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Decentralized finance (DeFi) facilitates various types of financial transactions and applications on blockchains. DeFi projects have disrupted the traditional banking and lending worlds, and have increased in popularity considerably in recent years. Initially, those conducting financial activities on blockchain had to put up collateral in order to borrow assets. Now, however, uncollateralized lending is available, which enhances the utility of DeFi in the real world.
Traditional lending practices have relied heavily on borrowers’ credit scores, which establish the borrower’s creditworthiness and the lender’s risk of lending. TrueFi offers collateral-free lending with competitive returns for its contributing lenders, and it uniquely stands apart from other lending platforms in the DeFi space with its own credit rating system, the first one on-chain.
DeFi users who contribute their assets to borrowers benefit from full transparency of the borrowers’ credit scores, as well as their rate of return. The loans are completed instantaneously, and TrueFi borrowers benefit from low interest rates. The TrueFi project uses its native token, TRU, to complete collateral-free lending activities. TRU holders can also stake their tokens to receive a return on investment (ROI) of more than 27%. In addition, TRU holders benefit from participation in platform governance activities.