still unable to repay the loan and the court proceedings take a very long time, how will the losses be reimbursed to the creditors? Do you have a special fund (SAFU) to cover losses?

A: Yes, we recently established a SAFU fund so that lenders can be made whole in the short-term.

About 10mm TRU tokens are currently committed to the SAFU and we are trying to figure out other ways to grow the SAFU fund over time.

Q: What is the role of token in the ecosystem? Where can users currently buy it, and what would be its use?

A: Right now, the token is used for staking (protecting the protocol, voting on loan requests, earning fees) and governance .

You can acquire TRU on Uniswap, Binance, FTX, Sushiswap, and other venues.

Q: DeFi is great. But for DeFi, the gas fee is crazy high on Ethereum. So, any plan to move on BSC or other layer-2 solution?

A: $TRU is supported on BSC as of very recently, but this is only for trading.

Q: Are you planning to promote your project in countries / regions where English is not good? Do you have a local community for them to better understand your project?

A: We just hired someone for China. I think after that, we will target Korea and Russia.

Q: Do you have plans for burning of TRU token? Or buyback program?

A: We could formalize burns within the protocol, however right now we’ve chosen to instead give 100% of fees to stakers. We made this decision since we want people to stake and ultimately burning tokens rewards passive token holders, whereas we want to reward stakers the most.

Q: Why DeFi? Do you think decentralized finance can outperform centralized financing? What are the DeFi values of TrueFi?

A: Good question! I think the most powerful thing that makes TrueFi better than something like e.g., BlockFi is that lenders can repurpose the collateral.

For example, when you lend TUSD to TrueFi you receive back tfTUSD which (like cTokens from Compound) is a token where the value goes up as the protocol accrues more interest. You can then take tfTUSD and use it as collateral at another protocol so that you can get more value for your tusd.

Now, the challenge of course is that it’s tough to lend stablecoins to truefi than to lend to Blockfi because BlockFi has a sleek mobile app and TrueFi lives on Ethereum (and defi is tough for everyday people).

We’re aware of this and investigating both :

(a) partnering with nice DeFi wallets to make depositing easier.

(b) maybe even building a mobile app of our own to streamline the process.

https://blog.trusttoken.com/mitigating-risk-truefis-loan-default-process-454359a8c4b

In Conclusion

Once more: every investment that offers return, also carries risk. The best type of risk to take on is risk one both understands well, and can ideally mitigate. We hope this post helps all TrueFi users and TRU holders understand their exposure — and hopefully, invites them to make suggestions on how to make TrueFi even safer, more lucrative, and appealing for new lenders and borrowers.

Tell us what you think about the risks and returns of TrueFi on Twitter or our Discord today — we’re looking forward to your ideas!

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