TrueFi (TRU)

Lending and Borrowing

TrueFi is a decentralized finance (DeFi) platform that allows borrowers to get loans without needing to provide collateral. It connects lenders and borrowers directly, offering fast, fixed-rate loans. Borrowers build an on-chain credit history, which helps in future borrowing.

Governance

The TRU token is used for governance. Token holders can vote on important decisions like approving new borrowers and portfolio managers, setting loan parameters, and protocol upgrades.

Credit Rating and Risk Management

TrueFi uses a credit model where TRU stakers help assess borrower creditworthiness. Staked TRU tokens act as a safety buffer to cover losses if a borrower defaults. This system helps create a permissionless, transparent credit market on-chain.

Yield and Rewards

Lenders earn predictable interest on their loans, and TRU holders earn rewards for staking and participating in governance. Some unused capital is also deployed in other DeFi protocols to generate additional yield.

Real-World and Crypto Use Cases

TrueFi serves both crypto-native institutions and real-world businesses, expanding access to capital and making credit more programmable and accessible through blockchain technology.

Pros of TrueFi

• Uncollateralized Lending: TrueFi allows borrowers to get loans without needing to provide collateral, making credit more accessible.
• High and Stable Yields: Lenders can earn predictable and competitive interest rates by providing liquidity to lending pools.
• Decentralized Credit System: TRU token holders participate in governance and credit rating, helping create a transparent and permissionless credit market.
• Bridges Real-World and Crypto Assets: Supports lending with both traditional stablecoins and crypto assets, expanding use cases.
• Innovative and Growing: TrueFi is one of the first and largest DeFi credit protocols, with continuous development and strong backing from major investors.

Cons of TrueFi

• Market Volatility: The TRU token price can be volatile, reflecting broader crypto market swings.
• Complexity: Understanding uncollateralized lending and credit risk models may be challenging for beginners.
• Dependence on Governance: The system relies on active and responsible participation from TRU holders for credit decisions.
• Competition: Faces competition from other DeFi lending platforms that use collateralized loans or different models.
• Emerging Technology: As a relatively new protocol, it may still be evolving and adapting to market needs.

For more details, visit TrueFi's official website.

Founders

TrueFi was founded by Rafael Cosman, who is also the CEO of TrustToken, the company behind TrueFi.

Team Background

Rafael Cosman has a background in computer science and machine learning, with experience at companies like Google. He co-founded the nonprofit StreetCode Academy, which focuses on tech education.

Company

TrueFi is developed by TrustToken (now known as Archblock), a company that also launched the TrueUSD stablecoin.

Institutional Investors

TrueFi has raised funding from several well-known institutional investors including Andreessen Horowitz (a16z), Alameda Research, and BlockTower Capital. These investors participated in a $12.5 million funding round in August 2021.

Venture Capital and Capital Firms

Other investors include Visary Capital, which has also invested in TrueFi during other funding rounds.

Background Investors

TrueFi was originally funded by TrustToken, the team behind the TUSD stablecoin, through token sales to venture capital institutions and accredited investors.

These investors support TrueFi’s mission to build a decentralized credit protocol connecting lenders and borrowers without collateral.

Halal Status of TrueFi

• Yes, TrueFi can be considered halal by some Islamic finance perspectives because it operates as a decentralized finance (DeFi) protocol focused on uncollateralized lending without involving interest (riba) in a traditional sense.
• TrueFi uses a credit rating system and permissionless lending that aims to be transparent and based on incentives rather than interest-bearing loans.
• However, the halal status may vary depending on individual interpretation and specific Shariah compliance criteria.

For more detailed and personalized guidance, consulting a qualified Islamic finance scholar is recommended.