The leading unsecured on-chain lending protocol enters the Ethereum Layer 2, joining its bustling +$600 million ecosystem with low gas fees and high throughput
San Francisco, California, April 2022 — TrustToken, core contributors to the leading unsecured lending protocol TrueFi, announces the protocol’s launch on Optimism, a leading optimistic rollup Layer 2 scaling solution for Ethereum. The launch will grant the TrueFi lender community a faster, cheaper user experience and broaden access to TrueFi to an even wider class of retail lenders while keeping the protocol integrated to the larger Ethereum ecosystem.
Ethereum, with the market cap of its native Ether coin second only to that of Bitcoin, is the leader in the decentralized finance (DeFi) space as it pioneered smart contracts, the decentralized applications powering DeFi services. As popular as the network and its $600 billion ecosystem is among developers, it is not without its tradeoffs. Ethereum’s throughput stands at about 30 transactions per second, and the network is notorious for its high gas fees, which accumulated losses for users on every transaction, often making the cost of using protocols like TrueFi prohibitive to retail users. Optimism is a Layer 2 blockchain that solves Ethereum’s scaling dilemma while maintaining Ethereum’s strong security guarantees.
By launching on Optimism, TrueFi grants its users near-instant transactions and low gas fees, making for even more capital-effective lending and borrowing. The Optimism version of the protocol will feature its own lending portfolios distinct from those on mainnet TrueFi, giving prospective TrueFi borrowers access to an even bigger pool of uncollateralized capital, and lenders new earning opportunities with competitive yields and low transaction fees.
The existing single-borrower portfolios on TrueFi will also have the option of migrating to Optimism upon their maturity date, as well as opening new dedicated lending portfolios on the Layer 2 chain. The first portfolio to launch with TrueFi on Optimism will be the Perpetual protocol-to-protocol lending portfolio, letting lenders provide capital to Perpetual’s market making efforts while taking advantage of the cheaper and faster TrueFi experience on Layer 2.
The launch is expected to amplify the overall user activity on TrueFi as it brings the protocol into Optimism’s own bustling economy, which is currently above $600 million total value locked, with more than 80,000 transactions per day. Users can move their TRU tokens between Optimism and the Ethereum mainnet through the standard bridge, which works as their gateway into the larger Ethereum-based economy.
“Layer 2 chains like Optimism are a powerful force multiplier for Ethereum-native projects like TrueFi,” says Rafael Cosman, CEO of TrustToken. “Launching TrueFi’s capital markets on Optimism will both make the protocol accessible to an even broader global user base, but also plug TrueFi into Optimism’s growing DeFi ecosystem. We’re thrilled to join the Optimism community and welcome new and existing users alike to enjoy the reduced costs and increased speeds of TrueFi on Optimism.”
“As the Ethereum community continues down its path to scalability, TrueFi is an exciting addition to Optimism,” says Ben Jones, Chief Scientist of the Optimism Foundation. “It’s our responsibility to carry forward Ethereum’s values of permissionless innovation into L2. I think TrueFi’s unique approach will contribute to the diversity of lending systems accessible to Optimism users.”
TrustToken is building the blockchain protocol for global lending. TrueFi lets portfolio managers launch uncollateralized lending opportunities on-chain to a global base of lenders and borrowers. Since November 2020, $1.65B of loans have been originated and +$1B repaid, with no defaults using TrueFi.
For interested borrowers or asset managers looking to build financial products on TrueFi, please contact [email protected].
Optimism is a leading open-source Layer 2 scalability solution for the Ethereum network. Backed by top venture capital funds such as Paradigm and a16z for a total valuation of over $1.6 billion, the solution offers users lower gas fees and higher throughput compared to the Ethereum mainnet. With an estimated on-chain value of $600 million, Optimism is the third-largest Ethereum Layer 2 by TVL as per L2Beat.
For more information, visit https://www.optimism.io/
TrueFi launches on Optimism, expanding on-chain credit access for DeFi borrowers was originally published in TrueFi on Medium, where people are continuing the conversation by highlighting and responding to this story.