TrueFi is an uncollaterized lending DeFi Protocol, powered by TRU. The protocol allows lenders to lend out funds to vetted borrowers, earning commissions or interests as rewards. The protocol is powered by TRU. TrueFi is owned and run by TrustToken, a company whose aim is to “free money to move to wherever it creates the most value – instantly”. TrustToken is regarded as the makers of the world most transparent stable coins including TUSD.
TrueFi is designed and implemented to disrupt the loan access and issuance by democratizing access and control, giving both lenders and borrowers mutual access, transparency, security in transactions and more control in decision making.
TrueFi was launched in November 2020 and has since hit the $1.1 billion mark in Total Value Locked (TVL) and over $500 million in loan generation with zero defaults. TrueFi lenders have now earned over $4 million in interest from prepaid loans on the TrueFi protocol.
The age-long, traditional loan system is one that requires collateral as a precursor for granting of a loan facility to borrowers. This traditional loan system is usually organized by a central financial body – usually a financial institution like a Bank, Microfinance Bank, e.t.c – by the pooling together of funds from different depositors, without the depositors knowing when, where, and how their funds are utilized or perhaps invested.
The financial body discretionally offers what it considers appropriate as interest (gain on deposits of its customers) without the owners of the funds. The downsides of the traditional loan system are obvious – the depositors have no control over their funds and how they are loaned out, have no say on what their actual returns on deposits are and the whole process is quite not transparent.
These are what TrueFi set out to eliminate in the financial industry. The aim of TrueFi, according to Rafael Cosman, the Co-Founder of TrustToken, is “to become the ultimate market-driven, automated credit rating and lending system, freeing money to move wherever it creates the most value”.
TrueFi uniquely differs from other DeFi loan facilitating blockchain platform mainly due to its Zero-Collateral nature, away from other decentralized digital platforms that require the locking of some assets before approval of loans.
The process of TrueFi operations involve three stakeholders:
1. The Lenders who earn returns through coin lending and farming of TRU.
2. The Stakers who earn TRU as rewards for the protocol risk management system. They also earn from transactions fees generated by the protocol.
3. Borrowers are verified individuals or businesses who take loan from pool of available funds through the TrueFi platform. They pay interest which are distributed as returns for other stakeholders.
The future of TrueFi:
The future of finance is decentralized and more so loan access and issuance. TrueFi has a high potential for adoption and usage growth, giving its parent company – TrustToken – which has built an ecosystem of interconnected tools, protocol and technology. TrueFi is expected to gain more users – both borrowers and lenders – a phenomenon that is expected to drive adoption rates and usage, ultimately increasing the value of TRU to holders of this coin.