We all love on-chain yield. There’s nothing more satisfying than sleeping comfortably at night while the number of rewards accruing on your self-custodial deposit tick endlessly upwards. But as DeFi matures, we’re learning the hard way to be more wary of the provenance of on-chain yield, and that if you can’t tell where the yield comes from, it’s probably coming from you!
Ultimately, there’s limits to how much yield can exist naturally in a fledgling market like DeFi. To continue offering the kind of outstanding yields that users have become used to, we will need to stretch the boundaries of DeFi’s yield sources beyond their current limitations. To most, it seems obvious that we will need to embrace real world assets on the blockchain.
With that goal in mind, we at Beefy are delighted to announce our partnership with TProtocol, a revolutionary new project aimed at bringing the world’s biggest and best debt assets onto the blockchain. By pushing for these two worlds to collide, TProtocol aims to bring the benefits of decentralization, automation and composability to one of the biggest traditional asset classes in human history.
TProtocol was founded with a mission to reinvent investing in treasury bills (T-Bills). For those who don’t know, T-Bills are debt assets issued by state treasuries and central banks to raise funds for government spending. Viewed by many as one of the safest sources of yield, T-Bills are the backbone of financial markets, and allow actors of all sizes and positions to protect themselves against inflation.
One of the most significant drawbacks of T-Bills is their inflexibility. The vast majority of T-Bills are held by custodians and intermediaries, with limited guarantees or protection against the middle man’s insolvency. The alternative of holding your own T-Bills is incredibly antiquated and inflexible, making it infeasible for the modern world. Surely we can do better…
TProtocol achieves this with its T-Bill tokens ($TBT). $TBT is a permissionless token which represents a share of underlying T-Bills that can be issued and redeemed 1:1 with USDC deposits (less a small fee). The token is "rebasing", meaning interest is paid on the debt each day by adjusting the current balances of holders. TProtocol also issues $wTBT, a wrapped and non-rebasing version which increases in value rather than quantity. Effectively, by supplying capital to TProtocol, users can unlock new yield on those funds from traditional sources, without having to leave the comfort and convenience of the on-chain world.
Sounds cool, huh? Well yeah… but it’s not just cool. This idea has revolutionary potential. Let us explain…
In DeFi today, stablecoins offer users the protection against volatility that’s needed to operate as a business in variable conditions. This has enabled a significant proliferation of on-chain financial activity. However, because stablecoins are pegged to fiat currencies, but not issued by state treasuries, they suffer from all the downsides of government money printing and inflation, but don’t benefit from state debt assets or assurances.
Bringing real-world debt assets onto the blockchain means an immediate and stable expansion of available yield. For instance, T-Bills provide a spread between stablecoin market price and the underlying value of the debt asset. Issuers can profit by selling T-Bills for more than their nominal cost at issue (e.g. $1) but less than their total value after interest (e.g. $1.10 after 1 year). Market participants will then profit from interest by holding the debt asset rather than naked stablecoins.
As all manner of nations and businesses issue debt assets, the prospect of utilizing a global range of assets to deliver strong and varied on-chain yields may also prove to be a significant driver of decentralization both on and off-chain. Giving smaller or less endowed nations quick and efficient access to fundraising or foreign debt assets can help to level the playing field across global debt markets.
To celebrate the arrival of T-Bills on chain, we’re teaming up with TProtocol to deliver some unmissable returns on your $wTBT tokens. 🔥
As part of Beefy’s Boost Week, we’ve been running a limited-time Boost on the wTBT-USDC Vault using funding from our Optimism Governance Fund grant. To get your share of the additional $OP tokens, simply head over to the vault page, zap in in two clicks with any of your favorite tokens, and hit “Boost Vault” to get access.
Though Boost Week is sadly already over, the added Boost on $wTBT has been extended for another week, so there’s still plenty of time to soak up those boosted rewards on your stable assets. This is the perfect opportunity to check out $wTBT, and give TProtocol a try!
In today’s world, where the realms of traditional and decentralized finance coexist largely independently of one another, it can feel as if you need to be a radical pioneer to imagine some union of the two. But by continually expanding the frontier, projects like TProtocol are causing these two worlds to collide into something bigger.
We at Beefy intend to be there every step of the way, bringing users safe and convenient access to the new and emerging digital asset classes, together with the magic of autocompounding. Come with us into this Brave New World…