A new dark horse emerging from the RWA track: How is TrueFi, with its continuous heavy actions, changing Web3?

In the blockchain social field, projects are rapidly emerging like mushrooms after rain, with each new platform trying to leave its mark in the Web3 world. Recently, TrueFi, as a new type of credit protocol, has attracted widespread attention. According to monitoring by Lookonchain, an important piece of news has recently emerged: a whale withdrew $2.45 million worth of 14.43 million TRU from Binance and staked it on the TrueFi platform. This move not only highlights TrueFi's influence in the digital asset space but also reflects the market's recognition of its potential.
TrueFi is not just a credit protocol; it has recently launched a USD-based TRI token aimed at promoting the real-world asset trading market. This innovation injects new vitality into TrueFi, making it a prominent player in the digital asset field. As market demand grows, TrueFi is redefining the rules of the credit market through its unique protocol and innovative products.

However, with TrueFi's rapid development, it also faces numerous challenges. In this competitive field, how to maintain continuous 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 delve into TrueFi's current market strategy and challenges, exploring its potential and prospects in the Web3 social field.

Background Information on the RWA Track:

In the DeFi field, 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 several billion dollars and is expected to grow further in the coming years. According to the latest data and industry analysis:
Market Size Growth: The market size of the RWA track has grown from about $1 billion at the end of 2021 to over $3 billion at the beginning of 2023. This growth is mainly attributed to the continuous advancement of blockchain technology and the increasing global demand for transparency in digital asset management and lending.
Lending Market Potential: The lending market within the RWA track is rapidly developing. According to analysis, by 2023, the annual growth rate of the RWA lending market has exceeded 50%. This reflects the growing desire of asset owners and capital providers for more efficient and transparent lending opportunities.
Industry Trends and Challenges: Although the RWA track shows tremendous growth potential, its development still faces challenges such as regulatory uncertainty, asset audit complexity, and security issues. As technology and legal frameworks continue to improve, these challenges are gradually being alleviated, promoting broader market adoption and investment.
Overall, the vigorous development of the RWA track in the DeFi field reflects the profound impact of blockchain technology in traditional finance. As a representative of the RWA track, 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, providing efficient and secure lending solutions for borrowers and lenders.

With the promotion and innovation of platforms like TrueFi, the RWA track will continue to be an important channel for attracting global capital into blockchain and inject new momentum for the advancement and innovation of future financial markets.

Understanding the TrueFi Project from Various Dimensions:

1. Introduction to TrueFi and Its Unique Advantages:

TrueFi is a modular on-chain credit infrastructure that connects lenders, borrowers, and portfolio managers through smart contracts, governed by $TRU. It is a DeFi unsecured lending protocol developed by the TrustToken (now renamed Archblock) team, aimed at providing infrastructure for the digital asset credit market.
TrueFi utilizes smart contracts managed by the TRU token to seamlessly connect lenders, borrowers, and portfolio managers. Lenders can borrow cryptocurrencies at predictable loan rates without the need for collateral, unlike platforms such as Aave, Compound, and Venus.

2. Advantages of the Unsecured Lending Model

Compared to traditional over-collateralized lending models, TrueFi offers a more flexible and widely applicable solution. Traditional DeFi lending platforms typically operate on an over-collateralization basis, meaning borrowers must provide collateral far exceeding the loan amount, leading to low asset utilization and increased liquidation risk. Additionally, over-collateralization requires borrowers to hold a large amount of crypto assets, which is not friendly to users outside the crypto space.
TrueFi's unsecured lending achieves credit assessment through a decentralized autonomous organization (DAO) model. Borrowers submit loan applications, and after being vetted by the TrustToken team and whitelisted, TRU token holders vote on whether to approve the loan. This model not only reduces intermediary risk but also leverages collective wisdom for decision-making, enhancing the platform's transparency and trustworthiness.

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 transparency enhances user trust in the platform and improves overall market stability and development. At the same time, TrueFi's automated processes make lending transactions more efficient, reducing uncertainties caused by human intervention.

4. Integrating the DeFi Ecosystem to Provide Diverse Financial Choices:

TrueFi also integrates multiple elements from the DeFi ecosystem, such as decentralized exchanges and stablecoins, to offer users more financial choices and investment opportunities. This integration not only increases the platform's flexibility and market responsiveness but also provides users with more avenues for capital flow and investment strategies. In contrast, traditional centralized lending platforms are often constrained by strict market access restrictions and regulatory requirements, making it difficult to provide the same level of financial innovation and market inclusivity.

5. Financing Achievements and Future Prospects:

In terms of financing, TrueFi's unique design and strong community support have made it stand out in the DeFi field. TrueFi has successfully raised $32.5 million, demonstrating investors' high confidence in its business model and development prospects. TrueFi aims to become a market-driven, automated credit rating and lending system, which requires going beyond strict and conservative constraints, such as minimum/maximum APY and high TRU participation coefficients, while requiring users to take on higher levels of responsibility, especially regarding new borrowers outside the pre-approved whitelist and the approval of new loan types.
Overall, TrueFi, through its decentralized, transparent, and integrative characteristics, not only enhances user experience and transaction efficiency but also provides a broader range of financial services and innovative opportunities for global users. As the DeFi ecosystem continues to evolve, TrueFi will play an important role in promoting financial inclusivity and technological innovation.

With the Support of the Trinity Protocol and TRI Token, Can TrueFi Achieve a Transformational Change?

TrueFi recently launched the Trinity Protocol, an innovative initiative aimed at improving the capital efficiency of on-chain real-world assets (RWA). This protocol uses the USD-based TRI token, supported by collateralized assets, to provide users with convenient leverage acquisition and risk hedging methods. The interest-bearing tfBILL, a tokenized short-term U.S. Treasury bill product, is one of the first collateralized assets supporting TRI. Additionally, other assets in the TrueFi pool, RWA from different protocols, and crypto-native assets can also be used as collateral.

The Trinity Protocol allows users to mint TRI tokens using tfBILL or other assets on the protocol and then exchange them for stablecoins through automated market makers. Users can repeatedly mint TRI and exchange it for stablecoins via smart contracts, achieving net yields of up to 15-20%. Another option is to exchange stablecoins for TRI and deposit them into the sTRI vault to earn fees at rates close to or above Treasury bill rates. The TRI token can also be traded on the secondary market, increasing users' operational flexibility and yield potential.
The Trinity Protocol has already launched on the Optimism Sepolia testnet, and initial users will be selected after the audit is completed. TrueFi plans to launch Trinity on Coinbase's Layer 2 Base network, although initially, U.S. users will not have access. The company noted that Base includes about 150,000 verified addresses to confirm that users are not in the U.S., and institutions have been whitelisted.
Since launching its first protocol in 2020, TrueFi has been continuously innovating and expanding, having issued $1 billion in loans to date. The launch of the Trinity Protocol showcases TrueFi's ambition in the on-chain asset trading field and provides users with more financial tools and opportunities. TrueFi's unsecured lending model achieves credit assessment through a decentralized autonomous organization (DAO) model, where borrowers submit loan applications, and TRU token holders vote on whether to approve the loans. This model not only reduces intermediary risk but also leverages collective wisdom for decision-making, enhancing the platform's transparency and trustworthiness.
However, despite TrueFi demonstrating strong growth and innovation potential, the future of the on-chain RWA market remains uncertain. The market size has declined from its peak in April 2022 to one-third of its current value, reflecting market volatility and challenges. Whether TrueFi can lead to improved capital efficiency for RWA assets through the Trinity Protocol will depend on market developments and TrueFi's performance in addressing these uncertainties. Will TrueFi's innovations ultimately reshape the DeFi market landscape, ushering in a more open, secure, and full of possibilities future? Time will tell.