Last November, TrustToken announced its plans to build an uncollateralized lending protocol using blockchain, powered by the native TRU cryptocurrency and TUSD dollar-backed stablecoin. This new network, TrueFi, enables users to request a TUSD-based loan with zero collateral for vetted borrowers and TUSD lenders to earn an attractive annual percentage yield (APY) while simultaneously farming TRU.
Most DeFi dApps focused on lending have built collateralized lending platforms; TrueFi is attacking a sector that so far remains underserved, allowing for long term and competitive returns for its users. This has attracted the likes of Alameda Research, Invictus Capital, and other reputable companies that have tapped into TrueFi for loans.
TrueFi recently released its project roadmap. Let’s take a look under the hood to see what TrueFi has planned for this year.
What to Expect from TrueFi in 2021
The TrueFi roadmap for 2021 breaks down into four distinct phases, with Phase 1 already completed. Phase 1 started in November 2020 to launch the finished first version of the TrueFi Protocol (V1) and the issuance of TRU tokens. With the implementation of the V1 mainnet, institutional investors can begin onboarding to the platform through KYC/AML regulated accounts and sign legally enforceable loan agreements with TrustToken Inc as the counterparty.
After assessing these newly verified borrowers via a borrow request on TrueFi, they can begin to request smaller loans, usually between $1-2 million. Once the borrowers establish their reputation and a record of repaying their debts, they can request larger loans, like the $10m that’s been loaned to Alameda Research.
With V1’s successful launch, ending Phase 1, we head to Phase 2 to see what TrueFi is working to produce next.
Phase 2: Staking Model Enhancements and On-Chain Governance
Planning a release on February 19, Phase 2 is the next step for TrueFi. This phase will introduce Liquid Exit to improve the lender experience, improve the overall staking model to grow TRU utilization, and launch full on-chain token governance.
Liquid Exit is being introduced based on a community-wide request to exit the TrueFi Lending Pool directly into the asset the lender used to fund the pool. This will only be available with TUSD to start, but TrueFi has plans to include other cryptocurrencies like USDC, ETH, and BTC in the future.
The current process relies on Uniswap as a facilitator; the Liquid Exit addition will enable the Lending Pool to act as the liquidity provider and buy TFI-LP tokens in exchange for TUSD.
TrueFi is upgrading its staking model to add more evident user utility for its TRU token. Instead of having to stake on individual loans, stakers will be able to deposit funds within the protocol directly. This simplifies the process, as protocol stakers will not be required to rate individual buyers, although it will still be in their best interest to do so. Stakers will earn fees from borrowers based on loan generation and accrue TRU tokens from staking.
Phase 3: More Tokens and a Robust Credit Model
Phase 3 will be launched on or before May 20, adding many new capabilities to the TrueFi platform. One of the main goals is to add other USD-backed tokens into the ecosystem, specifically USDC. USDC is the largest fully collateralized dollar-pegged stablecoin, so its introduction will enable a larger portion of the DeFi community to use TrueFi.
Institutional TrueFi borrowers have asked to introduce a line-of-credit option, a product the team wants to include in this phase. The TrueFi community still needs to determine the time frame of borrowers’ repayments and if the loan inDeFinitely compounds, but the proposal’s basics are already available to view.
To become a leading lending platform, TrueFi needs to be at the top of the industry in terms of assessing risk. TrueFi plans to accomplish this by introducing off-chain data onto its protocol to add better multivariable analysis to its platform. This strengthened analytical method will include information on legal jurisdiction, assets under management (AUM), leverage, options exposure, and more to help creditors determine lending viability.
The final addition of Phase 3 is to make all loan tokens individually tradable, creating the possibility for other dApp developers to integrate these tokens into their protocols and applications, increasing each token’s usability.
Phase 4: Widespread Usage Leads to Greater Functionality
By August 18, with the completion of Phase 4, TrueFi should already be widely used and adopted according to the roadmap. From this phase and moving forward, the main goals of development will be to focus on interoperability with other protocols and digital assets. TrueFi plans to add support for as many ERC20 tokens as possible, creating pools for tokens such as Wrapped Bitcoin (WBTC) and Wrapped Ether (WETH).
TrueFi also wants to allow liquidity on all loan and line of credit tokens, enabling other protocols to loan tokens and lines of credit as primary funding mechanisms. Beyond its stated roadmap, TrueFi will also be considering layer two scaling options and protocol-to-protocol lending.
As TrueFi progresses, there is a lot to look forward to from the platform and TRU token. If everything goes according to plan, TrueFi may accomplish its culminating goal of becoming the most widely adopted and most trusted protocol for uncollateralized lending.