Truefi, an uncollateralized loan platform, has raised $12.5 million from three important investors. Blocktower, an investment firm that specializes in cryptocurrency and is based in New York, led the token sale. Other important investors were Alameda Research — owned by Sam Bankman-Fried, founder of FTX — and A16z. Truefi is one of the few uncollateralized defi-based lending protocols in the industry.

Truefi Raises $12.5 Million

Truefi has raised $12.5 million dollars to expand its operations and its offer of lending products. It was funded by the purchase of its native token truefi, which will be released in stages. The token sale was led by New York-based Blocktower, a cryptocurrency blockchain VC firm, with the participation of Alameda and A16z, some of the biggest investment firms in the crypto space.

The protocol was developed through experimentation using a system that mimics traditional finance conditions for defi. Traditional finance does not work like this. Most defi loans require collateral in order to be issued. To issue loans, banks use a credit score. This score is calculated based on the volume and activity of the customer.

Truefi aims to replicate this behavior by allowing users to borrow uncollateralized loans based on certain variables. These variables will determine each user’s credit score in the blockchain. This has already resulted in more than $200 million in loan originations for Trusttoken, the company behind the protocol, which is also the issuer of trueusd, a popular stablecoin.

Expanding Its Reach

The fundraiser allows Truefi the opportunity to expand its reach to new markets and offer new products. Trusttoken CEO Rafael Cosman stated:

This fundraise will enable Truefi’s growth through solid hiring and strategic investments. It will also allow Truefi’s to expand its workforce, which will allow it to offer better capital access to borrowers and lenders.

Alameda Research were among the first to adopt the protocol. They are now helping to spread it to other institutions. San Bankman-Fried is the CEO of the VC investment company.

Alameda feels proud to be an investor in the team and the technology behind it. Truefi’s unsecured loans are growing beyond crypto and we intend to be users and partners at every stage.

What do you think of Truefi’s latest token sale? Please leave your comments below.

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