Hi TRU Community,
I would like to propose a change to the TRU token that gives TRU stakers a claim on fees accrued by the TrueFi protocol.
Currently, active participants of the TrueFi protocol (stakers) are only earning rewards denominated in TRU and there no other forms of value accrual to the token other than Buy & Burns.
The details of the proposal can be found below:
TRU stakers start earning a cut of the fees that the protocol charges (ALL of the .25% loan origination fee in TUSD – which is also being discussed on the forum here).
TRU payouts & incentives for staking on the specific loans remain unchanged.
These staking rewards will accrue over the term of the loan (in TUSD) and will be claimable on a regular basis.
What this would look like in practice:
Loan ($1,000,000, 12% , 30 days)
Let’s say the origination fee is 0.25% of the loan principal. $2,500 will be collected as origination fee. Assuming that all the stakers had staked a total of 1,000,500 TRU (1,000,000 TRU as yes, and 500 TRU as no). Apart from the TRU rewards and payout stakers would also receive 0.00249 ($2,500/ 1,000,500) for every TRU staked.
If you had staked 10,000 TRU (value = $1,500) you would receive $24.987 TUSD ( 1.67% 30-day ROI or 20% annualized).
This gives TRU an explicit form of value accrual and helps to answer the question of “What can I do with my TRU?”
The case against relying on Buy & Burn:
As some of you have pointed out, the buy & burn model is outdated and fails to reward protocol stakeholders fairly according to their level of contribution back to TrueFi. Not all tokens holders deserve the same rewards.
When we spend protocol fees to buy & burn TRU off the open market we are rewarding all TRU holders equally, no matter if they are an active contributor, TA trader, or random speculator.
The proposed change would skew rewards towards the active participants (stakers) that are driving the protocol forward, and gives token holders a clear reason to care about governance (fee-adjustment).
Let us know how you feel about this proposal. Would love additional feedback.
Once this idea has been finalized, it will become our first snapshot governance poll. TRU token holders will then be able to vote in an explicit form of value accrual.