Binance Academy  What is TrueFi (TRU)
Channel: Binance Academy
Date: 09/11/2022

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TrueFi is DeFi’s first credit protocol for lending, borrowing, and managing capital. Built on Ethereum and Optimism, TrueFi’s capital markets connect investors, borrowers, and capital managers for uncollateralized lending in both crypto-native and real-world financial opportunities.
By bringing asset management on-chain, TrueFi removes the middleman and can offer lenders better yields on loaned capital, as well as a range of financial opportunities usually reserved for the ultra-wealthy.
At the same time, it provides multiple layers of loss protection against defaults, helps portfolio managers tap into global liquidity, and enables more capital-efficient lending for borrowers.

Read on to learn how TrueFi is revamping the multi-trillion dollar global credit market — and putting the future of finance in the hands of its token holders.


Introduction
Today, the value of the global lending market is approaching $8 trillion, yet nearly all of this money continues to use financial infrastructure built in the 1970s. These technologies (such as SWIFT) often make investing slow, expensive, and exclusive.
As a result, the most attractive investing options — like corporate debt, specialty real estate, and emerging market opportunities — are rarely available to retail investors.
Blockchain technology offers a new way to move and allocate capital, making investing more efficient, faster, and more transparent. However, blockchain alone does not address issues such as assessing borrowers’ credit worthiness, onboarding real-world collateral, or collecting on defaulted loans. 
To solve this problem, the TrueFi team has designed a hybrid structure that allows the protocol to operate freely, under the direction of TRU token holders. Additionally, TrueFi relies on adoption from independent portfolio managers who enjoy the benefits of TrueFi’s infrastructure while owning the centralized components of underwriting and collections in the real world.
Here, we’ll dive into how TrueFi has grown into a first-of-its-kind multi-billion dollar protocol.




What is TrueFi?
Using blockchain infrastructure, TrueFi has launched DeFi’s first uncollateralized lending marketplace, finally allowing borrowers to make on-chain loans without requiring them to provide collateral lock-up. 
This has dramatically increased borrowers’ capital efficiency, resulting in soaring demand. Since TrueFi’s first uncollateralized loan in November 2020 to Alameda Research, the protocol has originated almost $2 billion in collateral-free loans, paid out approximately $40 million to lenders, and maintained one of the industry’s best underwriting records.
In 2021, TrueFi progressed from only connecting crypto-native borrowers and DeFi lenders to offering a marketplace of financial opportunities managed by independent portfolio managers, all built on its modern lending infrastructure. 
Today, TrueFi offers a diverse and growing range of financial opportunities, including emerging market investing, fintech financing, real estate investing, and gig worker lending — effectively bringing real-world lending and assets to DeFi.




How does TrueFi work?
TrueFi is a public financial utility, offering infrastructure for lending, borrowing, and managing assets. The true magic of the protocol, however, happens when these user groups come together, using TrueFi as a marketplace to meet their needs.
Because TrueFi is a decentralized protocol, it also relies on stakers of its TRU governance token to provide loss protection to lenders, govern the future of the protocol, and make contributions necessary for TrueFi to succeed.