TrueFi, a decentralized credit protocol, has unveiled the Trinity Protocol, aimed at enhancing capital efficiency for on-chain real-world assets (RWA). This novel protocol introduces USD-based TRI tokens, backed by collateralized assets, streamlining leverage acquisition and risk hedging for users. The protocol's cornerstone collateral asset is the interest-bearing tfBILL, representing tokenized short-term US Treasury products. Additionally, TrueFi pools encompass various RWAs from diverse protocols, alongside other crypto-native assets.
Trinity facilitates TRI minting by leveraging tfBill or alternative assets as collateral, subsequently enabling users to exchange TRI for stablecoins via an automated market maker. Through smart contracts known as containers, users can borrow up to a 92% loan-to-value ratio in TRI , engaging in a process that could repeatedly yield returns of 15-20%. Alternatively, users may opt to exchange stablecoins for TRI and deposit them into an sTRI vault, thereby accruing yields expected to rival or surpass Treasury bill rates. TRI tokens are also tradable on the secondary market.
As per TrueFi's data, the pinnacle of on-chain RWA activity was observed in April 2022, with outstanding loans to trading companies amounting to hundreds of millions of dollars. Presently, the on-chain credit market stands at approximately one-third of its peak size. Trinity has been launched on the Optimism Sepolia testnet, with an initial user selection process underway. The protocol's release is anticipated to feature a TRI mint cap set at $40 million.
TrueFi envisions launching Trinity on Coinbase's layer 2 Base network, with a cautious initial rollout strategy excluding US users. Notably, Base boasts around 150,000 verified addresses, indicating user locations outside the United States, with institutions whitelisted accordingly. TrueFi, having inaugurated its first protocol in 2020, facilitated $1 billion in loans throughout 2021, marking a significant milestone in its evolution within the decentralized credit space.
