Lenders can redeem funds once a vault has reached its maturity date (or depending on the vault's configuration, once liquid funds are available).
When redemptions are available, a lender can redeem LP tokens for underlying tokens by calling withdraw on the token smart contract.
Note that for some vaults, redemptions not be available until the vault's maturity date or may be processed at the manager's discretion.
Please review and confirm details on each vault before lending.
Once a user is ready to lend, the user is required to complete two transactions:
approve : approves the vault smart contract to transfer up to a certain allowance of the asset. (Note: This is a typical interaction on the Ethereum network. Read more about the 'approve' function here).
deposit : lends funds to the vault. In return, the lender receives lending pool tokens ("LP tokens").
Note that for some vaults, lender funds are locked until the pool's maturity date or until sufficient liquid funds are available within the pool. Please review and confirm details on each pool before lending.
Portfolio Managers can configure permissioned pools on TrueFi. Accordingly, some vaults on TrueFi may require identity verification before lenders can gain access.
TrueFi partner Archblock can help institutional lenders onboard and interact with TrueFi.
For more info, visit archblock.com/investors.
Lenders can get access to permissioned pools by clicking on the "Get access" button on the vault's page. This will route the user to verify their identity with an external provider, as defined by the portfolio manager's policy.
In order to be compliant with regulations in certain jurisdictions, Portfolio Managers must verify a user’s identity before and while doing business with them.
This is in an effort to maintain the integrity of the pool. The KYC process is a first line of defense against fraud, sanctions evasion, and terrorist financing. Compliance with global KYC standards helps ensure the pool against reputational risk, regulatory fines, and even cease and desist orders.
Users are required to provide credentials that prove their identity and address. Verification credentials can include ID card verification, face verification, biometric verification, and/or document verification. For proof of address, utility bills and bank statements are examples of acceptable documentation.
This process is important for determining users' risk and whether they can meet the Portfolio Manager’s requirements to use their services. Moreover, it’s also a legal requirement to comply with Anti-Money Laundering (AML) laws in certain jurisdictions.
US regulations specify certain requirements, including licenses, that Portfolio Managers need to meet in order to offer investment opportunities to US persons (citizens or legal residents) and entities.
Failing to comply with such regulations would make Portfolio Managers subject to liability, which would severely impact the pool.
Getting started as a Lender on TrueFi
Transactions on TrueFi infrastructure are transparent and publicly auditable, enabling lenders to track every dollar (or token) lent and borrowed, as well as the status and structure of every loan.
Lending opportunities on TrueFi span multiple sectors and various risk/return profiles.
TrueFi's smart contract infrastructure helps lenders, managers, and borrowers interact transparently and seamlessly.
For lenders, the process is as follows:
Find opportunities via app.truefi.io
Onboard / KYC (if necessary)
Lend funds with instant settlement 24/7
Monitor activity & track returns
Redeem / Withdraw funds when liquidity is available
Portfolio Managers ("PMs") are onboarded through TrueFi governance. You can find posts from PMs and additional information on the TrueFi forum.
For the most up-to-date information on PMs, please see the TrueFi app for a list of active managers and links to their materials.
TrueFi smart contracts support multiple structures for various market participants.
Lines of Credit enable borrowers to source capital directly from lenders.
Asset Vaults support off-chain credit, or "Real World Asset" (RWA), activity.
Credit Vaults support unitranche and multi-tranche onchain credit deals.
TrueFi vaults pay a protocol fee to the TrueFi DAO treasury and an optional fee to the portfolio's manager (if applicable).
Fees are stated on a per annum basis, accrued continuously and paid periodically by each vault's smart contract. Read here for more detail and to see an example.
To find current fee rates, see vaults listed in the TrueFi app.
Yes. TrueFi pools follow ERC-4626 standards.
