I’m Ryan Christensen, CEO of Archblock. I’m posting to the TrueFi forum to share updates and perspectives on Archblock and TrueTrading activities related to the TrueFi lending book. Stating the obvious, the crypto lending market has been greatly impacted by the cascading, predominantly CeFi-driven defaults and bankruptcies in 2022. We’ve also seen substantial tightening in the broader lending market that impacts real world asset (“RWA”) opportunities that are core to our strategy.
Archblock continues to pursue full recovery for TrueFi lenders negatively impacted by previously reported defaults from the USDC and BUSD TrueFi pools - Blockwater [loan details + announcement], and Invictus [loan details + announcement]. We cannot share much detail about the proceedings, but we have engaged bankruptcy counsel and will, as shared earlier, expect to distribute 100% of recovered proceeds, net of our external legal fees, back to affected lenders as soon as possible.
More recently, Alameda defaulted on the TrueFi Single Borrower Pool [Alameda II] managed by TrueTrading. We are in direct communication with all of the affected lenders and will be pursuing recovery on their behalf. Similar to the above, we will pass 100% of recovered funds, net of our external legal fees and costs, back to lenders. We are also beginning to explore tokenizing recovery to bring as much transparency as possible to the recovery process & outcomes by bringing them on-chain.
In the NeoFi Opportunities Portfolios, TrueTrading served as a proof-of-concept asset manager, or pilot program, to diversify the reach and capabilities of TrueFi to support new portfolio managers with a variety of businesses representing RWA. To date, these portfolios have created $276,164 in interest for TrueFi lenders. A strong majority of the TrueFi community agreed with this strategy, which is visible in the votes supporting each of the four loans managed by TrueTrading since late 2021 [borrower profile + stkTRU votes]. We continue to believe diversification away from uncollateralized crypto lending into RWA-backed loans are the future of TrueFi. We expect to introduce a handful of high-quality portfolio manager candidates via forum posts and governance votes in Q1. Here’s a recent announcement that highlights an example of our ongoing efforts to create opportunities for new RWA managers.
Our final loan originated by TrueTrading and funded by the TrueFi USDC pool was to be the last loan of TrueFi funds managed by TrueTrading. However, we need to modify this plan, as the sole borrower within the NeoFi Opportunities [Pilot IV] Portfolio, Delt.ai, has yet to identify alternative funding within the current loan timeframe.
Delt.ai has a healthy business providing fintech software and lending to real-world small-to-medium sized Enterprises in emerging markets. Their business depends on durable capital and has counted on TrueFi to be a source of funds for growth as they work to diversify their capital supply.
Their first 3 loans totaling $9,977,500 have generated $276,164 in interest for TrueFi lenders. Our credit team has been monitoring their financials on a weekly basis to ensure they are meeting their covenants, and is actively working with them on new terms with additional lender incentives (more on this below), and firmly believes a refinancing will lead to the best outcome for lenders, with good potential for full repayment including interest. See more about Delt.ai from José de la Luz López, founder & CEO towards the bottom of this post.
Here is a summary of the terms we have agreed on in principle at this time:
- New loan term of 180 days, from 01/10/23 to 07/09/23
- New loan interest rate of 14.75% in the first 90 days, and 17.5% in the second 90 days
- Delt.ai will pay owed interest on the current loan of $166,695, which we intend to airdrop proportionally to lenders via TrueTrading upon receipt of this payment
- Archblock may negotiate additional benefits, which if available will be passed proportionally to lenders
- We expect to sign a definitive agreement by 1/9/23, and will update the community should any material changes in this plan occur
As with all other loans that we have addressed in this post, Archblock will pass through 100% of proceeds proportionally to current USDC lenders, either via standard repayment of the loan or settlement if necessary. Archblock will continue to explore tokenizing any recovered off-chain assets for fully-transparent distribution to lenders wherever possible.
For clarity, if the community does not approve the proposed refinancing, the current USDC pool loan to TrueTrading ($5.5MM due 1/24/22) will be called for default on 1/24/22. While Archblock will continue to work with Delt.ai to refinance the loan at the earliest possible opportunity, we believe that a failure to refinance this loan in the near term would impose a greater risk of losses for USDC lenders.
A binding Snapshot vote with the following options has been posted and is live for voting:
- I support the proposed refinancing plan
- I do not support the proposed refinancing plan
- I abstain
In order to enable the recommended refinancing and ensure equitable treatment for current lenders and TRU Stakers, the Archblock and TrueFi teams will work together to prepare an on-chain governance proposal for the disabling of deposits, withdrawals, and stkTRU slashing in the current tfUSDC pool. This proposal will be put forth prior to the current 1/24 loan end date, and will be subject to feedback on this post and via Snapshot vote.
Thank you for your attention and participation in the TrueFi governance process. We will continue to update the community as quickly and transparently as possible as we progress towards our goal of making TrueFi the protocol for global lending.
Delt.ai is a fintech startup based in Mexico City that offers an intelligent corporate credit and spend management solution. A Y Combinator company, Delt.ai offers Mexican entrepreneurs better access to working capital through its intelligent credit lines, corporate credit cards, and digital payouts platform. For more information, visit Delt.ai
Archblock Update on Q4 performance of Delt.ai:
Delt.ai continued to perform well in the fourth quarter of 2022 with healthy increases in capital available to deploy to customers despite some slowing and small contraction of capital deployed in December. Recently signed commercial agreements are expected to return capital deployment back to plan in January. Customer delinquencies remained stable at the 6.65% level and well within the base case underwritten levels for potential loan losses. Delt.ai expects that as growth in deployment reaccelerates both volume growth and delinquencies should improve.