Who’s attacking who???
We strongly refute the allegations of a governance attack. Our proposal was made with honest intentions to benefit Truefi DAO and TRU holders.
We submitted our proposal on the Truefi forum on June 30th, leaving plenty of time for feedback, and voters (if they want to opine with votes) to express their views, and voting naturally delayed for 2 days after being posted in Tally.
Conflicts of Interests Everywhere on this Proposal/Proposer and Canceller:
In light that staked TRU voted for the passage of our proposal, it has been Cicada (ex Orthogonal Credit – we recommend to look at the news history on them in summer to fall 2022) has proposed to use the canceller function to overturn the proposal.
We believe that Cicada is fully incentivized to keep the status quo as its economic incentives are tied to it. They are conflicted and acting for their own economic gain at the expense of Truefi token holders. The clearest example here is that by simply creating borrower vaults on Truefi, they stand to make 5 million TRU. Perhaps they feel threatened about this? Are these fees even really justified?
Next, let’s look at the canceller function role multisig itself:
After making an outrageous contract proposal in terms of economics (4.5 million USD for the last 6 months, a 4 times increase for 1H 2024.) and the proposal being voted down, Wallfacer continues to have 2 out of 6 signatures on the canceller address itself. As there is conflict as Wallfacer and friends may think there is a permanent replacement of them, instead they should recuse themselves of using this function.
We’d like the entire community to know that in March 2023 in the bottoms of the crypto market, there were 96 million “yes” votes for Wallfacer’s 2023 funding request. Yet, we’ve seen these addresses voting shrink significantly in a span of only 15 months. Staked Tru that have been so involved in voted in terms of size in 2023 have shrunk until recently down to just shy of 15 million in 2024. Much of these tokens went to Binance and Coinbase. Why aren’t most of these TRU coming back to vote?
We’d be more than happy to engage with major TRU holders who remain and of course with new ones, even though we feel the bottom line here is that old holdings have been exiting.
The use of a canceller vote under a reason of “governance attack” as a way of compensating for a much lowered stake TRU holding (as a result of “dumping bags”) of interested parties is questionable at best.
Case in point here:
Let’s get real honest here, if these addresses kept their staked TRU (or their delegates) and also this top address from 2023, the usage of the canceller function might not be in play.
For this TylerWallfacer, where the absolute amount of delegated TRU has fallen so much to such a small absolute threshold (Just 500,000 TRU from almost 8.5 million TRU), but yet calls for the canceller function to be used as a power mechanism. This is just exercising power without votes. But no matter: looks like TylerWallfacer has initiated the cancel function anyway.
Using a canceller function for inappropriate reasons and calling something an attack by those who are actually conflicted is plain wrong. Whose interest do you have in mind? Your own, or Truefi? So what happened to the 8 million TRU that voted back in 2023?
Let’s Talk Business
We want to be part of that change and it is apparent that Truefi needs a change and up to the first half of 2024: what progress has been made? Numbers don’t lie:
Recall that all three platforms had a lot of TVL (Clearpool less) through the crypto credit downturn of 2022. As a comparison, Maple has pivoted greatly into higher yielding RWA, with what looks like cornerstone lenders/borrowers since.
TVL can grow through one or a combination of two factors. The first is truly strong business development where value is presented. The second factor (admittedly to a lesser extent) is product innovation. But, one cannot exist without the other over time. On the business side, Truefi is blessed for being long standing in crypto and with a precious listing like on Binance (something both Clearpool “CPL” and Maple “MPL” do not). However, has this been leveraged? The one area we definitely want to and can help is on the product innovation side, and the main driver to make the proposal.
Instead, without huge wins in product deployment or TVL growth, the main service provider, Wallfacer, has gone out to propose at the time a near 4.5 million dollar value contract for 6 months (a 4 times increase from 1H 2024). Cicada’s contract calls for a current 1 million dollar incentive pay for simply onboarding 9 different borrowers (with TVL KPI being separate) on an existing product. Until some recent votes, voting has also turned apathetic in terms of numbers as well - far from a healthy backing of the trajectory of this protocol.
Let’s be brutally honest - this is the status quo.
Let’s look at the positives here (change is good!): we really wanted to keep ultimate ideas for Truefi under wraps since they can be taken and used by other protocols. Here are two.
Product Differentiation – Option Vaults:
For lending/borrowing this may become one of the most interesting product differentiation items. Maple has had significant traction with collateralized loans (which collateral is liquidated on the downside), but what if such products are offered with the chance for the borrower to sell call options on the collateral to lower the interest costs and a path to cash out? In certain circumstances, it is possible with this structure (because the call value is so high, and TVL being lower) that borrowers are actually paid! On the business development side, this can open up other protocol treasuries and do some interesting structures with Truefi.
Customized Vaults (or to some extent, index vaults):
Again, looking at Maple, we see collateralised lending to be a stronger product. So far however, no protocol has offered collateralized lending on the portfolio of tokens/coins. Here a vault token or the backbone knowhow can come quite in handy where a borrower can insert a number of different tokens (wrapped tokens etc) to be financed. While not all, we think an institutional or high net worth borrower has a portfolio of tokens they’d like to finance.
We are ambitious to build something on a platform that already has so many good assets and attributes to it. We are more than happy to work with other teams on Truefi and with the board to get new products, customize them as needed, and do our part to get TVL higher as this will be a driver to value for the TRU holder.
These are not short term goals as part of an “attack”, but longer term ones to really give Truefi a chance to win and regrow with what Peter Theil says, “When people want to zig, you might want to zag”.
In conclusion, we think we can be part of a much better Truefi. And we think we can offer this at a great value. But we know everyone won’t agree too. If economics and terms themselves are an issue, we can come back to the table to discuss it, and we’ll be happy to voluntarily cancel the proposal to do so.
