TFIP-41: TrueFi Reconstitution and Transition to Brila

[sebdavies]

Summary

TFIP-41 proposes the formal reconstitution of TrueFi into Brila, a streamlined and restructured organization designed for sustainable capital deployment across three operating pillars: NFT finance, real-world asset vaults, and treasury management solutions.

This proposal outlines the wind-down of the TrueFi Foundation in the British Virgin Islands, the formation of a new Panama-based Brila structure of entities, the migration process from TRU to BRLA, the allocation framework for the new token, and the transition in governance. It is intended to be the final TFIP under the TrueFi banner.

Context and Recap

Over the past year, TrueFi has undergone a deliberate restructuring process. The organization has been streamlined, operational overhead has been reduced, the balance sheet has been strengthened, and governance inefficiencies have been addressed. Capital allocation has been reoriented toward productive, revenue-generating verticals.

Today, the project is anchored by three core pillars. The first is NFT finance through Cyan, which provides infrastructure enabling NFT-based financing and liquidity access. The second is real-world asset vaults, which facilitate institutional credit extension to vetted borrowers, with yield derived from interest income rather than token incentives. The third is treasury management solutions through Elara, a dollar-referenced treasury asset designed to preserve capital while generating controlled yield and serving as a base liquidity layer across the ecosystem.

These verticals represent the economic engine of the reconstituted project. The restructuring phase is complete. We’re into the execution phase now.

Why Reconstitution Is Necessary

Despite meaningful operational progress, the legacy TrueFi structure imposes structural constraints. The historical token supply creates overhang. Governance design reflects an earlier stage of the protocol’s life. Prior loan history and reputational complexity introduce friction. Over time, these factors limit flexibility and strategic optionality.

While significant effort has gone into repairing and stabilizing the protocol, sustainable forward growth requires a clean capital structure and a refreshed governance architecture. TFIP-41 formally separates the future operating platform from the historical constraints of the prior structure.

Proposal Overview

Upon approval of this proposal, the existing TrueFi Foundation entity in the British Virgin Islands will be formally wound down in accordance with applicable legal procedures. The governance forum will remain accessible for creditor-related matters, including ongoing discussions related to Archblock and similar legacy items.

A new Brila-related structure of entities will be established in Panama. These entities will issue the BRLA token and serve as the legal and operational steward of the ecosystem going forward. It will govern capital allocation, treasury strategy, and execution across the three pillars. This structure provides a clean and flexible operational base aligned with the long-term direction of the project.

Token Migration: TRU to BRLA

35% percent of the total BRLA supply will be reserved for existing TRU holders. The remaining 65% will be allocated toward ecosystem development, operational sustainability, balance sheet strength, and strategic growth initiatives.

A migration portal will be available in the coming weeks, where TRU holders may deposit their TRU for a 30-DAY migration window (from launch). Upon deposit, holders will mint BRLA tokens. The conversion ratio between BRLA and TRU will be determined based on the total amount of TRU deposited into the portal relative to the fixed forty percent allocation reserved for TRU holders.

This structure ensures that the full allocation reserved for TRU holders is distributed transparently and proportionally based on participation. If more TRU participates in migration, the per-TRU BRLA allocation will adjust accordingly. If less TRU participates, the conversion ratio will reflect that lower participation. TRU not deposited during the migration window will not convert after the window closes. Detailed technical specifications and timing will be provided prior to the launch of the migration portal.

Economic Model and Value Accrual

Brila is structured around three operating pillars: NFT finance through Cyan, real-world asset lending through the legacy vault architecture, and treasury management solutions through Elara. Each of these verticals is designed to stand on its own economically. They are not dependent on token incentives to manufacture activity. They generate revenue through financing spreads, structured credit, and treasury yield strategies. Cyan and treasury management solutions in particular offer meaningful economic spread potential, while the lending vaults provide disciplined, interest-based yield derived from real borrowers.

The objective with BRLA is fundamentally different from earlier crypto token models. The project will not rely on emissions to incentivize activity or bootstrap artificial liquidity. There will be no programmatic inflation designed to stimulate short-term engagement at the expense of long-term dilution. Instead, the operating businesses are expected to generate revenue independently. Protocol revenues will accrue to the Foundation treasury and may be deployed by governance to support the long-term sustainability of the ecosystem, including grants, liquidity initiatives, partnerships, and other strategic treasury operations.

A key principle of the reconstitution is emission discipline. The historical TRU structure carried significant token overhang relative to the economic output of the protocol. BRLA is being introduced with the intention that token supply growth remains tightly controlled and aligned with the long-term sustainability of the ecosystem.

Any future emissions will be carefully evaluated by governance in the context of the protocol’s development and overall supply dynamics. Governance may from time to time determine adjustments to token supply or treasury operations intended to support the stability and resilience of the ecosystem, which could include discretionary market operations involving BRLA.

The objective is to ensure that protocol activity is supported by sustainable participation and real usage of the network rather than by token issuance designed to artificially stimulate short-term engagement.

BRLA is intended to function as a governance and coordination mechanism within the ecosystem and does not represent any ownership interest, claim on assets, or entitlement to revenues generated by the protocol or the Foundation.

This shift addresses one of the structural imbalances of the legacy system. TRU’s circulating supply expanded materially during periods when underlying protocol activity remained limited. The reconstitution aims to realign token supply dynamics with the sustainable development of the ecosystem.

BRLA is introduced with a focus on responsible supply management and long-term network coordination, avoiding structural overhang from historical emissions and reducing reliance on token issuance to stimulate participation.

Ecosystem and Launch Venue

BRLA will launch on the HyperEVM and position its economic hub within the Hyperliquid ecosystem. While the project will remain cross-chain in product deployment, the primary token and liquidity center will sit on HyperEVM.

This represents a deliberate strategic shift. Centralized exchange listings are operationally costly, structurally restrictive, and often misaligned with smaller, capital-disciplined projects. The legacy TRU footprint on centralized exchanges served a purpose in an earlier phase of the market. For Brila, competing on product quality and economic fundamentals is more important than maintaining expensive exchange relationships.

The Hyperliquid ecosystem offers a more aligned environment: on-chain liquidity, transparent market structure, and lower structural overhead. By anchoring BRLA within HyperEVM, the project aligns itself with an ecosystem that reflects the current direction of market infrastructure while preserving the flexibility to operate across chains.

Governance Transition

Upon completion of the migration process, TRU governance will formally sunset. A new governance framework under BRLA will be introduced by the Panama-based entity. The new governance architecture will be designed to enable clearer capital allocation authority, operational agility, reduced structural deadlock, and stronger long-term economic alignment.

A separate governance framework document will be introduced to detail the mechanics of BRLA governance.

Treatment of Legacy Matters

The reconstitution does not extinguish or ignore legacy matters. However, the loans and defaults being administered by Archblock are not the responsibility of TrueFi (nor have they been since the DAO was first formed). The existing forum will remain accessible for creditor communications. Archblock and related recovery processes will continue independently. Historical obligations are not erased by this proposal.

The objective is to separate forward-facing operations from structural complexity and historical governance while maintaining transparency and continuity where required.

Rationale

TFIP-41 resets the capital structure, removes historical token overhang, eliminates governance inefficiencies, strengthens balance sheet flexibility, and aligns token supply with productive, revenue-generating verticals. The reconstitution enables the project to operate as an economically sustainable platform rather than as a legacy governance shell constrained by its past structure.

Implementation Timeline

Following publication, the proposal will proceed through the standard governance voting process. Upon approval, legal wind-down procedures for the TrueFi Foundation will begin, and the Brila entity formation process will be completed. The migration portal will then open for a defined window, after which BRLA issuance will be finalized and TRU governance will sunset. Specific dates will be published prior to execution.

Closing Statement

TrueFi has spent the past year cleaning up its structure, strengthening its balance sheet, and building revenue-generating verticals designed for durability. TFIP-41 formalizes the transition from restructuring to execution.

This is not an abandonment of TrueFi’s history. It is a structured evolution beyond its constraints. The next chapter begins under Brila.

[ryan.rodenbaugh]

Have you coordinated with the centralized exchanges? From a quick look at Etherscan, at least 60% of TRU looks to be held on centralized exchanges.

[Jamm]

This is a terrible idea. Y’all think y’all slick. This was your whole game plan the entire time. There is no guaranteed that we will even receive our tokens. After the migration is complete, let alone, we have to trust that everything’s implemented perfectly through the migration process. Now I truly believe this is a f****** scam. This new team has f***** is long time holders completely. Top 10 holders is the ones that’s going to benefit the most. They would implement everything in day one and eat up the whole supply. That means us little people won’t get nothing. I’m already down 23k. I don’t know by y’all but that’s a lot of money to me. Let alone now we have to possibly do this migration b*******.. That’s the reason I kept on delaying everything delaying multiple projects ongoing and ongoing and ongoing. It’s amazing that nothing’s completely done after the rebrand but now you have all this whole planned. Unbelievable

[ismaiL]

I see you dude. I started this year by losing at least 15k due to BLOK is gone. I guess you know them. They said it is all and we could do nothing.

These guys, at least, still stand and try to do something new. I am a TRU holder and wait for them to be succesful. Nothing to do.

[sebdavies]

Thanks for raising this. Yes, we will be reaching out to centralized exchanges as part of the transition process.

That said, the practical reality is that many TRU holders will likely need to withdraw their tokens to a self-custody wallet in order to participate in the migration. Given the current size of the TRU market cap and the fact that the new ecosystem will anchor its liquidity on HyperEVM, exchanges are unlikely to support an automatic migration mechanism. In fact, I’d be shocked if they did.

Because of that, the expected process for most holders will be to withdraw TRU from exchanges to a wallet and then use the migration portal directly. We will provide clear instructions and walkthroughs to make this as straightforward as possible, especially for users who may not have used self-custody wallets before.

We appreciate the question and will continue sharing updates as coordination with exchanges progresses.

[sebdavies]

We understand why this feels frustrating, especially if you have been holding TRU for a long time and are already sitting on losses. A lot of people in this community are in the same position, and it is not something we take lightly.

To be very clear, the migration is not designed to benefit a small group of holders or insiders. The allocation for existing TRU holders is fixed as part of the proposal, and the conversion ratio will be determined transparently based on how much TRU is migrated during the window. No one is able to “eat the whole supply” on day one.

There is also no scenario where tokens simply disappear. The migration contract and distribution process will be fully transparent and verifiable on chain, and the details will be shared before the migration portal opens.

The reason for the reconstitution is that the current structure around TrueFi is tied to a number of legacy issues that have limited the protocol’s ability to move forward. The goal of this proposal is to separate the project from those constraints and give it a path to build again with sustainable products and revenue.

We understand that not everyone will agree with the direction, and that is fair. The purpose of the forum discussion is precisely to surface those concerns and address them openly before anything moves forward.

[Narim]

Guys ! I’m writing this with a heavy heart when I saw this post, and to be honest, I have to fight back tears. I remember joined this project three years ago, full of belief and hope. Today, watching everything unfold, I’ve lost 97% of that investment. Not just in money, but in trust and hope. Some of you might say: “we never advised you to join this and you are still free to leave”. And you’re right. But we didn’t join only because of a tip. We joined because we believed in an idea, a vision, and a team that today, leave us behind. Seb, it is clear you are now the new BOSS in charge and that you feel the need to make changes : move on from what you call the “legacy” of the past. Honestly, I am deeply worried about what this means for people who have been here from the beginning as a lot of things are uncertain and unclear. Now, you are making these critical decisions as you want to rebuild the project with sustainable products and revenue. Please don’t just think about the current team. Please remember the real people whose are the supporters with their entire life savings tied up in this project. Thank you.

[Don]

TRU holders have generally suffered significant losses, not just you, but me too. My friend also followed my analysis of TRU (but I didn’t offer any investment advice) and held a large number of TRU tokens. Initially, I complained a lot about the losses, even arguing with the former community moderator. But since the new team arrived, I’ve shifted from complaining about the price to participating in the building process. Of course, this attitude isn’t entirely positive, as I’ve often criticized the delivery performance over the past year. However, the team’s responses are always timely, friendly, and they listen to suggestions and opinions. From Seb’s responses and communication, it’s clear that Seb is a good leader, at least someone who cares about the project. As the member above said, projects can be abandoned at any time, and nothing can be done. But Seb is leading TrueFi to rebrand and continue moving towards new goals and directions, so at least we still have hope. Of course, saying and doing are two different things, and we still need time to observe the delivery and revenue data. Of course, I believe the team members won’t give us any investment advice, so whether we wait for the swap or sell our TRU is a personal decision.

[sebdavies]

I want to acknowledge something directly. Many long-term TRU holders have experienced very significant losses. I understand that those losses are not just financial. For many people they also represent lost trust, lost expectations, and years of believing in a vision that did not unfold the way anyone hoped. That is real, and it deserves to be acknowledged.

It is also important to recognize that the price decline many holders have experienced is not unique to TrueFi. Over the past few years the broader market for smaller altcoins, particularly projects without sustainable revenue models, has repriced dramatically across the entire sector. Many projects in similar positions have declined 90%+ during this period. That context does not make the losses easier, but it is part of the reality of the market environment.

Over the past year we have been transparent about the situation the protocol was in and the work being done to address it. Through DAO reports, forum discussions, blog posts, and conversations in Telegram, the team has been documenting the challenges inherited from earlier structures and the steps being taken to rebuild the project around sustainable products and real revenue.

The current team and board did not create the outcomes of the past few years, but we are now responsible for deciding what happens next. The reason we are proposing this reconstitution and transition is precisely because the existing structure around TrueFi has accumulated a number of legacy issues that make it extremely difficult for the protocol to move forward in its present form.

Doing nothing would likely mean continued stagnation and, eventually, the project fading away entirely. The goal of this proposal is to give the ecosystem a realistic path to rebuild.

I also want to be clear about one thing. There is no “boss” of the community. The purpose of the forum and the governance process is for the community to evaluate the proposal, challenge it, and ultimately decide whether it is the right path forward.

On the suggestion that I am somehow the “boss,” that is simply not how this works. I participate in the forum and answer questions because I believe transparency matters, especially during a transition like this. Governance ultimately belongs to the community and the token holders. The board and contributors can propose, explain, and build, but engaging publicly here is precisely how we avoid decisions being made behind closed doors.

Your concern about people who have supported the project from the beginning is understood. Those early supporters are part of why the project still exists today. The intention behind the proposal is not to leave them behind, but to create a structure where the project can realistically survive and rebuild. This is a migration, not a cancellation.

Not everyone will agree with the direction. That is completely fair. The discussion happening here is exactly how governance should work, and we appreciate you raising your perspective.

[Suvicrypto]

It’s worth noting that this project since the 2022 bankruptcies of so many companies like Alameda, 3AC, Celsius and the like left Truefi without a product fit.

And afterwards, so many service provider contracts went to Archblock or Archblock affiliated firms from Truefi. As you can read on the bankruptcy and cases with Justin Sun, this very same Archblock is accused some pretty appalling financial misconduct. And currently, Archblock is filing for bankruptcy.

The Truefi TRU token has reached the minting ceiling at 1.5 billion tokens, and there is not more mintable treasury.

To give the best chance for survival beyond a meme-coin is to as Seb says is a reconstitution.

Its painful to face this, but I see this as the only way forward.

[sebdavies]

One of the core issues the proposal is trying to address is exactly what you are pointing to. The environment the protocol was originally built for changed significantly after 2022, and the structure that supported TrueFi in its early years no longer provides the flexibility needed to rebuild and execute today.

Beyond that, the original treasury was handed over to the current Board in a very difficult state. A number of legacy service agreements were costing the DAO roughly $450k per month. Those agreements had to be wound down, which takes time and cannot simply be switched off overnight. At the same time, the TRU token has effectively reached the limits of what it can support. With the minting cap already reached, the ecosystem has very little capacity to fund development, incentivize new activity, or recapitalize the system around new products.

That is ultimately why the proposal focuses on reconstitution. The intention is not simply to rename the project, but to create a structure that can support new products, generate sustainable revenue, and give the ecosystem a realistic path forward. Part of that also involves establishing a fresh brand that is not encumbered by the negative reputation surrounding earlier legacy projects and loans that have not been part of the DAO since the spin-off.

It is not an easy step, but in many ways it is similar to what happens when a company restructures or recapitalizes in order to continue operating rather than slowly fading under an outdated structure.

We appreciate you engaging with the discussion.

[cp0x]

I voted FOR this proposal

I believe it’s time to take action, as standing still won’t solve the project’s current state.

The project needs to evolve, and that requires meaningful and radical steps.

I understand perfectly well that with relatively equal TVL, token holders will receive three times fewer tokens (35% according to the plan, if absolutely all TRU migrates), but the new product has potential for growth.

[Jamm]

“35%/65% split” with no Total Supply info on this proposal is a massive red flag.

​1. The “Infinite Dilution” Trap

​By giving percentages (35% to holders, 65% to the treasury/team) without a Max Supply number, they are using a shell game.

• ​The Math: 35% of 1 billion is a lot different than 35% of 100 billion.

• ​The Scam: If they don’t set a cap, they can technically set the supply to 100 Billion tokens. Your “35% slice” would be spread so thin that the individual price of a Brila token would be fractions of a cent, while the team controls a massive 65% “war chest” they can dump to fund their new company.

​2. The “Treasury Hijack” (TFIP-37 & TFIP-41)

​You mentioned they already minted the rest of the TRU. Here is why that matters right now:

• ​They used TFIP-37 to mint the remaining TRU (bringing the total to the ~1.45B cap) into a treasury they control.

• ​Now, in TFIP-41, they want to move that entire treasury into “Brila.”

• ​The Red Flag: They are essentially taking the “community’s” tokens and moving them into a new, opaque structure where they (the team) get 65% of the power. They are using the community’s own money to out-vote the community.

​3. Missing “Fully Diluted Valuation” (FDV)

​In crypto, investors look at FDV (Price \times Max Supply) to see if a project is overvalued. By hiding the supply, they are hiding the FDV.

• ​If they launch Brila and it turns out the supply is 10 billion, but they didn’t tell you, you might buy in thinking it’s “cheap,” only to realize the team has billions of tokens waiting to hit the market.

Proposing a migration without these numbers is a violation of basic transparency. It suggests the team is leaving the door open to print an infinite amount of tokens, effectively ‘milking’ the value out of the original TRU holders. We demand a Technical Yellow Paper detailing the supply before this proposal moves to a final vote."

"The community cannot vote on a 35%/65% distribution split when the Denominator (Total Supply) is unknown. Percentages are meaningless without a fixed supply cap.

So many red flags. I cannot believe that this is even a vote. If this wasn’t a DAO this criminal. It’s illegal. Don’t vote on this. Top holders will only benefit.