Staking is the process of transferring TRU to the TrueFi protocol’s staking contract in order to help ensure the safety of lenders in the protocol. In exchange, stakers receive rewards in the form of protocol fees generated by TrueFi and incentive TRU tokens. In the case of a loan defaulting in the TrueFi lending pool, stakers risk losing a portion of their TRU staked.
On the Stake page, click on “Stake TRU”, input the amount of TRU you wish to stake and complete the transaction on the connected wallet. Users staking for the first time would be required to approve TRU spend limit first.
When you stake TRU on the platform you receive stkTRU in return. The stkTRU tokens are tradable and transferable. You can use the stkTRU tokens to participate in TrueFi’s governance and approve or reject individual loan applications.
stkTRU token contract (proxy): 0x23696914Ca9737466D8553a2d619948f548Ee424
Once you stake TRU in the protocol, it is locked into the protocol. You will need to initiate cooldown to unstake your staked TRU. During the cooldown period you cannot unstake or withdraw your staked tokens. Once the cooldown period is over you will have a window of time, called the unstakePeriodDuration in the stkTRU smart contract to unstake or withdraw the staked tokens. If you do not unstake during this window your staked tokens will be staked back into the protocol and you will be required to re-initiate a new cooldown period. If you have recently acquired stkTRU and you wish to withdraw your stake, you will need to initiate cooldown.
During the unstaking window you can visit the Stake page and click on the “Unstake” button present over your Staked TRU amount.
The cooldown period has been added to prevent any kind of gamification which might be possible by staking for a very short period of time. For example, without a cooldown period Stakers could stake on the protocol to earn the protocol fee and then immediately unstake. This might result in some Stakers earning a return which is disproportionate to the amount of risk they are helping mitigate. Staked TRU cannot be unstaked from the protocol during the cooldown period.
For the latest cooldown period and the unstaking window, you can check cooldownTime and unstakePeriodDuration in the stkTRU smart contract. Visit the etherscan link to the smart contract, click on Contract, then click on Read as Proxy. You will find both these parameters cooldownTime and unstakePeriodDuration mentioned in seconds. To change this to days you can use the following formula.
Cool down time in days = cooldownTime / (24 x 60 x 60)
Yes, you can stake more TRU during the cooldown period. Staking more TRU, with the same wallet, during the cooldown period will increase the cooldown period. The cooldown period timer will be reset to the maximum cooldown period if you stake any additional TRU.
Staking TRU on the protocol enables Stakers to earn a portion of the protocol fees generated by the TrueFi protocol. Currently, Stakers earn 100% of the fees generated by the TrueFi protocol. The protocol fees currently consist of 10% of all interest amount generated from loans paid at the end of successful repayment of a loan.
The protocol fees generated by TrueFi from various lending pools is exchanged for USDC, which is then lent to the TrueFi USDC Pool in exchange for tfUSDC tokens. Stakers are rewarded with tfUSDC tokens. The proportion of fees paid to stakers can be changed through protocol governance.
Apart from the protocol fees, TRU stakers also earn an additional return in the form of more TRU as incentive to stake their TRU on the platform.
For the latest TRU distribution per day, you can check the parameters totalAmount and duration in the stkTRU distributor smart contract.
stkTRU distributor smart contract (proxy): 0xecfD4F2C07EABdb7b592308732B59713728A957F
Visit the etherscan link to the smart contract, click on Contract, then click on Read as Proxy. You will find these two parameters among the list of other parameters. The duration is in seconds.
TRU distribution per day = (totalAmount/10^8) / (duration/(24*3600))
TRU stakers are acting as a risk management system for the TrueFi lending pools. In case of a default in the TrueFi lending pool, a certain percentage of the TRU staked will be liquidated and transferred to the TrueFi lending pool. The maximum percentage of TRU that can be liquidated and transferred to the TrueFi lending pool in the event of a default is the “Maximum Liquidation Rate”. Therefore, in the event a loan provided by a TrueFi lending pool defaults, Stakers can lose upto the maximum liquidation rate of their TRU staked.
For example let’s consider a scenario when a loan of principal amount 1,000,000 TUSD defaults, and if the stkTRU contract has 500,000 TRU staked on it. And let’s assume that the maximum liquidation rate is 10%. The maximum amount of TRU that would be liquidated is (500,000 x 10%) 50,000 TRU.
The value of the loan defaulting may be less than the value of the maximum TRU that can be liquidated. In such cases the market value of TRU that would be liquidated will be equal to the loan amount and the rate of TRU liquidation would be less than the maximum liquidation rate.
For the latest maximum liquidation rate you can check the parameter fetchmaxShare in the Liquidator smart contract.
Liquidator smart contract (proxy): 0x76dd4921C99AC6b61b3a98f9fa6f181cA6D70c77
Visit the etherscan link to the smart contract, click on Contract, then click on Read as Proxy. You will find the parameter fetchMaxShare among the list of other parameters.
Max liquidation rate = (fetchMaxShare / 10^2) %
On the Stake page you can regularly check your claimable TRU rewards and tfTUSD tokens. Click on the Claim button and complete the transaction in your wallet.
You would be able to withdraw your staked TRU and claimable TRU rewards after the launch of v2. We will be supporting this functionality in the UI on the Stake page itself.
Information on approving loans can be found in the Loan approval process section of the FAQs.