Unlocking Exponential LP Token Liquidity

Ideas
1

Introduction

Umoja Labs would like to propose that the TrueFi community invest 1.5mm into research and development (R&D) to determine how best to unlock better secondary market liquidity for TrueFi LP tokens. Specifically, the R&D would determine if the real-world-asset token bonded curve (RWA TBC) model is a viable pathway to

  1. eliminate liquidity provider lock-in by increasing secondary market liquidity for LP tokens, and;
  2. either (a) transform the TRU token into a flatcoin (b) introduce a new TrueFi token, or (c) create a multi-protocol token that is bonded to the value of TrueFi’s tokenized RWAs (and thus serves as a higher-liquidity, exchangeable asset for said tokenized RWAs).

In our research, we found that TrueFi could exponentially increase its LP token liquidity by enabling a RWA TBC either between TrueFi’s originated assets and the TRU token or between such unerlying assets and a new TrueFi token. The bonded token would be considered a flatcoin. Flatcoins, underpinned by tangible assets like bonds or real estate, offer a decentralized yet stable value, algorithmically linked to price indexes like the U.S. CPI.

We believe that TrueFi can make the model the most user-friendly and the most sustainable in the industry by introducing simply allowing LPs to exchange their LP tokens for a single flatcoin, enabling the TrueFi protocol to purchase its own originated assets at a discount & generate recurring revenue in the process.

Objectives:

  1. Exponentially increase secondary market liquidity for LP tokens
  2. Increase protocol revenues by enabling re-purchase of LP tokens at a discount by enabling LP token exchange with a protocol flatcoin
  3. Establish TrueFi as the only RWA protocol that enables instant secondary market liquidity

Proposal:

Today we have two proposals we wish to get feedback on.

  1. TrueFi community invest 1.5mm TRU for additional R&D of the RWA TBC model. The investment will be paid out on a milestone basis - which each milestone requiring transparent findings/update reporting to the TrueFi community.

  2. Execution of R&D with a final recommendation to the TrueFi community (via a proposal) to either (1) develop the model into TrueFi’s existing protocol ecosystem, or (2) not develop the model.

Additional Resources:

You may find the draft white paper of our research here.

You can find a video walkthrough by myself here.

Let us know your thoughts. We would love feedback from lenders, managers, borrowers, and token holders on this new model before moving to a formal proposal.