To date, TRU stakers have voted on each individual loan application, often without much information regarding the borrower beyond reputation. This model has been great for getting off the ground but now requires the first step of automation to be scalable and risk-adjusted.
To that end, we are asking TRU holders to vote on a new TrueFi Rate Model, which will allow for far more efficiency in working with our borrowers and provide clarity on approvals, loan amounts and interest rates. To determine these parameters, the TrueFi Rate Model incorporates data points including lending pool size, current utilization, loan size, borrower assets, and credit score.
Voting on the TrueFi Rate Model reflects your view of the first version of this model and the inputs that drive the analysis including but not limited to the lending pool “Maximum Utilization Ratio %” and our base interest rate “Unsecured Risk Premium”. We expect and acknowledge that the model inputs will continue to be adjusted via subsequent vote as we mature and encounter nuanced borrower profiles.
Ultimately, we expect to have different models and parameters for different lending pools to accommodate varying borrower and lender needs. The TrueFi Rate Model will initially be applied equally across the TUSD, USDC and forthcoming USDT pool.
For now, the TrueFi team will continue to perform compliance including KYC, manage loan agreements, and compute credit scores for prospective borrowers thus ensuring the integrity of the inputs to the model. Over the long term we look forward to decentralizing these aspects of the protocol as well.
We welcome any feedback and encourage you to vote. We believe the TrueFi Rate Model will allow us to deploy loans faster, achieve higher lending pool utilization and build borrower credit history more efficiently within our protocol.
- Yes, implement the TrueFi Rate Model.
- No, the status quo is preferred.