TrueFi has been an amazing protocol to use so far, however I have found two many issues with the protocol because of its reliance on currently only being deployed on Ethereum. Foremost, gas prices are inhibitive for many potential users who would deposit liquidity to our protocol, but simply cannot afford the gas fees. This is hamstringing the protocol from its fullest potential. A second result from this issue is the centralization of capital amongst a few whales. We can improve the safety and longevity of the protocol if we have a more decentralized source of capital, through encouraging smaller accounts to deposit on TrueFi. Lastly, being on Polygon would mean that more loans could be taken out at smaller prices due to the gas fees being around a cent. This would increase the utilization rate of capital and increase returns for TRU holders.
I believe that Polygon would be the best choice to deploy TrueFi given its immense developer support and impressive liquidity utilization rates. Across UniSwap and Aave, the Polygon markets have the highest liquidity utilization rates due to the low gas fees and high number of unique user addresses. If the goal is to increase value for the protocol and TRU holders, it is in our best interest to deploy on Polygon. Polygon also has such a diverse DeFi ecosystem that protocols can build on top of TrueFi, increasing the composability of the protocol, and also giving more potential for earning power from TRU. Polygon is EVM-compatible and shares a Ethereum’s vision for the future of web3 – making it a great choice for deployment.
Lastly, under the umbrella of Polygon’s #DeFiForAll campaign, Polygon has launched a $15M push towards Liquidity Mining 2.0. Based on selected performance indicators, TrueFi is presented with the opportunity for added $MATIC rewards for both the protocol and its users.
Reading into LM2.0, it looks like it can bring higher rewards for users on TrueFi. I am also a big fan of Polygon due to the emphasis on efficiency it brings to its dApps. One question – what if TrueFi progresses across Tiers on LM2.0? How quickly would those rewards change?
He put together a great framework on evaluating chains and would be curious for his perspective here:
It seems to me there could be good market demand for TrueFi on Polygon from both lenders and borrowers. There’s high DEX trading activity on Polygon (>2bn monthly volume on Uniswap, ~2bn monthly on Quickswap), indicating that market makers can deploy liquidity there. Wintermute, one of TrueFi’s largest borrowers today, is active in the Polygon ecosystem:
I’ve been summoned. Thanks @tylerw for the mention!
I think deploying on Polygon would be amazing for TrueFi. I’ve been actively using Polygon for the past year and it’s been a great experience. In this time, Polygon has seen massive growth and adoption.
Deposits and withdrawals via Polygon are enabled on Crypto.com, Binance, Binance US, and more exchanges in addition to Hop Exchange and other bridges bringing about quick on/off ramps.
EIP 1559 has been activated bringing about more predictable gas prices, which is important for UX.
Up-time has been 100% as far as I’m aware with a few hiccups leading to high gas prices, but even in these times, paying a few dollars for a swap rather than the average ~$0.25 for a swap isn’t bad compared to Ethereum.
Aave’s Polygon deployment is seeing new markets being added. I am expecting the Polygon network to be the first L2 which Compound is to be deployed on. Various other critical protocols are also on Polygon - Curve, Uniswap, Balancer, and 0x to name a few.
I’ll post a more detailed analysis in the coming days, but for now, I’ll say the Polygon network is a great first L2 to deploy on.
I’m somewhat nervous about truefi deploying on less secure L2s… it seems every week there’s a new hack or exploit, the latest being the ronan side chain hack.
I’m all for reducing gas fees and I think l2s are the future, but I can’t help but feel that truefi is on of the protocols where being on l1 makes sense, it might be expensive, but we are doing less frequent large transactions where maximum security is important.
Perhaps it makes more sense for truefi to wait until some zk-rollup based solutions mature and then deploy on those.
Also, I’m not sure how truefi will work if deployed on polygon, would it be an entirely new set of portfolio managers / pools? Could be a good idea for sourcing liquidity more cheaply with lower gas fees, but could also just fragment the ecosystem and reducing some of the current benefits which are economies of scale.