AMA Highlights – TrustToken
By Daniel Dal Bello, Director.
December 12, 2020 – 10 min read.
On Thursday 10 December, we welcomed Rafael Cosman from TrustToken into the Hillrise Capital Telegram chat for an AMA. Rafael is a cofounder and the current CEO.
You may have heard of TrueUSD, a stablecoin with independently attested and live updated ‘Proof of Reserves’ published on-chain, but that’s not all. TrustToken are working to revolutionize the DeFi industry with their major currency stablecoins through to completely “uncollateralized” lending.
In this post, we have compiled key questions and answers from the event.
Daniel Dal Bello
Welcome Rafael, thanks for joining us today. Looking forward to getting into some of the details behind TrustToken as a whole and some of your DeFi componentry. We really enjoyed exploring the truefi app this week.
We’d love to start with your background and how you came to be leading TrustToken.
Hi Rafael, excited to have you here! It’s always great to see a CEO who is so involved in his own project, I really like your down to earth approach, the video explainers made by you – and of course that you got us to actually try and fully understand your platform and products!
Thanks for having me! I studied CS at Stanford and encountered cryptocurrency and blockchain there. Afterwards I worked for a while at Google doing AI research, then I left to start this company. I knew for a while that I wanted to start a startup, it always seemed like one of the highest impact things to do.
Daniel Dal Bello
What got you onto the path of stablecoins? Curious!
Well to be honest when we started this company it was an estate planning company. We made software to help people create their wills and trusts. Then about a year in, when we were just getting our first users and first revenue, we decided to make a hard pivot.
We saw what was happening in cryptocurrency and thought there must be some big opportunities here. Already at that time we had a unique team given that we had both attorneys and tech people like me on a small startup team. Most startups are purely tech. At the time (2017) there was only Tether, and it was a pretty glaring hole – that nobody had made a trustworthy alternative.
So we moved on it! The rest is history.
But at this point we’re actually shifting our focus away from stablecoins, it will still be a part of what we do, but we’ve launched a DeFi product and associated token and that’s really where we see our future.
Daniel Dal Bello
Let’s talk about the TrustToken ecosystem. You have 2 products at this point in time: TrueFi – uncollateralized lending, and TrueFx an on and off-ramp for crypto-markets. Can you talk us through the product suite?
We’ve also noticed stablecoin baskets being mentioned as a part of TrueFx. Are there any additional ways of utilizing your stablecoins in the works?
Yes, so let me start with TrueFi & TRU. TrueFi is a DeFi protocol for uncollateralized lending. Why we decided to build it is similar to TUSD actually. It looked like a glaring hole. There are multiple protocols focusing on over-collateralized lending, Compound, AAVE, and Maker are the big ones. Each of those three has over $1 billion in assets locked – huge!
But not a single major protocol has focused on uncollateralized [lending]. We think the market is as big or bigger. AAVE has started to make some moves in this direction but it’s still not their core focus, it’s the core focus of TrueFi and so I think we’ve got a good shot at winning it. It’s that simple. All the rest are details and execution.
One good place we may be able to get to in a year or two: $1 billion in outstanding loans at 13% APY = $130mm/year in interest. 10% of interest can be used to buy-and-burn TRU which = $13mm/year TRU burned. Very rough economics of what our lending and token economics could look like.
“Not a single major protocol has focused on uncollateralized. It’s the core focus of TrueFi and so I think we’ve got a good shot at winning it. It’s that simple.”