Thank you to the NanoNews Community for participating in Ask Me Anything (AMA) with Truefi May 04, 2021. This guest star Michael Gasiorek,Head of Marketing at TrueF. If you were unable to join the live AMA, no worries, here comes our 111th AMA recap!
We are glad to meet here:
Michael Gasiorek, Head of Marketing at TrueFi
For taking your time out from busy schedule for the AMA!
Host: How are you feel today sir?
Michael Gasiorek: Feeling great
Host: Nice, Our community hopes to talk and learn more about Truefi
Q1. Could you give an introduction of yourself And how you can play an important role in TrueFi?
I’m Michael Gasiorek, Head of Marketing at TrueFi. I’ve got a little “formal bio” I’ll post, but I’ve been doing marketing for about +10 years, with the last 5 in crypto. Worked with Compound, Republic, Algorand, and a bunch of others. I joined +1y ago and also do marketing as CEO of Truth Cartel + trade crypto + participate in DeFi yields.
I’m here on Twitter: https://twitter.com/gasiorekm
My focus is telling the world about TrueFi! I own all marketing and comms, with help fromAda Wu on the China side of the promotion.
Q2. What is TrueFi? And how is the story behind the TrueFi Creation?
TrueFi is a DeFi credit protocol that powers uncollateralized loans. TrueFi’s is the first and largest protocol for fixed-term, zero collateral loans, made possible through a combination of the best of centralized and decentralized finance. We’ve done $100m in loans since November 2020, and have had ZERO defaults – all loans paid back with interest.
It takes three players to make TrueFi work:
Vetted Borrowers like Alameda Research, Wintermute Capital, and Poloniex. Borrowers request capital and offer Lenders interest on the loan. Only institutional lenders are able to borrow right now, but TrueFi is exploring retail & protocol-to-protocol loans in the future. All Borrowers complete a background check (KYB), make their requests for capital publicly (no anonymous borrowers yet), and sign a legally enforceable lending agreement in case of default.
Stakers of TRU, the native TrueFi currency, review these Borrowers and approve each individual loan for creditworthiness, assisting in vetting the risks taken on by TrueFi. TRU holders also participate in governance and guide the direction of the overall TrueFI platform.
Lenders deposit cryptocurrencies into TrueFi to earn a competitive yield. These deposits are used to fund loans to Borrowers. Currently only TUSD is supported, but more tokens will be supported in the future (including USDC and USDT, and likely BTC, ETH, and more). Unlike centralized lending projects, TrueFi Lenders have full transparency of how lending pool funds are allocated, making risks transparent.The overall goal is to make TrueFi the ultimate credit protocol in DeFi, with the ability to move money wherever it creates the most value – instantly.
You can learn even more about TrueFi in our lite paper: https://bit.ly/truefiblog
The story, too, is fun, tooTrustToken built TUSD back in 2017. It’s now a billion-dollar stablecoin. But we wanted to build more, so we started exploring new products.
We looked to traditional financial markets for a vehicle that yields high returns, at consistent and predictable rates with manageable risk profiles and landed on uncollateralized lending. Moving the uncollateralized lending market onto the blockchain opens up access to lenders of nearly any size and background.
After years of building in crypto, we’ve found the most interesting products act as bridges between traditional and decentralized finance. The TrustToken team has developed some unique strengths by developing and operating five top fiat-backed stablecoins serving over 100 countries, and with TrueFi, we’re bringing these to DeFi – with TrueFi.
Q3. What is so exciting about TrueFi, which might make TrueFi different from all other projects out there?
I think it’s 4 things, really:
Differentiation:TrueFi is offering something no other protocol is – collateral-free loans – by doing something few other protocols can: bridging regulated, traditional finance with the innovation and speed of the blockchain. We’ve built a strong technology and team, yes, but our greatest defense is just how hard this niche is to service, and how committed we are to getting it right.
Collaboration:TrueFi is possible because of all the relationships we’ve built and insights we’ve had as the makers of TUSD. We’re trusted by the best possible borrowers – like Poloniex! – and are already working closely with the biggest DeFi protocols in the industry. We’re also contributing important DeFi primitives we hope will be used by other projects, like lending pools, on-chain credit, and loan tokens. We expect these elements will ripple throughout DeFi, growing our impact.
Credit Model:TrueFi is powered by a credit model that supports borrowers taking out more favorable loans the more they utilize the platform. After a few loans, it makes it very attractive for the borrowers to stay with our protocol – which is good for lender returns. We also plan to make this model composable, letting other protocols use it in their lending markets, and hopefully power more of DeFi.
Yields: Loans that require collateral cannot offer the best yields in the long term – only uncollateralized lending can consistently deliver the highest unboosted yields. In the long term, we expect TrueFi to be among the most competitive offerings for growing one’s cryptocurrency.
Community:In the end, every project succeeds because of its community. We’re lucky to have most of the most respected Borrowers, like SBF of Alameda; investors, like a16z Crypto; DeFi protocol partners, and ultimately TRU holders who are actively voting on loans, passing major proposals, and really driving decentralization forward.
Good community + good investors + good borrowers + good ecosystem partners 🙂
We really hope you’ll join us!Join us on Twitter: https://twitter.com/trusttoken
nd also we have very DEEEEEEP discussion on Discord, too: And dive into the conversation properly: https://bit.ly/chattruefi
Q4. Please provide some information about your Roadmap, How TrueFi is progressing so far? And what TrueFi is currently focused on?
I’m most excited for 3 big things coming: adding new tokens to the platform (stablecoins like USDC, USDT, DAI and also BTC and ETH) which should grow TVL, launching the TrueFi credit model which should make the protocol work more quickly and profitably for lenders & borrowers alike, finally, protocol-to-protocol lending in the future.
I think the potential there is huge – and it’s all in our 2021 roadmap!
Q5. Please tell us more about Token (TrueFi) Whaten! What utilities does the token have, and what benefits will tokens holders get?
So, the first thing to know, is that the TrueFi platform actually uses a few tokens: TRU, TUSD, and soon a few others. Just so you get a top-down view, here’s how they relate:
Let’s dig into TRU now
First, utility (and rewards):Staking TRU is essential to approving new loans, and stakers are rewarded very well for their participation. Current yields on staking TRU are as high as 60%, in exchange for Stakers vetting loans and borrowers, as well as assuring lenders from some risk.
Looking right now, rewards are pretty amazing 😛
That’s on: https://app.truefi.io/stake
Second, governance: TRU holders actively guide the development of TrueFi, from approving new borrowers to voicing their desires on the forum, Snapshot votes, and on-chain decisions. TRU holders are currently deciding important mechanics like the Backstop Fund, which will make lenders safer from default.
Third, Liquidity: TRU is trading at high volumes on DEXs. You’ll need to hold TRU to provide liquidity on Uniswap or Sushiswap to take advantage of transaction fees, and also capture high APYs with Onsen rewards.
Q6. What are some achievement that TrueFi has achieved so far? And what are TrueFi upcoming plans, Especially in 2021?
TrueFi launched in late November 2020. In the last 3 months, TrueFi has done OVER $100m in loans to big borrowers: SBF’s Alameda Research, Wintermute Trading, Invictus Capital, Poloniex, and others. More borrowers are coming each week. You can see all active loans here: https://app.truefi.io/loans
We landed in the top 25 DeFi projects by DeFi Pulse, and top 10 lending protocol, with TVL of ~$100 million.
We’ve also launched governance as part of TrueFi V2, grew our communities into the thousands, burned almost 10m TRU, and grew the team a lot. We’re still hiring – join us at https://www.trusttoken.com/about
TRU has also been listed on many of the world’s best centralized and decentralized exchanges, including Binance, FTX, Poloniex – with lots of activity on Uniswap and Sushiswap!
Here’s where you can buy $TRU: https://blog.trusttoken.com/truefis-tru-token-trading-on-binance-ftx-uniswap-and-sushiswap-8603dc11a466
Q1. If TrueFi’s unsecured loans really have more risks and require more commissions than guaranteed loans, then why should users migrate from secured loans to this TrueFi platform? Is it worth taking those risks of losing capital?
Ada Wu: Not necessary. Our lending platform is built on the credit model that generate loans with vetted borrowers from a whitelist that has good credit history
Meanwhile the collateral-free loans are generating higher returns than the collateralized ones
Michael G: Also, JUST IN CASE something goes wrong, we have a pretty comprehensive default response:
Q2. Can you explain more about the uncollateralized lending offered by your platform? If it is uncollateralized, how can you guarantee that the lender will really pay and not runaway? What are the conditions in availing uncollateralized lending in Truefi?
Ada Wu: First, we provide Uncollateralized lending that provides an opportunity for lenders to earn long-term, competitive returns.
How can you guarantee that the lender will really pay and not runaway?
First, we know who they are. The borrowers are from a whitelist & have good credit history
Also, we created a legal framework for enforcing action against delinquent loans compatible with DeFi, even without collateral;
For more details about the risk. You can check it here: https://blog.trusttoken.com/mitigating-risk-truefis-loan-default-process-454359a8c4b
Q3. In the uncollateralized lending of TrueFi, how is guaranteed to the borrower that the payments will be made on time, what ensures protection to the funds that are borrowed?
Michael G: Don’t wanna repeat ourselves too much, but it’s basically three things:
1. The Borrowers are KYC’d and PUBLIC. It’s *very obvious* to everyone (you, me, everyone on Twitter) who the borrower is AND if they default. Defaulting on a loan would be VERY bad for them publicly – so that’s a major way of guaranteeing repayment.
2. Borrowers also sign a legal agreement: “if we fail to repay, we know we will go to court.” It’s signed by a business with an address, and enforcable from California. No borrower wants to be dragged to court!
3. If a Borrower fails to repay, they won’t be taking out more loans with us. It’s too valuable to give up that line of credit!
Q4. The roadmap says that TrueFi will launch something called ” line of Credits” so can you explain us more about this new service? What are the requirements to apply to me acredited by you?
Michael G: So, first of all, only institutions can borrow from us right now. This is VERY important, because institutions (a) can take out a lot of money, (b) are very safe to work with and (c) can generate really high returns to pay back the loans with interest. Right now, individuals CANNOT take out TrueFi loans.
Now, what is line of credit: it’s an amount of money you can take out from TrueFi – let’s say $10,000 to $10,000,000 – that you can borrow for a long period of time, so long as you keep paying back interest.
It’s a lot like a credit card – but for a BUSINESS, and for a LOT more money
Q5. I’m curious about the loans ay Truefi. How many earns can I get as a lender who capital is paid to the project? What are the requirements in order to be approved for a verified loan On truefi? What happens if the borrower cannot pay the loan?
Michael G: I will reply re: requirements + response with this link: https://blog.trusttoken.com/mitigating-risk-truefis-loan-default-process-454359a8c4b
Requirements: be a big business able to generate ~14% APY on the loan, with a strong reputation and good risk management. No personal loans.
Repayment: if a borrower fails to repay, they are banned from new loans until repayment happens, it affects their credit score, their default status is PUBLIC, and there’s legal action taken agaist them to collect.
Finally, Ada WU will talk about APYs
Ada Wu: About the return, 14% APY + Farming Pool currently 53% return
Here is the current return in our farms:The return you can earn from TUSD (from lending) is 14% and then you can get and stake the pool token to the farm to earn the extra 53% in TRU Token
Q1: Many blockchain projects are just on paper and have no real meaning. What practical product is Truefi using? What plans do you have for a better product in the future?
Michael G: his is a good question: and not hard to answer, as we’re already LIVE.
TrueFi has already originated +$100m in loans to big trading firms, generated $251k in fees for lenders, and paid out over $600k in interest. It’s helping borrowers AND lenders make great money!
In the future, it’ll do o much more than that: it’ll power credit scores across all of DeFi, help money move even more fluidly, and hopefully open up more financial access.
You can see the progress here: https://duneanalytics.com/tt_tyler/truefi-loan-stats
Ada Wu: Great question! TrueFi is developed by TrustToken team. After years of building in crypto, our team have developed some unique strengths by developing and operating 5 top fiat-backed stablecoins serving over 100 countries which gave us advantages and experience to build this right.
Michael G: Team is also NOT anonymous: meet us all here -> https://www.trusttoken.com/about/
Q2: Is the smart contract bug-free and safe from hackers? Have you done an audit by any reputable external auditor?
Michael G: TrueFi has been used by thousands of DeFi users so far, with no defaults and no hacks to date.
We’ve completed 3 audits to date, one for EACH of our project phases, with ETHworks, Slowmist, and now CertiK – some of the best firms in the business.
Q3: Token burning is a great way to reduce the supply and Increase the demand of the token. Do you also has plan for Token burning In the future? Or planning to implement burning in transaction?
Michael G: YES! We’re burning TRU, and tracking the burns live. We may do larger burns in the future, if our community votes on it.
Watch all our burns here: https://bit.ly/burntru
Q4: For any blockchain token to be truly successful, it must have real utility. So what uses and functions does your token have, what roles will it play in the Truefi Ecosystem?
Ada Wu: Yep! Agree! On TrueFi, community members can use TRU to stake and vote for the loan applications which you can also reinvest and farm on our platform. For more detailed token economy, please see https://blog.trusttoken.com/truefis-tru-token-economics-7facea6651c0
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