DeFi Trinity Framework
dTRINITY draws its name and inspiration from Frax’s DeFi Trinity framework, structuring core protocol components around 3 distinct but vertically-integrated functions: stablecoin, liquidity, and credit.
Stablecoin
A non-volatile and fungible unit of account, backed by collateral reserves. It serves as the protocol’s unified medium of exchange, liquidity, and credit.
Liquidity
Trading pairs and DEX liquidity pools for the stablecoin, enabling onchain swaps, price discovery, arbitrage, and opportunities for LPs (liquidity providers).
Credit
Decentralized lending and borrowing markets for the stablecoin, allowing onchain credit formation to take place.
Natural Progression
Reserves collateralize stablecoins → Stablecoins facilitate liquidity and credit → Liquidity and credit accelerate money velocity → Velocity enhances fees and yields → Yields attract new capital and reserves → Repeat ♾️
Horizontal Expansions
The vertically-integrated DeFi Trinity framework can also be expanded horizontally across multiple blockchain networks, enabling chain-native deployments that share a common system design.
“There’ is no difference between currency, liquidity, and lending. They’re all different parts of the same thing.”
~Sam Kazemian, Frax’s Co-founder.