Veteran DeFi enters the RWA track: How can TrueFi, which is constantly making big moves, break out?

In the blockchain social field, projects are springing up like mushrooms after a rain, and every emerging platform is trying to leave its mark in the Web3 world. Recently, TrueFi, as a new credit protocol, has attracted widespread attention. According to Lookonchain monitoring, an important piece of news recently emerged: a large investor withdrew 14.43 million TRUs worth US$2.45 million from Binance and pledged them on the TrueFi platform. This move not only highlights TrueFi’s influence in the digital asset field, but also reflects the market’s recognition of its potential.

TrueFi is not just a credit protocol, it has also recently launched the USD-based TRI token, aiming to promote the real-world asset trading market. This innovation has breathed new life into TrueFi, making it a high-profile player in the digital asset space. 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 continued innovation and user trust, as well as how to respond to 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 provide an in-depth analysis of TrueFi’s current market strategies and challenges, and explore its potential and prospects in the Web3 social field.

Introduction to the background information of the RWA track:

In the field of DeFi, the RWA (Real World Assets) track, as the forefront of the digitization of traditional financial assets, is rapidly attracting the combination of capital and technology. Currently, 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 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 primarily driven by continued advancements in blockchain technology and increased global demand for digital asset management and lending transparency.

Loan market potential: The loan market in the RWA track is developing rapidly. According to analysis, as of 2023, the annual growth rate of the RWA track lending market will reach more than 50%. This reflects the growing desire among 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. As technology and legal frameworks continue to improve, these challenges are gradually mitigated, 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 circuit, 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 provides borrowers and lenders with efficient and secure lending solutions.

With the promotion and innovation of platforms such as TrueFi, the RWA track will continue to become an important channel for attracting global capital into the blockchain and inject new impetus into the progress and innovation of the future financial market.

Understand the TrueFi project from all dimensions:

1. Introduction and unique advantages of TrueFi:

TrueFi is a modular on-chain credit infrastructure that connects lenders, borrowers and portfolio managers through smart contracts, and is conducted by $TRU Governance. It is a DeFi unsecured lending protocol developed by the TrustToken (now renamed Archblock) team and aims to provide infrastructure for the digital asset credit market.

TrueFi leverages smart contracts governed by TRU tokens to seamlessly connect lenders, borrowers and portfolio managers. Lenders can borrow cryptocurrencies at predictable lending rates without requiring collateral like platforms like 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 that far exceeds the borrowed amount, resulting in low asset utilization and increasing the risk of liquidation. In addition, over-collateralization requires borrowers to hold a large amount of crypto assets, which is not friendly to outside users.

TrueFi’s unsecured lending implements credit evaluation through the Decentralized Autonomous Organization (DAO) model. The borrower submits a loan application, and after being reviewed by the TrustToken team and entered into the whitelist, TRU token holders decide whether to lend or not by voting. This model not only reduces intermediary risks, but also uses collective intelligence for decision-making, improving the transparency and trust of the platform.

3. Highly transparent and automated lending process:

In terms of transparency, TrueFi emphasizes that all lending transaction details are publicly traceable on the blockchain, including interest rates, repayment terms and transaction history. This kind of openness and transparency enhances users' trust in the platform and enhances the stability and development of the overall market. At the same time, TrueFi’s automated process makes lending transactions more efficient and reduces the uncertainty caused by human intervention.

4. Integrate the DeFi ecosystem to provide diversified financial options:

TrueFi also provides users with more financial options and investments by integrating multiple elements in the DeFi ecosystem, such as decentralized exchanges and stablecoins. Chance. This integration not only increases the flexibility and market responsiveness of the platform, 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 received US$32.5 million in financing, showing investors' high confidence in its business model and development prospects. TrueFi aims to be a market-driven, automated credit rating and lending system, which requires going beyond strict, conservative limits such as min/max APY and high TRU participation factors while requiring users to assume a higher level of responsibility, esp. In terms of new borrowers outside of pre-approved whitelists and approving new loan types.

In general, TrueFi not only improves user experience and transaction efficiency through its decentralized, transparent and integrated features, but also provides global users with a wider range of financial services and innovation opportunities. As the DeFi ecosystem continues to grow, TrueFi will continue to play an important role in driving financial inclusion and technological innovation.

With the blessing of Trinity protocol and TRI token, can TrueFi complete a qualitative change?

TrueFi recently launched the Trinity Protocol, an innovative initiative aimed at improving capital efficiency for on-chain real-world assets (RWA). The protocol uses USD-based TRI tokens and is backed by collateralized assets, providing users with easy access to leverage and hedging of risk. Interest-bearing tfBILL, a tokenized short-term U.S. Treasury bill product, is one of the first collateral assets to back TRI. In addition, other assets in the TrueFi pool, RWAs from different protocols, and crypto-native assets can also be used as collateral.

Trinity Protocol allows users to mint TRI tokens on the protocol using tfBILL or other assets and then redeem them for stablecoins through automated market makers. Users can repeatedly mint TRI and exchange for stablecoins through smart contracts, achieving net gains of up to 15-20%. Another option is to exchange your stablecoins for TRI and deposit them into an sTRI vault to earn fees at rates close to or above the Treasury bill rate. TRI tokens can also be traded on the secondary market, increasing user operational flexibility and earning potential.

The Trinity protocol has been launched on the Optimism Sepolia testnet, and initial users will be selected to participate after the review is completed. TrueFi plans to launch Trinity on Coinbase’s layer 2 Base network, although it won’t be available to US users initially. The company notes that Base contains approximately 150,000 verified addresses that confirm users are not in the United States and that institutions are whitelisted.

Since launching its first protocol in 2020, TrueFi has continued to innovate and expand, having originated $1 billion in loans to date. The launch of the Trinity Protocol demonstrates TrueFi’s ambitions in the field of on-chain asset trading and provides users with more financial tools and opportunities. TrueFi's unsecured lending model implements credit assessment through the decentralized autonomous organization (DAO) model. 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 intelligence for decision-making, improving the transparency and trust of the platform.

However, despite TrueFi demonstrating strong growth and innovation potential, the future of the on-chain RWA market remains uncertain. The market size has fallen from its peak in April 2022 to one-third of its current size, reflecting market volatility and challenges. Whether TrueFi is able to lead capital efficiency improvements for RWA assets through the Trinity Protocol will depend on market developments and TrueFi’s performance in navigating these uncertainties. Can TrueFi’s innovation ultimately change the landscape of the DeFi market and usher in a more open, secure, and possible future? Time will tell.

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