DTRINITY Launches Subsidized Stablecoin Lending Protocol on Fraxtal L2

admin6 hours ago

Singapore, Singapore, December 18, 2024, Chainwire

dTRINITY, the next-generation stablecoin liquidity protocol, announced its mainnet debut on the Fraxtal L2 Network. The platform is designed to address the key challenge of the rising cost of credit in DeFi by lowering interest costs and improving returns for stablecoin users.

At the core of dTRINITY is a protocol-based stablecoin (dUSD) that acts as an integrated liquidity layer between money markets (dLEND, Aave v3 fork) and external liquidity pools (e.g. Curve). dUSD is backed 1:1 by on-chain collateral reserves comprised of stablecoins such as USDC, FRAX, DAI, etc. and yield coins such as sFRAX, sDAI. The exogenous rate of return on the reserve is redirected to fund dLEND’s ongoing interest rebates to dUSD borrowers based on outstanding debt, reducing effective borrowing costs. This mechanism not only stimulates borrowing demand but also improves sustainable utilization and yields for dUSD lenders.

dTRINITY launched Fraxtal into the Genesis Network through a strategic collaboration with Frax to optimize ecosystem liquidity and user incentives. Fraxtal is a roll-up equivalent of EVM with a scalable smart contract platform and efficient execution environment based on the OP stack. Users can leverage Fraxtal’s fast transaction speeds, low gas fees, strong network security, and unique block space rewards to further enhance the benefits.

In the near future, dTRINITY plans to expand to Ethereum and other emerging blockchains, enhancing cross-chain liquidity and interoperability with Fraxtal as the network scales.

Key features of dTRINITY:

Subsidized interest rate model: dTRINITY’s innovative subsidized interest rate model lowers the balance of stablecoin borrowing costs for dLEND and other protocols without affecting lending yields. In fact, rebates at low utilization may result in negative interest rates for dUSD borrowers (i.e., borrowers may receive their loans).
Liquidity incentives: dUSD lenders and liquidity providers benefit from a combination of protocol rewards and external incentives from strategic partners (both points and tokens) to supply and strengthen liquidity in the ecosystem.
Security and Risk Management: dTRINITY has successfully completed smart contract audits with three major blockchain security companies: Halborn, Verichains, and Cyberscope. Additionally, the protocol disables re-collateralization of provided collateral by default to minimize risk exposure. dUSD is the only borrowable asset on dLEND and cannot be borrowed on its own.
Strategic Partnerships: In addition to Frax, dTRINITY also plans to collaborate symbiotically with other major DeFi protocols. First, dUSD can be expanded to other lending platforms (e.g. Fraxlend, Morpho) to offer similar subsidy benefits to their users. Second, dUSD can serve as a cheaper leverage medium for loopers using other stablecoins/yield coins (e.g. Ethena, crvUSD), increasing demand for both projects. Additionally, the composition of dUSD reserves will diversify over time, opening up potential partnership opportunities with more stablecoin/yieldcoin projects.

Key contributors to dTRINITY include the co-founders of Stabilly. The project has been in development since Q2 2024 and took first place in the ETHVietnam and Fraxtal Hackathons earlier this year. Strategically, dTRINITY brings a wealth of expertise from leading stablecoin and DeFi pioneers to its protocol development, with input from the co-founders of Frax, Convex, Sky (formerly MakerDAO), Coin98, and Promontory Partners.

For more information, visit dtrinity.org and follow @dTRINITY_DeFi on X.

disclaimer: dTRINITY is not available to residents of Belarus, Canada, Cuba, Haiti, Iran, Myanmar, North Korea, Russia (including Crimea), Somalia, South Sudan, Syria, United States, United Kingdom, Venezuela and other prohibited jurisdictions. The information contained herein should not be considered legal, business, financial or tax advice. Past performance is not indicative of future results. Digital assets and DeFi protocols carry significant risks, including the potential for loss of funds. Users should conduct their own research and seek professional advice before interacting with digital assets and DeFi protocols.

Introduction to Trinity

dTRINITY is the world’s first subsidized lending protocol, designed to reduce lending costs in DeFi and improve returns for stablecoin users. The protocol is powered by dUSD, a decentralized stablecoin backed 1:1 by on-chain Yieldcoin reserves. The exogenous rate of return on the reserves is used to fund ongoing interest rebates to dUSD borrowers, lowering the effective borrowing rate. dTRINITY is currently running on Fraxtal L2 and will expand to Ethereum and other networks in the future.