By Martin Young
The platform behind the TrueFi DeFi lending protocol has raised $12.5 million in a funding round led by Blocktower Capital, Andreessen Horowitz (a16z), and Alameda Research.
The VC firms purchased the protocol’s native tokens, TRU, under lockup according to the announcement. CEO and co-founder, Rafael Cosman,
“This fundraise marks a pivotal moment for us: expanding our executive team, expanding our technical team, and expanding the scope of our protocol.”
TrueFi offers collateral-free loans, powered by the world’s first on-chain credit scores, and produces the TUSD stablecoin. It claims that the company’s “TrueCurrencies” are the world’s first on-chain independently-verified, fully collateralized stablecoins.
The protocol explained that unsecured lending such as lines of credit represents an $11 trillion industry in traditional finance. However, it’s pretty much unheard of in DeFi, as it’s composed almost entirely of over-collateralized loans.
It added that since facilitating DeFi’s first uncollateralized loan in November 2020, the TrueFi protocol has originated over $250 million in such loans and paid out over $2 million to lenders, with no defaults to date.
Cosman explained that scaling the platform will allow DeFi to offer more diversified yields for lenders and even better capital access for creditworthy borrowers. Alameda Research CEO, Sam Bankman-Fried, said:
“We see TrueFi unsecured loans growing far beyond crypto, and we plan to be partners and users at every stage of the protocol’s growth,”
TrueFi’s on-chain credit scores will be beneficial “for lenders to assess where they want to put their capital,” said Blake Richardson, an investor at BlockTower.
In late June, TrueFi announced new integrations with Binance, Chainlink, and SushiSwap, as it embedded further into the DeFi ecosystem.
TrueFi’s native TRU governance and staking token has skyrocketed on the news, doubling in price over the past few hours. TRU has surged 98% over the past 24 hours to hit $0.313 at the time of press.
The token has built on gains of 130% over the past week, but it is still down 50% from its mid-February all-time high of $0.615.
There is a circulating supply of 369 million tokens, giving it a market capitalization of $116 million. The total value locked on the TrueFi platform is $225 million according to DeFiLlama, though it too has fallen from a peak of $300 million in early July.