1. What is dTRINITY?
dTRINITY is a next-generation protocol on Fraxtal that offers discounted stablecoin loans to enhance access to liquidity and leverage for DeFi users. dTRINITY will initially focus on stablecoin yield loopers who want to amplify their strategies with low borrowing costs. Ultimately, our mission is to revolutionize the $30-billion DeFi lending market by delivering superior interest rates that are sustainable and scalable with TVL growth.
2. What is yield looping?
Yield "looping," or leveraging, is a process where a DeFi user repeatedly supplies a yield-bearing asset (e.g., sFRAX) to a lending protocol and borrows stablecoins against it as collateral. The borrowed stablecoins are then used to acquire more of the yield-bearing asset, effectively increasing exposure to it. This strategy can be profitable if the yield generated by the leveraged collateral exceeds the interest rate (borrowing cost) of the stablecoin loans.
3. How does dTRINITY enhance yield looping?
dTRINITY facilitates better yield looping through its decentralized stablecoin (dUSD), decentralized lending protocol (dLEND), and decentralized exchange (dSWAP).
Yield-bearing collaterals can be supplied to dLEND to take out dUSD loans. Borrowing costs for dUSD are subsidized by its float income, enabling users to loop/leverage more efficiently at lower interest rates. The borrowed dUSD can also be swapped for more yield-bearing collaterals through dSWAP. Additionally, dSWAP serves as a collateral liquidation venue for dLEND positions.
4. Where do interest rate subsidies on dTRINITY come from?
Interest rate subsidies (rebates) for dUSD borrowers come from dUSD’s on-chain collateral reserve. Interest (float) income generated by the collateral reserve is shared with dTRINITY periodically to subsidize interest rates for dUSD borrowers on the protocol.
5. What is dUSD backed with?
The collaterals of dUSD consist of stablecoins like FRAX and USDC as well as yield-bearing assets like sDAI and RWA tokens. Every dUSD is fully backed by 1 USD worth of collateral and can be minted/redeemed permissionlessly through smart contracts.
6. Does dTRINITY have strategy vaults for looping?
Yield looping strategy vaults are planned for release within 2024, providing users with a simplified leverage experience and composable receipt tokens that can be utilized in other DeFi protocols (e.g., 3XsFRAX, 5XsDAI).