A South Korean public blockchain platform, Bosagora, unveiled the blueprint of ‘T-Fi’ on February 17 with it’s launch slated to be on February 22. Investors will be able to participate in T-Fi lending through T-Fi Labs starting on the 22nd.
'T-Fi’, short for True Finance, is a DeFi financial model which bridges blockchain technology with the traditional economy. It’s a business model that facilitates the use of BOA tokens, Bosagora’s native token, with traditional financial assets such as stocks and real estate to enable stable lucrative returns for the investors and users involved.
T-Fi proposes to remove DeFi’s flaws
Even though Decentralised Finance (DeFi) platforms and applications have been game changing innovations within digital finance, they surely have their limitations. The main limitation being that most of the DeFi platforms and applications currently operate within the Ethereum Ecosystem and thus are far from being universal. Most other DeFi lending models operate using ERC-20 tokens with revenue models which are complicated and difficult to access for retail investors. These factors combined with high gas fees issues in the Ethereum blockchain has entailed that fewer retail investors have been involved in DeFi protocols than whales.
While most DeFi lending protocols focus on lending protocols itself and transaction of ERC tokens, it makes them vulnerable to blind spots in the profit mechanism and bugs in smart contracts as Consensys themselves warn against in their ‘Ethereum Smart Contract Security Best Practices’ Guide. Instead, T-Fi can make investments in various real economic assets like stocks and real estate, this is bound to leave lesser scope for manipulations thus luring universal participation even from market participants who might be averse to crypto assets in their portfolio.
T-Fi’s economic ecosystem explained
The T-Fi economic ecosystem aims to enable participants to generate profits in three main ways. First through rewards for block generation by operating nodes of BOA. Second through fixed interest income generated by lending of staked BOA assets. Third through income dividends for taking part in security token offering (STO) projects that are exclusively partnered with Bosagora.
While the latter two are already well-known existing ways of creating value from DeFi protocols, T-Fi’s unique value proposition to attract market attention could be to generate profits from crypto assets already staked in the traditional economy. Out of the innumerous assets in the traditional finance markets, T-Fi will be initially center-staging the stock markets. They plan to operate their lended assets through FMWay - an investment firm that uses a big data-based stock picking algorithm and posted an average annual return of nearly 40% by using back data testing of over 12 countries' stock markets over a duration of 20 years.
To stay true to DeFi’s decentralisation standards, it is essential that the various transaction details that occur outside of the blockchain are recorded in blocks. To enable this, T-Fi has integrated with the blockchain oracle solution, Chainlink to ensure and reliable prices for calculating returns in the staking pool model as well. Oracles in DeFi are used to interact with data from outside their ecosystem.
According to Bosagora’s roadmap, T-Fi Labs will launch their T-Fi lending products with a 1 year maturity on a first come first serve basis in the first half of the year and start operation of their nodes in the latter half of the year. The roadmap states that the first round in February will have 10 million BOA tokens as it’s market cap and the second round will open in May. Post the development of CoinNet in the first half of 2020, the node operation service will be launched in August. The development of the Trust Contract in collaboration with Chainlink is also scheduled to be completed within this year.
With the DeFi markets showing enormous growth of 591% year to date in Total Value Locked (TVL) in 2021 according to data from defipulse, shows that the DeFi markets are not just a bubble and is poised to change the way digital assets work for retail and institutional investors alike. New innovative products like T-Fi could be the forefront of this change by allowing crypto investors lucrative returns by lending towards traditional financial products like stocks and real estate.