TrueFi Docs
  • What is TrueFi?
  • 🔎User Guide
    • Lend
      • How to lend
      • How to withdraw
      • Onboarding / KYC (for permissioned pools)
    • Borrow
      • Receiving a loan
      • Repaying a loan
    • Manage
      • Onboarding for managers
      • Creating a vault
      • Disbursing loans
      • Managing KYC/KYB requirements
  • âš¡TrueFi Protocol
    • Lines of Credit
      • Line of Credit tutorial
      • Lines of Credit technical details
    • Asset Vaults
      • Asset Vault tutorial
      • Asset Vault technical details
    • Credit Vaults
      • Credit Vault tutorial
      • Credit Vault technical details
        • Credit Vault contract overview
        • Waterfall details
    • Index Vaults
      • Index Vault tutorial
      • Index Vault technical details
    • TRU token
      • Staked TRU
      • How to Get TRU
    • Other concepts
      • Controllers
      • Instruments
        • FixedInterestOnlyLoan
        • BulletLoans
      • [Legacy] DAO pools
        • delt.ai loan: Jan 2023 airdrop claiming instructions
        • delt.ai loan: July 2023 airdrop claiming instructions
        • delt.ai loan: October 2023 airdrop claiming instructions
        • delt.ai loan: Jan 2024 airdrop claiming instructions
        • delt.ai loan: Apr 2024 airdrop claiming instructions
        • delt.ai loan: Nov 2024 airdrop claiming instructions
        • Loan approval process
        • Lender FAQs
          • Lending to DAO pools
          • Farming TRU rewards
          • Withdrawing funds
          • How lending pool (LP) tokens work
          • How loan tokens work
          • SAFU (Secure Asset Fund for Users)
          • Risk Mitigation
        • Developer docs
      • Other legacy contracts
        • Managed Portfolio [legacy]
        • Flexible Portfolios [legacy]
          • Flexible Portfolio contracts
    • Audits
Powered by GitBook

General

  • TrueFi app
  • Docs

Governance

  • Tally
  • Snapshot

Community

  • Forum
  • Twitter
On this page
  • What are Lending Pool tokens ("LP tokens")?
  • How do I calculate LP token prices?
  • Are LP tokens tradable on secondary markets?
  • Why is there a difference between calculated LP token price and its price on Uniswap?

Was this helpful?

Export as PDF
  1. TrueFi Protocol
  2. Other concepts
  3. [Legacy] DAO pools
  4. Lender FAQs

How lending pool (LP) tokens work

PreviousWithdrawing fundsNextHow loan tokens work

Last updated 11 months ago

Was this helpful?

After , a lender receives lending pool tokens ("LP tokens"). Read further to find how users can track the value of their LP tokens and trade LP tokens.

What are Lending Pool tokens ("LP tokens")?

Lending Pool tokens (or "LP tokens") are tradable ERC-20 tokens that represent a lender’s proportional representation in the pool.

In the beginning, when no loans have been disbursed by the TrueFi lending pool, lenders will receive one TrueFi Lending Pool Token (tfTUSD, tfUSDC, tfUSDT, or tfBUSD) for every stablecoin lent to the pool.

As the pool starts earning yields and disbursing loans, the value of the pool tokens may increase or decrease depending on returns within the pool. The value of the pool represents the present value of all its underlying tokens (stablecoins, loan tokens, and other tokens earned).

How do I calculate LP token prices?

We can calculate LP token price by checking the poolValue() and totalSupply() read functions on the lending pool smart contract:

LP token price = poolValue() / totalSupply()

We can use this LP token price to find how many LP tokens a lender will receive in return for lending tokens to the pool.

Example:

Bob lends 2,000,000 USDC to the tfUSDC pool.

Given that tfUSDC = 46226887530770 and

42405680290948 at the time of lending, we calculate tfUSDC LP price = 1.0901.

Bob will thus receive 2,000,000 / 1.0901 = 1,834,675.99 tfUSDC LP tokens

Additionally, we can calculate the value of a lender's position at any point in time:

Lender's position value = (# of LP tokens held) * (LP token price)

Are LP tokens tradable on secondary markets?

Yes, LP tokens can be traded on secondary markets. There are existing markets on Uniswap v3 today.

Why is there a difference between calculated LP token price and its price on Uniswap?

LP token prices calculated by the lending pool assume that loans will be repaid successfully within the term, among other assumptions.

Other market participants may have use different assumptions in their calculation of LP token prices. There are several market factors that may govern the price of lending pool tokens and the TrueFi platform does not have any control over them.

tfUSDC/USDC:

tfUSDT/USDT:

âš¡
lending to the pool
poolValue()
totalSupply()
https://info.uniswap.org/#/pools/0xd7c13ee6699833b6641d3c5a4d842a4548030a82
https://info.uniswap.org/#/pools/0x5cc644472ed7d3198eeb23353bd9236ca578a895