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Decentralized finance (DeFi) facilitates various types of financial transactions and applications on blockchains. DeFi projects have disrupted the traditional banking and lending worlds, and have increased in popularity considerably in recent years. Initially, those conducting financial activities on blockchain had to put up collateral in order to borrow assets. Now, however, uncollateralized lending is available, which enhances the utility of DeFi in the real world.
Traditional lending practices have relied heavily on borrowers’ credit scores, which establish the borrower’s creditworthiness and the lender’s risk of lending. TrueFi offers collateral-free lending with competitive returns for its contributing lenders, and it uniquely stands apart from other lending platforms in the DeFi space with its own credit rating system, the first one on-chain.
DeFi users who contribute their assets to borrowers benefit from full transparency of the borrowers’ credit scores, as well as their rate of return. The loans are completed instantaneously, and TrueFi borrowers benefit from low interest rates. The TrueFi project uses its native token, TRU, to complete collateral-free lending activities. TRU holders can also stake their tokens to receive a return on investment (ROI) of more than 27%. In addition, TRU holders benefit from participation in platform governance activities.
The idea of TrueFi was established in 2017. Archblock, previously known as TrustToken (which also launched the TrueUSD (TUSD) stablecoin), officially launched the TrueFi protocol in November 2020 with the goal of elevating decentralized lending and borrowing experiences through optimized transparency.
As of October 2022, TrueFi has extended unsecured loans totaling more than $1.7 billion, and has achieved a successful repayment rate of approximately 136 loans totaling $1.5 billion. In addition, those who have contributed to the TrueFi lending pool have collectively received more than $34 million in interest. TrueFi’s developers specifically designed the protocol so that it operates freely via authority granted to TRU holders. Its platform is built on the Optimism and Ethereum blockchains, and its planned developments for the future include an expansion of compatible blockchains.
The TrueFi project was established with the goal of supporting enhanced lending functions in the DeFi space. TrueFi borrowers can choose to take out a collateralized or uncollateralized loan with a competitive interest rate, and they have instant access to their borrowed funds.
More than that, TrueFi maintains optimized transparency by utilizing the world’s first DeFi credit score system to give contributors of the TrueFi lending pool a way to clearly analyze their risk. Some of the financial activities that it supports have previously only been available to wealthy individuals via traditional financing, and these financial solutions are now available to users around the world. TrueFi also supports capital efficiency, increases access to global liquidity and has several layers of risk mitigation efforts to protect lenders against default-related losses.
Those who contribute to the TrueFi lending pool are able to earn competitive returns in the form of interest, as well as TRU tokens. TrueFi offers top-notch security for loaned assets, with millions of dollars in aggregate coverage backed by the SAFU and TRU stakers. This safety net gives users comprehensive peace of mind when investing.
TrueFi has advantageous features for lenders, borrowers and portfolio managers to take advantage of, and it focuses on providing both collateralized and uncollateralized loan opportunities to meet various needs. In order to be a robust platform that fosters engagement while meeting varied investment and borrowing goals, its protocol is designed with several key features in mind.
Those who wish to use the TrueFi platform to earn solid returns through lending can review opportunities available via a portfolio manager or the TrueFi app. TrueFi lenders must complete the onboarding process before they can participate. Once onboarding has been completed, users can browse the various TrueFi portfolios that they qualify for based on their preferences for risk and return.
After they’ve selected a suitable portfolio, they may proceed to make an allocation. Settlement occurs instantaneously at any hour of the day. Lenders are able to monitor all activities related to their assets, and to view their returns through the TrueFi app. As the funds are repaid over time, lenders can withdraw their funds as desired. However, note that there are some portfolios that require users to lock up their funds for a predetermined period of time.
TrueFi makes it faster and easier for borrowers to obtain the capital they need through around-the-clock loan request processing. They can borrow against a global liquidity pool and take advantage of competitive interest rates. Through lending via the TrueFi project, borrowers are able to increase their credit rating and potentially take advantage of future on-chain capital opportunities.
TrueFi borrowers must first complete KYB and connect with portfolio managers to establish borrowing terms. Once a collateralized or uncollateralized loan request is approved, the loan is settled instantaneously. The borrower must repay the borrowed funds and related interest charges as agreed, and the loan agreement outlines the legal ramifications of not doing so.
TrueFi also allows interested parties to establish and manage their own credit fund. Specifically, portfolio managers can run a credit fund using the Ethereum blockchain (or another supported blockchain).
To get started, an interested party must pass through a vetting process and be approved by the TrueFi governance community. There will be a fundraising period for a new credit fund. This is followed by project managers reviewing borrowing requests and disbursing assets from their credit fund to approved borrowers. The TrueFi app is designed so that this process can be completed quickly and easily. Smart contracts are used to process loan repayments and to manage inflows and outflows.
TrueFi utilizes lending pools that are managed by the TrueFi DAO. Transactions are supported by tfUSDC, tfBUSD, tfTUSD and tfUSDT. Through the DAO lending pools, institutional crypto borrowers can apply for loans. Requested loans must pass the TrueFi approval process. To do so, they need to meet the minimum risk and return requirements established by the protocol.
After the TRU token launch in November 2020, development goals have progressively been met with quarterly unlocking periods for the tokens. In late 2020 and early 2021, TRU token holders were actively enhancing the platform in areas that included maximizing capital efficiency, onboarding, approving new borrowers, community governance and more.
By February 2021, upgrades were made to the protocol with a liquid exiting function. In addition, stakers were able to contribute to the overall pool, rather than to specific loans. The on-chain governance mechanism also came online at this time. The enhanced, on-chain credit rating system also debuted. Additional developments have included the introduction of tradable loan tokens and line of credit tokens for participating in liquidity pools. In addition, upcoming TrueFi developments will include increasing the platform's functionality with other protocols and assets, tranching, and specifying a period for capital allocation.
The total and maximum supply of TRU tokens is close to 1.2 billion, and the circulating supply is just under 980.9 million TRU tokens.
The tokens have been equitably distributed, with 39% applied to incentives distribution and 26.75% offered for private sale. In addition, 18.5% have been allocated toward team and management holdings. The remaining distribution includes 11.25% to the company and foundation, as well as 4.5% to the future management and team.
As of Mar 14, 2023, the TRU token is valued at $0.120. At the time of the token’s launch in November 2020, it was valued at $0.15, and the price reached $0.55 in February 2021. The all-time low price for the TRU token of $0.02638 was reached on Dec 23, 2022. The highest price thus far was on Aug 12, 2021, when TRU’s value reached $1.02.
Looking forward, experts at PricePrediction forecast that TRU’s price will steadily increase over the years. However, crypto tokens are subject to extreme volatility on a day-to-day basis, even if the overall trend is upward. By the end of 2023, the token’s price may hit $0.18, followed by $0.36 in 2025. By the end of 2028, TRU may be valued at $1.10. In addition, the price may reach $2.29 by 2030.
Experts at DigitalCoinPrice share the same sentiments as those of PricePrediction, but are less bullish in the long term. They believe that TRU’s price will reach $0.25 by the end of 2023 and $0.42 in 2025. TRU’s predicted growth is projected to be slower in the following years, reaching $0.64 in 2028 and $1.21 in 2030.
If you’re interested in trading TRU, numerous platforms offer the token, one of which is Bybit. When using Bybit, TRU is available via perpetual contracts. To get started with trading TRUUSDT Perpetual Contracts on Bybit, simply sign up for a Bybit account, fund it and navigate to the TRUUSDT Derivatives Trading page.
Given the volatility of cryptocurrencies in general, an investment in TRU tokens can be risky. To avoid losses related to day-to-day volatility, a longer holding period may be advisable in order to optimize profitability. To benefit more substantially from TrueFi, consider participating in its lending and staking applications. The platform has built-in protocols to minimize risk, and it offers competitive returns. That said, it’s important that you do your own research before investing in any altcoins, including TRU.
While there’s nothing new about decentralized lending, TrueFi stands apart with its collateral-free lending opportunities. It also supports borrowing, around the globe, with reasonable interest rates and instantaneous loan funding. Whether you’re interested in earning a stable return as a lender or you simply need to borrow assets, TrueFi is a solid DeFi project that deserves a closer look.
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