One of the top priorities right now is to increase utilization in the pools. We are doing this by (1) growing with existing borrowers (2) continuing to bring on new borrowers (3) Getting rates in line with the market
Regarding (2), I propose that we discontinue TRU incentives for borrowers and use the remainder of that allocation pool to create a referral program for existing borrowers to bring on new borrowers.
Why do this?
- We introduced the ‘borrower incentives’ as a way to subsidize rates. However, with the introduction of the ‘rate model’ we are seeing lower base rates on average and the ‘borrower incentives’ are now overkill. We will still pay out the incentives to the borrowers who took out a loan between when the original Snapshot passed and now, but no more.
- Existing borrowers have been the best source of new borrowers. Many of our repeat borrowers today come from introductions or recommendations from earlier borrowers. We’d like to give borrowers even more of a reason to incentive new TrueFi borrowers.
Details of the Referral Program (to be fleshed out based on comments before formal proposal moves to Snapshot)
- Let’s say we have about 900,000 / 1,000,000 of the TRU that were previously allocated towards
- It would be great if we could bring on another 20 credible borrowers
- I propose that we pay 45,000 TRU to each borrower that refers a new borrower to us that passed our review process and takes out a loan
- If this program is effective, we could choose to extend it, but I think 20 is a great starting point.
- At the moment, we have a CRM w/ 56 existing and potential borrowers at varying stages of onboarding. These 56 borrowers include borrowers who have already taken out loans (Wintermute, Nibbio, Amber) and some that we plan to reach out to, but have not yet (often because they’re large and we we want to grow a bit before we connect with them). While we can’t share that list publicly, we’ll do ‘scouts honor’ with borrowers so that if they introduce us to someone that (a) we have never spoke to (b) have on the list, but aren’t actively onboarding with, we will pay out the referral.
- Yes - Move forward with a proposal
- No - I do not like this idea
- Yes, but make changes - (Comment suggestions below)