Flaw season is on – TrueFi is a platform called lending hosted on the blockchain Ethereum. This proposes to connect savers and borrowers in an open market. However, TrueFi is not immune to payment defaults. Indeed, the company has just issued its first notice of default.
Blockwater Technologies: a deadbeat at TrueFi
As we just discussed, TrueFi is a platform of lending deployed on Ethereum.
This allows its users to deposit funds in exchange for a return. At the same time, borrowers can borrow the deposited funds. To do this, they must pay loan fees that will pay the return to savers.
However, in some cases, the platform faces bad payers. Sure enough, on October 6th TrueFi released a fault notice against the company Blockwater Technologies.
In a publication dated October 9, TrueFi explains that Blockwater Technologies has missed the payment of one of its deadlines concerning its loan of 3.4 million BUSD contracted on TrueFi.
Reportedly, Blockwater missed its deadline following major solvency problems. Additionally, TrueFi is considering initiating a court-supervised administrative process to resolve the case.
“TrueFi’s credit group conducted an extensive out-of-court settlement with Blockwater executives, including a loan modification to increase the borrowing rate and extend the term, but ultimately concluded that administrative proceedings court-supervised potential would lead to a better outcome for stakeholders given the complexity of sudden insolvency. »
Statement of TrueFi
In total, of the $3.4 million borrowed by Blockwater:
- 645 405 dollars have already been reimbursed through past due dates;
- 2 967 458 dollars stay at to reimburse.
A sum certainly significant, but which does not seem to impact the proper functioning of the protocol, as explained in the publication:
“Blockwater’s default does not affect lenders in TrueFi’s USDC, TUSD, USDT stablecoin lending pools or any of TrueFi’s marketplaces portfolios. »
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TrueFi: a business that works despite winds and tides
While this flaw is significant, it doesn’t seem to affect TrueFi’s business. Indeed, this loan represents only 2 % of the entire $140 million that was lent by TrueFi.
“TrueFi’s credit group believes that the loan portfolio remains in a good position and has actively sought to renew loans given the continued demand from borrowers and support from major lenders. »
Statement of TrueFi
Moreover, savers do not have to worry about this defect. Indeed, the protocol includes a protection fund called « TrueFi RANGE ». TrueFi SAFU is a fund dedicated to supporting users affected by defects.
Note, however, that the situation could take a completely different turn in the event of a default by another borrower.
Faced with market declines, many protocols are under the threat of waves of liquidations. For example, the protocol MakerDAO has many loans close to liquidation which could lead to waves of liquidations.
Full of promise, DeFi is in its infancy and still commits some resounding missteps. There are no 36 ways to protect your cryptocurrencies! Keep them safe on a Ledger wallet. Free shipping (commercial link).