Background
Integration Challenges & Strategic Pivot
- Initial integration delays hindered TVL/vault underwriting targets until late January, necessitating a refocus on strategy, origination, and distribution to build long-term DAO value. Consequently, we focused efforts on deeper integration with key RWA partnerships, absorbing both LP product feedback and issuer barriers to capital access.
- A key insight we’ve uncovered is that RWA blockchain ecosystems face persistent issuer onboarding friction, often relying on dApps and operational teams for an integration process that remains resource-intensive. TrueFi shines respectively here given the simplicity of integrating with other RWA vault architecture.
- In addition, we see an emerging trend. Asset originators increasingly prefer to specialize in origination rather than operational complexities of running a dApp and getting smart contracts audited.
- TrueFi’s Line of Credit product is a critical tool in the tokenization value chain, with our roadmap and commercial strategy validated as essential building blocks for asset originators and supporting RWA Ecosystems.
Business Developments
1. Distribution Channels
- RWA and Overcollateralized Lending Ecosystem Integrations:
- Cicada open-sourced its rating methodologies to elevate underwriting standards, legal tokenization frameworks, and address LP demands. These include Credit, Stablecoin, and a soon-to-be publicized Structured Products methodology.
- Partnered with Plume to integrate TrueFi Lines of Credit as base contracts for Plume’s nALPHA vaults on Nest. We expect this to create long term synergies for TrueFi’s credit products given the complementarity of Lines of Credit and Nest’s Index Vault architecture. Constructive discussions are underway with analogous ecosystems.
- We expect Plume’s imminent mainnet launch and future RWA ecosystem integrations to drive future TVL growth on TrueFi.
- Partnering to launch differentiated-tech to manage PayFi lender opportunity.
- In addition, our public ratings are expected loss-based analysis that we expect to become instrumental in the rollout of RWA across overcollateralized lending protocols. During the period we signed one commercial agreement with the overcollateralized lending protocol Mystic FInance, to be their exclusive RWA Risk Manager. We are in active discussions with two other protocols. Net-net, we believe ratings will unlock further TVL opportunity for TrueFi as ABL assets can be collateralized for leverage.
- Off-Chain Capital Strategy:
- Our origination pipeline has prioritized crypto-native capital opportunities where access to private credit is limited or a use of stablecoins is a key unlock. This has resulted in an increasingly targeted strategy on “stablecoin-enabled” businesses. While we are reticent to open source our pipeline due to commercial concerns, we are seeing increasing demand to borrow stablecoins directly vs. fiat indirectly. This gives us continued confidence that an on-chain native lending product to real world businesses using stablecoins can provide differentiated alpha to off-chain capital.
2. Legal & Compliance Infrastructure
- On the back of stablecoin adoption trends, we finalized our private credit SPV/subscription docs, tested operational rails with internal capital deployments.
- Initiated RIA registration to position as a regulated entity for traditional capital access, leveraging TrueFi’s backend infrastructure.
- Rationale: Stablecoin-enabled real yield opportunities justify compliance investments to bridge legacy capital barriers.
3. Borrower/Issuer Pipeline
- We have a growing issuer pipeline, with five High Conviction Issuers in the Line of Credit structuring process and three Issuers interested and with differentiated risk/return profiles, but in an earlier diligence stage
- Given the integration work is now complete with Plume, and discussions with other ecosystems are progressing, Cicada is focused on supporting Issuer legal structuring, onboarding to TrueFi, and integrating to RWA Indices for capital aggregation
Budget Allocation & Renewal Ask
Expense Transparency
Funding Request
- Given TRU price volatility, we are seeking parity with L6M funding at a minimum to sustain commercialization of TrueFi infrastructure. Cicada will support the remaining budget through other complementary commercialization efforts with RWA ecosystems.
- Resources are directly tied to scaling Lines of Credit adoption, ecosystem partnerships, and compliance milestones.
Strategic Ask
We ask the DAO to renew support with a 6 month base proposal of 7m TRU + TVL-based performance kicker, recognizing:
| TrueFi Token Grant Summary | Prior Proposal | New Proposal |
|---|---|---|
| Tokens Issued | 4500000 | 7000000 |
| Average Mkt Price | $0.055 | $0.035 |
| $ Equivalent (Thsds) | $247.5 | $245.0 |
| Budget | 232.2 | 280.0 |
| vs. Budget | $15.3 | ($35.0) |
- Validation: Progress in ecosystem integrations and legal groundwork demonstrates scalable pathways for TVL growth.
- Opportunity: Regulatory advancements and Plume partnership position TrueFi as a conduit for traditional capital inflows.
- Commitment: Continued focus on reducing origination friction aligns with TrueFi’s long-term RWA vision.
