TrueTrading Asset Management (“TAM”) – Loan Proposal

Hello TrueFi Community,

The credit investments team behind TrueTrading, an affiliate of TrustToken, is pleased to announce the formation of TrueTrading Asset Management (“TAM”), an independently operated affiliate of TrustToken. TAM is pleased to engage with the community to put forth a proposal that we believe is in the best interest of the TrueFi protocol and the TRU token holders.

TrueTrading Background
TrueTrading, an affiliate of TrustToken, on behalf of the TrueFi community, has led originations of over $1.2 billion in loans in the protocol’s stablecoin portfolios, TUSD, USDC, USDT and BUSD (together, the “Flagship Portfolios”). Over the last year, TrueTrading has successfully onboarded over 50 borrowers and is currently managing over $300 million in outstanding principal balance. With a focus on high yield, short duration credit, TrueTrading has developed a track record of capital preservation with zero defaults to date. During this time, TrueTrading has successfully navigated volatile market conditions across the highly correlated Flagship Portfolios by focusing on fundamental credit risk analysis. In the last twelve months, TrueTrading has generated over $17.5 million in interest income for protocol lenders resulting in a weighted average IRR of 9.5% while maintaining minimum asset coverage of 4.0x book equity and 1.0x unencumbered tangible assets.

With TrueFi’s debut of the Lending Marketplace, TrueTrading has successfully launched multiple new portfolios utilizing the credit and underwriting strategy employed in the Flagship Portfolios. In the first quarter of 2022, TrueTrading has broadened its investment targets beyond crypto-native financial institutions to include disruptive financial technology companies (“NeoFi” targets) that require financing to support hyper-growth.

Over the next three quarters, TAM intends to build upon this momentum by (a) significantly expanding TrueFi’s presence as a leading specialty lending platform in the NeoFi segment, (b) supporting new portfolios focused on non-crypto opportunistic credit, and (c) executing on DeFi yield and on-chain tactical opportunities.

Proposal & Use of Funds
Over recent months, TAM has cultivated a proprietary pipeline of lending opportunities that we believe will out-perform on a risk-adjusted basis. With the success of the Flagship Portfolios, TrueFi is in the fortunate position of receiving significant inbound interest from potential borrowers that TAM considers best-in-class.

TAM is proposing to utilize idle capital from the Flagship Portfolios to:

(i) Inform TrueFi’s general product development roadmap;

(ii) Explore new opportunities to originate and deploy digital assets; and

(iii) Build a critical mass of volume to attract qualified lenders and independent portfolio managers seeking to launch their respective strategies on TrueFi.

TAM is seeking approval from the TrueFi community to commit to provide $100 million in funding from the Flagship Portfolios to be called in $5 million requests with the following stipulations:

  • Loans to TAM to be made from Flagship Portfolios with the lowest current utilization, i.e., idle funds.
  • Loans to TAM will be priced based on prevailing market conditions subject to a floor of 8.0% and max cap of 10.0%.
  • Loans to TAM shall have an average term between 180 and 365 days.
  • TAM shall not be entitled to any TRU incentives that may be approved by token holders for the purpose of raising new outside investor capital.

Proposal Objectives
Listed below are key proposal objectives that TAM believes will positively impact TrueFi over the near-term.

  • Increase the number of opportunities for new lenders to build interest in TrueFi.
  • Potentially reduce the need for TRU token incentives that are costly and highly dilutive to the token holders.
  • Generate revenue for the protocol through fees assessed on every deployed loan.
  • Utilize idle funds to generate incremental interest income for protocol lenders and TRU stakers allowing for more productive use of funds in a market flush with liquidity.
  • Execute on new lending opportunities to inform and build a better TrueFi product over time.

TAM is truly optimistic about the future of TrueFi and is appreciative of the opportunity to work closely with the community. We welcome feedback and the token holders’ vote on this loan proposal so we may move forward in earnest.

Thank you for your consideration.

  • Yes, I support this loan request and TAM’s objectives for the benefit of TrueFi.
  • No, I prefer not to commit capital to this loan request.

0 voters

1 Like

This is wonderful, thank you for putting this together this proposal @RDharia! This will be great for TrueFi and allow TAM to bring all kinds of high quality opportunities onto the protocol!

I also see this significantly helping the DAO Portfolios deploy more capital which is an important part of the Plan to Restart TVL and TVO Growth.

Snapshot vote for this proposal is live:

1 Like

Awesome, thank you Tyler. Seeing strong support on the Snapshot so far. Will be posting a more detailed note here soon about how lenders should think about the split between TAM Portfolios and DAO Portfolios, and which ones they might want to participate in.