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How TrueFi Is Transforming DeFi Zero-Collateral Loans

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The final phase of the TrueFi launch should initiate the beginning of a highly functional, cross-chain uncollateralized lending platform, equally able to serve institutions, retain users, and lend to other protocols.

Defi took off in 2020 in a major way, with applications such as decentralized exchanges and decentralized lending exploding in popularity. Existing DeFi lending platforms are focused on collateralized lending, an obvious choice for peer-to-peer use, but have not expanded on their lending capabilities.

This is where TrueFi comes in, aiming to become the industry standard for blockchain-based uncollateralized lending – like an enterprise-grade credit card. Using the platform’s native cryptocurrency, TRU, and its dollar-backed stablecoin, TUSD, TrueFi will have first-mover advantage in this untapped sector of the market.

What’s the Difference Between Collateralized and Uncollateralized Lending?

Some of the most prominent DeFi applications on the market, including MakerDAO, AAVE, and Compound, allow for decentralized lending, but only if the borrower puts up collateral – usually in excess of the amount they take out. These platforms create a situation where the borrower doesn’t have to sell their cryptocurrency to put it to work in the DeFi ecosystem. This has created opportunities for retail users to function as micro-banks, granting risk-adjusted loans in exchange for an agreed rate. TrueFi wants to take the DeFi lending industry to the next level, and take another big bite out of the banking sector.

TrueFi is the first uncollateralized lending platform (aside from AAVE flash loans) in DeFi, currently serving respected crypto-native institutions. The borrowing firm will sign a legally enforceable loan agreement with TrustToken, Inc to take out a loan, then let TrueFi users assess whether or not the borrower’s request fits within their risk tolerance threshold for a loan.

This all takes place on the TrueFi forum via a New Borrower Request – a system that, since the Phase 1 launch of TrueFi, has already cleared borrowers like Alameda Research, Wintermute Trading and Invictus Capital. New borrowers can initially access smaller loans, averaging between $1 to 2 million; as they develop their reputation and make their loan repayments on time, they can access larger loan amounts, upwards of $10m.

TrueFi is preparing to launch the next phase of its platform, with milestones through to August 18th of this year, through a roadmap that sees the platform becoming more lucrative and streamlined to use for borrowers, lenders and stakers alike. TrueFi will release the next generation of its platform across four phases, with Phase 1 already delivered and usable at TrueFi.io.

The roadmap initially started in November 2020 with the Version 1 (V1) network launch, allowing pre-vetted companies to begin the onboarding process to request capital. Institutional borrowers had to complete a KYC/AML review and sign their loan agreements before they could start taking out their first loans. Having an MVP is an essential first step, but TrueFi’s roadmap highlights just how much further they are planning to go.

Establishing Dominance with Network Upgrades

Initially only available through interacting with TRU and TUSD, TrueFi plans to become an on-chain lending platform that integrates with a variety of protocols and cryptocurrencies. This process will not happen overnight, which is why TrueFi’s in-depth roadmap helps paint a picture of exactly how they will make this goal a reality. Currently in Phase 2, with an expected ship date of February 19, TrueFi is adding a Liquid Exit, an improved user staking model, and full on-chain governance. These upgrades will incentivize platform use, making it easier for users to interact with, govern, and capture returns from the platform.

In Phase 3, TrueFi will continue to expand on its platform interoperability, introducing new USD-backed stablecoins, adding lines of credit, creating a more robust credit model for onboarding new borrows, and allowing all loan and line of credit tokens to be individually tradable. Focusing specifically on USDC, the largest fully collateralized dollar-backed stablecoin on the crypto market, TrueFi wants to expand its operations, leading to more widespread adoption by the DeFi community. Another critical attribute, the introduction of credit lines, will allow borrowers to open long-term loans, a highly requested feature from current borrowers and a world-first for DeFi.

The Endgame for Uncollateralized Lending

The final phase of the TrueFi launch should initiate the beginning of a highly functional, cross-chain uncollateralized lending platform, equally able to serve institutions, retain users, and lend to other protocols. With the plan to add support for a wide variety of ERC20 tokens, increase lending pool options, and allow other protocols to partake in loan token and line of credit options for primary fundraising, TrueFi could very well establish itself as the market leader for uncollateralized loans.

TrueFi doesn’t plan to stop developing when Phase 4 is complete, and already has other considerations it is working on. Until Ethereum 2.0 introduces full PoS, allowing for high transaction throughput, TrueFi is looking into layer-two scaling options. They also have protocol-to-protocol lending on their agenda, but have more important features to implement first. All told, 2021 looks set to be an exciting year for TrueFi and a new chapter for DeFi lending.

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Having obtained a diploma in Intercultural Communication, Julia continued her studies taking a Master’s degree in Economics and Management. Becoming captured by innovative technologies, Julia turned passionate about exploring emerging techs believing in their ability to transform all spheres of our life.



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Coinbase S1-Filing with US SEC for Direct Stock Listing Goes Public

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In the S-1 filing, Coinbase has made crucial disclosures to the public with its plans of launching direct stock listing on Nasdaq. As per its recent valuations, Coinbase pegs a value of over $100 billion.

Crypto exchange Coinbase is inching closer to its direct stock listing on Nasdaq. On Thursday, February 25, Coinbase submitted its S-1 filing with the US Securities and Exchange Commission (SEC), thereby making it public for the first time.

The recent submission is a crucial step for Coinbase’s direct stock listing on Nasdaq. The S1 filing with the SEC offers a deeper insight into Coinbase’s business. All the disclosures effectively work as a pitch to the investors. Before this, Coinbase submitted its confidential draft document to the US SEC in mid-December.

The rumors of Coinbase’s public listing first emerged during last summer of 2020. Over the last few weeks, Coinbvase has been releasing its shares in the secondary market to investors. As per its latest share offering, Coinbase’s valuations spiked above $100 billion with a per-share price value of $373. The official blog post for Coinbase notes:

“Coinbase Global, Inc. today announced that it has filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission (the “SEC”) relating to a proposed public direct listing of its Class A common stock. Coinbase intends to list its Class A common stock on the Nasdaq Global Select Market under the ticker symbol “COIN”.

Coinbase has confirmed that it will take the help of Goldman Sachs, JPMorgan Securities and Citigroup to “assist us with respect to certain matters relating to our listing.”

Coinbase’s Strong Growth Story

Over the last two years, Coinbase has registered strong growth with a major spike in the customer base. By the end of 2018, Coinbase valuations stood at $8 billion and have multiplied 12x by now. As Coinbase noted:

“We have grown quickly and in a capital-efficient manner since our founding. For the years ended December 31, 2020 and December 31, 2019, we generated total revenue of $1.3 billion and $533.7 million, respectively, net income (loss) of $322.3 million and $(30.4) million, respectively, and Adjusted EBITDA of $527.4 million and $24.3 million, respectively.”

After registering a $30 million loss in 2019, Coinbase reported $322.3 million net income as its first positive year in 2020. However, Coinbase has noted that as it expands its operations, its expenses will continue to grow simultaneously. The crypto exchange said:

“We expect our operating expenses to increase significantly in the foreseeable future and may not be able to achieve profitability or achieve positive cash flow from operations on a consistent basis, which may cause our business, operating results, and financial condition to be adversely impacted”.

Other business news can be found here.

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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.



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Nash: Bridging Gap between Fiat and Crypto

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Nash Link is a solution for merchants to accept cryptocurrency without setting up a blockchain wallet.

Nash specializes in providing the best fiat/crypto gateway services for both retail and business customers, combining the lowest prices and fees with high-security wallets. This exchange service is fully licensed to operate in Europe.

For BTC, ETH, NEO and USDC, Nash offers 0% fees. This is possible because Nash operates its own crypto-crypto exchange. Nash’s unique Layer-2 exchange provides the same performance as centralized exchanges without taking custody of funds.

For other crypto assets, tradeable on Layer 1 user wallets, Nash charges just 1% fees, with no hidden slippage fees.

What’s more, Nash provides the safest software wallet by using secure multi-party computation (MPC) technology. MPC ensures a user’s full private key is never used to sign transactions and allows for security policies like address whitelists. Nash never has control over user funds.

On the business side, Nash offers its fiat gateway services as a white-label solution for third parties. Fees remain as low as 1%, with no tricks like huge asset mark-ups. Nash is a highly competitive solution for projects seeking a licensed fiat gateway for their platform and token.

Nash Link is a solution for merchants to accept cryptocurrency without setting up a blockchain wallet. Nash pays merchants the exact fiat price they set in their preferred national currency (€, £ or $) with 0% fees, managing risk around price volatility This is also possible thanks to Nash’s Layer-2 exchange.

In 2021, Nash will expand into digital banking services. High-interest DeFi-staking products will go live in Q2. In Q3, Nash will offer national currency checking accounts (with IBANs) on its platform. These will enable an even simpler savings product where users can easily deposit cash and lock it in a DeFi-powered crypto savings account. With a debit card arriving in Q4, Nash will seamlessly integrate traditional and crypto finance by the end of the year.

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Federal Reserve Wire and ACH Systems Back Online after Outage Affecting Exchanges

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Some other services offered by the Fed were also disrupted some of which include, FedLine Advantage, FedLine Command, FedLine Direct, FedLine Web and FedMail.

For an hour, the Federal reserve wire and ACH systems were down. During the Wednesday downtime, a number of US-based crypto exchanges was affected.

The systems allow the Fed to send wires and settle the transactions in real-time. Fedwire offers real-time settlement across accredited institutions. Gemini and Kraken reported delays in Federal Reserve wire and automated clearing house transactions. But the severity of it was much greater as no bank was able to send or receive wires. During the downtime, many in the crypto community were quick to point out that Blockchain could serve the same purpose without ever experiencing a downtime period. In line with blockchain, it was also a perfect moment to sell Bitcoin as the best form of money.

Some other services offered by the Fed were also disrupted some of which include, FedLine Advantage, FedLine Command, FedLine Direct, FedLine Web and FedMail.

At the time, the Fed in an effort to curb panic was quick to comment on the failure. Jim Strader, Richmond Federal Reserve spokesperson stated:

“A Federal Reserve operational error resulted in disruption of service in several business lines. We are restoring services and are communicating with all Federal Reserve Financial Services customers about the status of operations.”

The Fed in a few hours had restored all but Account Services. During the disruption, neither the dollar nor Bitcoin seemed to react. There was also no major impact on any bank or exchange during the outage.

Federal Reserve Calls for Digital Currency Clarity

On the same day of the outage, the Fed was reigniting interest in issuing a digital currency. The US Federal Reserve Chairman Jerome Powell stated that 2021 would be the year for broad consultation with the public about a potential CBDC. In FED notes outlining some ‘preconditions’ on any potential digital currency, the body noted;

“Engaging with individuals and businesses and consulting with consumer groups, community organizations, and business associations to understand the use case for a CBDC will help in the decision whether to issue a CBDC and its potential design,”

The paper further noted that the senate had a big role to play, with any potential issue of a CBDC having to be on a “legislative authorization.” Features of the digital dollar were also key with interest in privacy, security access and delivery. The notes however failed to report if the digital currency would be blockchain-based or not.

The Feds stance comes just a week after Treasury Secretary Janet Yellen talked about a digital dollar being feasible. She further pointed out that with too many Americans lacking access to payment systems and bank accounts, a CBDC would be ideal.

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Kiguru is a fine writer with a preference for innovation, finance, and the convergence of the two. A firm adherent to the groundbreaking capability of cryptographic forms of money and the blockchain. When not in his office, he is tuned in to Nas, Eminem, and The Beatles.





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