Loan duration change

Ideas
#1

Hi everyone,

When the protocol originally launched, the TrueFi team chose to start with a maximum duration of 30 days for loans. I would like to begin an ongoing conversation about extending the maximum duration. Grapefruit Trading is currently borrowing on a 30-day agreement, but we would use the protocol more if we could get the duration increased, and I believe other users feel the same way. The kind of users TrueFi is trying to attract are interested in longer agreements. Having a short duration, such as 30-days, can be a deterrent for larger users who think on a 6-12 month scale.

I suggest extending the 30-day window to 90-days now, and once the first 90-day loan is paid back, the protocol should consider moving to a 180-day window.

Please vote YES on the below poll if you agree the maximum duration should be extended from 30 days to 90 days. Vote NO if you disagree. Comments and feedback are welcomed.

90-day max duration
  • Yes
  • No

0 voters

If this poll is favoring yes by the end of the day on Friday, 1/8, I will post a TIP on Saturday, 1/9.

[Proposal]: Change loan term max limit to 90-days
How Snapshot Governance of TrueFi Will Work
#2

I agree with you 100%, but if so, I think it is necessary to prevent any loan on a long term with a huge amount that would reduce considerably the liquidity of the pool from being accepted.

#3

I can support longer terms after a history of good credit. I’d suggest the protocol build in automated increased amounts and automated increased terms. As an example: borrower builds positive credit over 30 days for $1 million. The system accepts repayment, borrower is auto approved for an increased amount (to be decided by community) and user is auto approved for longer term. The user is given options to “close”, “extend term” (based on community predetermined parameters) and/or “increase borrowing amount”. This is code, this can be automated. Borrowers would need to be re-assessed once yearly against fraud, negative news, sanctions issues. On the automated theme… an alert could be generated that a borrower is approaching 1 year, due diligence is performed by the community based on the community decided process/system/third party, information about borrower is supplied to community so community can decide to vote to continue relationship with borrower. Community votes to renew relationship or cancel relationship based on yearly due diligence. Community also needs to be aware of concentration risk to one or a few borrowers.

2 Likes
#4

I agree. For now, I think it will be up to the community to vote appropriately.

This would be an awesome addition to the protocol. I think it is important to establish some norms in the meantime. At the very least, I think one 30-day loan needs to be repaid before moving up to a 90-day term.

2 Likes
#5

Thanks Getty, I agree.

#6

I agree with you on this !