TrueFi Introduces Dollar-Based TRI Token for Asset Trading

Decentralized credit protocol TrueFi has recently unveiled the Trinity protocol in an effort to enhance the efficiency of on-chain real-world assets (RWA). The Trinity protocol will utilize the TRI token, which is backed by collateral assets, to simplify the process of acquiring leverage and managing risks for users. Initially, the interest-bearing tfBILL, a tokenized short-term United States Treasury bill product, will serve as the collateral asset for TRI. Other assets from TrueFi pools, different protocols, and other crypto-native assets could also be used as collateral.

To obtain TRI on the Trinity platform, users can mint it by providing tfBill or other assets as collateral. They can then exchange it for a stablecoin using an automated market maker. Through a smart contract known as a vessel, users can borrow up to 92% of the loan-to-value ratio in TRI, which they can once again swap for a stablecoin, mint additional TRI, and repeat the process. This sequence allows users to potentially earn a net yield of 15-20%.

Alternatively, users can exchange stablecoin for TRI and stake it in the sTRI vault, generating fees and earning a yield that is expected to rival or surpass T-bill rates. TRI can also be traded on secondary markets, adding to its liquidity and accessibility.

TrueFi notes that the peak of on-chain RWA occurred in April 2022 when it had a significant amount of outstanding loans to trading firms, totaling hundreds of millions of dollars. The current market for on-chain credit has diminished to only one-third of its peak level.

Trinity is currently operational on the Optimism Sepolia testnet, and once the audit is completed, initial users will be selected to participate. The launch version of Trinity is expected to have a $40 million TRI mint cap. TrueFi aims to introduce Trinity on Coinbase’s layer-2 Base network but initially restrict access to U.S. users, taking a cautious approach to its rollout. Base consists of approximately 150,000 verified addresses that can confirm a user’s non-U.S. status and whitelist institutions.

TrueFi first introduced its protocol in 2020 and facilitated $1 billion in loans during 2021. The introduction of the Trinity protocol demonstrates the platform’s commitment to further innovation and better serving its users in the decentralized credit ecosystem.