In the blockchain social field, projects have sprung up like mushrooms after rain, and each emerging platform is trying to leave its mark in the Web3 world. Recently, TrueFi, as a new type of credit protocol, has attracted widespread attention. According to Lookonchain monitoring, an important news recently appeared: a large account withdrew 14.43 million TRU worth $2.45 million from Binance and pledged it on the TrueFi platform. This move not only highlights TrueFi's influence in the field of digital assets, but also reflects the market's recognition of its potential.
TrueFi is more than just a credit protocol. It recently launched the US dollar-based TRI token, which aims to promote the real-world asset trading market. This innovation has injected new vitality into TrueFi, making it a highly anticipated player in the digital asset field. As market demand grows, TrueFi is redefining the rules of the credit market through its unique protocols and innovative products.
However, as TrueFi develops rapidly, it also faces many challenges. In this highly competitive field, how to maintain continuous innovation and user trust, as well as how to cope with market fluctuations and changes in the regulatory environment, will be key issues that TrueFi needs to overcome in its future development.
Next, this article will deeply analyze TrueFi’s current market strategy and challenges, and explore its potential and prospects in the Web3 social field.
Background information of the RWA track:
In the DeFi field, the RWA (Real World Assets) track, as the forefront of the digitization of traditional financial assets, is rapidly attracting a combination of capital and technology. At present, the global RWA market size has exceeded billions of dollars and is expected to grow further in the next few years. According to the latest data and industry analysis:
Market size growth: The market size of the RWA track has grown from approximately US$1 billion at the end of 2021 to more than US$3 billion at the beginning of 2023. This growth is mainly due to the continuous advancement of blockchain technology and the increasing demand for digital asset management and lending transparency worldwide.
Lending market potential: The lending market in the RWA track is developing rapidly. According to analysis, the annual growth rate of the RWA track lending market has reached more than 50% by 2023. This reflects the growing desire of asset owners and capital providers for more efficient and transparent lending opportunities.
Industry trends and challenges: Although the RWA track shows great growth potential, its development still faces challenges in regulatory uncertainty, asset audit complexity, and security. With the continuous improvement of technology and legal frameworks, these challenges have been gradually alleviated, promoting wider market adoption and investment.
Overall, the booming development of the RWA track in the DeFi field reflects the profound impact of blockchain technology in the traditional financial field. As a representative of the RWA track, TrueFi's lending protocol has successfully processed millions of lending transactions. As of 2023, the TrueFi platform has attracted capital from different regions around the world and provided efficient and secure lending solutions for borrowers and lenders.
With the promotion and innovation of platforms such as TrueFi, the RWA track will continue to be an important channel to attract global capital into the blockchain and inject new impetus into the progress and innovation of the future financial market.
Understand the TrueFi project from various dimensions:
1. Introduction to TrueFi and its unique advantages:
TrueFi is a modular on-chain credit infrastructure that connects lenders, borrowers, and portfolio managers through smart contracts and is governed by $TRU. It is a DeFi unsecured lending protocol developed by the TrustToken (now renamed Archblock) team, aiming to provide infrastructure for the digital asset credit market.
TrueFi seamlessly connects lenders, borrowers, and portfolio managers using smart contracts managed by the TRU token. Lenders can borrow cryptocurrencies at predictable lending rates without requiring collateral like platforms such as Aave, Compound, and Venus.
2. Advantages of the unsecured lending model
Compared with the traditional over-collateralized lending model, TrueFi provides a more flexible and widely applicable solution. Traditional DeFi lending platforms usually operate in an over-collateralized manner, which means that borrowers need to provide collateral far exceeding the loan amount, resulting in low asset utilization and increased risk of liquidation. In addition, over-collateralization requires borrowers to hold a large amount of crypto assets, which is not friendly to non-circle users.
TrueFi's unsecured lending uses a decentralized autonomous organization (DAO) model to achieve credit assessment. Borrowers submit loan applications, which are reviewed by the TrustToken team and whitelisted. TRU token holders then vote to decide whether to lend money. This model not only reduces intermediary risks, but also uses collective wisdom to make decisions, improving the transparency and trust of the platform.
3. Highly transparent and automated lending process:
In terms of transparency, TrueFi emphasizes that all loan transaction details are publicly traceable on the blockchain, including interest rates, repayment conditions, and transaction history. This openness and transparency enhances users' trust in the platform and improves the stability and development of the overall market. At the same time, TrueFi's automated process makes loan transactions more efficient and reduces the uncertainty caused by human intervention.
4. Integrate the DeFi ecosystem and provide diversified financial options:
TrueFi also provides users with more financial options and investment opportunities by integrating multiple elements in the DeFi ecosystem, such as decentralized exchanges and stablecoins. This integration not only increases the platform's flexibility and market responsiveness, but also provides users with more capital flow channels and investment strategies. In contrast, traditional centralized lending platforms are often subject to strict market access restrictions and regulatory requirements, making it difficult to provide the same degree of financial innovation and market inclusion.
4. Financing achievements and future prospects:
In terms of financing, TrueFi's unique design and strong community support make it stand out in the DeFi field. TrueFi has successfully obtained $32.5 million in financing, showing investors' high confidence in its business model and development prospects. TrueFi aims to become a market-driven, automated credit rating and lending system, which requires going beyond strict, conservative restrictions such as minimum/maximum APY and high TRU participation factors, while requiring users to assume a higher level of responsibility, especially in terms of new borrowers outside the pre-approved whitelist and approving new loan types.
In general, TrueFi, through its decentralization, transparency, and integration, not only improves user experience and transaction efficiency, but also provides global users with a wider range of financial services and innovation opportunities. As the DeFi ecosystem continues to develop, TrueFi will continue to play an important role in promoting financial inclusion and technological innovation.
With the support of Trinity protocol and TRI token, can TrueFi achieve qualitative change?
TrueFi recently launched the Trinity Protocol, an innovative initiative to improve capital efficiency of on-chain real-world assets (RWA). The protocol uses the USD-based TRI token and is backed by collateral assets to provide users with an easy way to gain leverage and hedge risk. Interest-bearing tfBILL, a tokenized short-term U.S. Treasury bill product, is one of the first collateral assets backing TRI. In addition, other assets in TrueFi pools, RWAs from different protocols, and crypto-native assets can also be used as collateral.
The Trinity protocol allows users to mint TRI tokens on the protocol using tfBILL or other assets, and then redeem them for stablecoins through an automated market maker. Users can repeatedly mint TRI and redeem stablecoins through smart contracts, thereby achieving a net return of up to 15-20%. Another option is to exchange stablecoins for TRI and deposit them in the sTRI vault, earning fees with returns close to or higher than the Treasury bill rate. TRI tokens can also be traded on the secondary market, increasing the flexibility of user operations and the potential for earnings.
The Trinity protocol is already live on the Optimism Sepolia testnet, and will select initial users to participate after the audit is completed. TrueFi plans to launch Trinity on Coinbase’s second-layer Base network, although it will not be available to US users in the initial stage. The company noted that Base contains approximately 150,000 verified addresses, which can confirm that users are not in the United States and that institutions have been whitelisted.
Since launching its first protocol in 2020, TrueFi has continued to innovate and expand, and has issued $1 billion in loans to date. The launch of the Trinity protocol demonstrates TrueFi's ambition in the field of on-chain asset trading and provides users with more financial tools and opportunities. TrueFi's unsecured lending model uses a decentralized autonomous organization (DAO) model to achieve credit assessment. After the borrower submits a loan application, TRU token holders vote to decide whether to lend. This model not only reduces intermediary risks, but also uses collective wisdom to make decisions, improving the transparency and trust of the platform.
However, despite the strong growth and innovation potential demonstrated by TrueFi, the future of the on-chain RWA market remains uncertain. The market size has dropped from its peak in April 2022 to one-third of its current size, reflecting market volatility and challenges. Whether TrueFi can lead the way in capital efficiency improvements for RWA assets through the Trinity protocol will depend on market developments and TrueFi's performance in dealing with these uncertainties. Can TrueFi's innovations ultimately change the landscape of the DeFi market and usher in a more open, secure, and possible future? Time will tell.