What Is TrueFi?
TrueFi is a decentralized finance (DeFi) platform on the Ethereum blockchain that provides unsecured, fixed-term loans to whitelisted borrowers without requiring collateral.
Background
Launched in November 2020, TrueFi aims to bridge traditional finance and DeFi by offering unsecured lending to both crypto-focused institutions and real-world firms such as fintech companies, trading firms, and credit funds. It has grown significantly, originating over $1.7 billion in loans and paying out more than $40 million in interest to its participants.
How It Works
TrueFi operates through a modular infrastructure that connects lenders, borrowers, and portfolio managers using smart contracts. The governance of the protocol is facilitated by TRU, the platform’s native token. TRU stakers play a crucial role in assessing the creditworthiness of potential borrowers and serve as a form of default insurance. In return, they receive a portion of the revenue generated from the loans, along with TRU incentives.
Key Takeaways
- Unsecured Lending: Offers zero collateral, fixed-term loans, distinguishing it from other lending platforms that require collateral.
- Decentralized Governance: Utilizes TRU tokens to allow stakeholders to govern loan approvals and protocol decisions.
- Broad Borrower Base: Caters to a diverse group of borrowers, including both crypto enterprises and real-world firms.
- Risk and Reward: Stakers of TRU assess risk and provide default insurance, earning revenue and incentives for their governance.
- Significant Impact: Since its inception, TrueFi has facilitated over $1.7 billion in loans and distributed over $40 million in interest to users.
