If the origination fee goes away and TRU stakers instead receive 2% of the loan APY, here is my understanding -
Assuming that deposits reach $50m TUSD and this amount is lent for the full year, the 2% return to TRU stakers would be $1m. There are currently about 27m TRU staked and if we assume a value of $0.50 per TRU, that means the annual return for the TRU stakers would be $1m / (27m * 0.50) = 7.4%. For comparison, stakers in the AAVE security module get 5.9% APY but can also face a maximum slashing of 30% (compared to 10% for TRU).
Naturally, as Total Value Lent (TVL) increases, the APY for TRU stakers would increase. If deposits & lending reaches $200m TUSD then the APY for TRU stakers would rise to 29.6%. It would then make sense to see TRU token value itself increase as either (1) more users will stake TRU to get yield, causing lower supply and/or (2) more users will buy TRU to stake, causing higher demand.
Now, I understand the unique differentiator of TrueFi is for 0% fully uncollateralized lending. That said, it could be interesting to explore the idea of partial collateralized lending - borrowers purchasing TRU to reduce the interest rate paid. For an analogy in the real world, real estate mortgages often allow borrowers to reduce long-term interest rate in exchange for cash up front. How this might work is a borrower uses staked TRU as collateral, and in the event of a default the borrower TRU is completely slashed before other TRU stakers get slashed. This allows borrowers to lower their interest rates by providing partial TRU collateral. Borrowers can also get governance rights on their TRU. For the protocol, this promotes decentralization as borrowers now have an incentive to buy TRU. For TRU holders, this would be positive price pressure as borrowers buy TRU, locking up more supply. It’s also more safety as borrowers now have more ‘skin in the game’ to not default. Essentially instead of 0% collateral (TrueFi) and 100+% over-collateral (AAVE), it now allows loans in the in-between 0 to 100 space. Of course this feature only makes sense for long-term / frequent borrowers so perhaps may be worth consideration with the upcoming Lines of Credit feature for trusted borrowers.
The above is a naive thought experiment and it’s worth calling out there are many gaps that are unsolved upon deeper consideration. For example, if a borrower wants to 50% collateral a loan with TRU, but then TRU value doubles during the course of their loan they’ve now effectively put 100% collateral on their loan (they’re probably still happy because their TRU collateral doubled). In converse, if TRU value halves then the loan interest rate discount would decrease until the borrower puts in more collateral. This could be a poor user experience. Also, if borrowers aren’t interested in discounts on loan interest rates in exchange for collateral, this could be a waste of valuable engineering time. Further, it can make understanding TRU + marketing that much more complex.