Over the past year, we've been quietly building something we believe will fundamentally change how DeFi assets work together. While the journey hasn't always been straightforward, our vision has remained constant: unlock the $34+ billion in idle liquidity currently trapped across EVM chains.
Our Liquidity Generation Event was the first step that marked an important milestone in this journey. The response and engagement from our community validated what we've known all along - there's a genuine need for infrastructure that makes existing DeFi assets work harder. As our Single Sided Liquidity program continues to bootstrap liquidity for XY, we're ready for the next chapter in Tren Finance's evolution: our mainnet launch.
A Different Kind of Launch
The DeFi space has grown accustomed to a familiar pattern: protocols launch with massive incentives, attract millions in TVL within days, then struggle to maintain that momentum once the incentives dry up. While rapid growth can be exciting, we believe it often comes at the expense of long-term sustainability.
We're taking a more measured approach with our launch. Instead of chasing immediate TVL growth, we're focused on building a foundation that can support sustainable, long-term growth. This means starting with a carefully selected set of assets, thoroughly testing each component in a production environment, and gradually expanding our offerings based on real user feedback and demand.
This approach might mean slower initial growth, but we believe it's the right way to build a protocol that users can trust with their assets. After all, we're not just building another DeFi protocol - we're creating a protocol that we hope will become a cornerstone of DeFi capital efficiency.
Building in Public
Our journey to mainnet has been one of continuous evolution and discovery. When we started building Tren Finance, we initially set out to create a lending protocol that could handle volatile assets. But as we developed our infrastructure and risk management systems, we discovered something unexpected – we had built a foundation perfect for unlocking the billions of dollars currently sitting idle in DeFi protocols.
This realization led to our first pivot: shifting from a traditional lending market to a CDP model where we could act as the sole lender. This change allowed us to focus on what really mattered – building infrastructure that enhances the entire DeFi ecosystem rather than competing with established players.
The reality we faced was clear: DeFi doesn't need another Aave or Compound competitor. What it needs is infrastructure to make existing assets work harder. With over a third of DeFi's TVL locked in protocols, generating yield but unable to be used productively elsewhere, we saw an opportunity to create something truly innovative.
At launch, we're focusing on three core components that form the foundation of our protocol:
Isolated modules: Our isolated module architecture allows users to deposit collateral and borrow XY in risk-contained environments. Each asset type operates in its own independent market, preventing contagion risk while enabling customized risk parameters for different asset types. This approach allows us to support diverse assets while maintaining system security.
Insurance pool: The Insurance Pool serves as our primary defense against bad debt, allowing users to stake XY and earn rewards while providing a crucial backstop for the protocol. Insurance providers can earn additional yield through liquidations, creating a sustainable economic model that aligns incentives between different stakeholder groups.
Hooks: Our Hooks enables automated strategies through customizable smart contracts, allowing for features like auto-compounding yields, cross-protocol strategy execution, and position management. This system forms the backbone of our vision for making idle assets work harder.
Security First
We've prioritized security at every step of our development process. Our security measures go beyond standard audits, incorporating multiple layers of protection through our isolated module architecture, careful risk parameter calibration, and robust testing frameworks.
We're proud to have worked with some of the most respected names in DeFi security:
Omniscia conducted our first comprehensive audit in October 2024, focusing on our core protocol mechanics and risk management systems
Zokyo performed an in-depth review in November 2024, with particular attention to our single sided liquidity contract required for our liquidity generation event
Halborn completed our final pre-launch audit in January 2025, focusing on our hooks and providing additional validation of our security measures
These audits have not just been a box-ticking exercises – they've helped us refine and strengthen our protocol through multiple iterations. We've implemented every critical and high-severity recommendation, and continue to work on optimizing based on auditor feedback.
Launch Assets
Our initial asset selection reflects our commitment to launching thoughtfully and securely. We've chosen to start with two Curve LP positions that showcase the full potential of our protocol while maintaining conservative risk parameters. These assets demonstrate how Tren's hooks can enhance yield on traditionally "idle" LP positions, allowing users to maintain their existing yield while unlocking additional utility through borrowing. Each asset has been carefully evaluated through our risk framework and configured with parameters that ensure protocol safety while maximizing capital efficiency.
USDC/USDM Curve LP Token
This Curve pool combines the stability of USDC with USDM's yield-generating capabilities. The pool maintains deep liquidity and offers consistent base returns from trading fees (2.02% weekly vAPY). Through our Hook system, when users deposit their LP tokens as collateral on Tren, the hooks automatically stake these tokens into Curve's gauge contract - allowing users to earn both trading fees and USDM gauge rewards (14.8% tAPR) while their LP tokens are being used as collateral. The hooks then automatically compound all these rewards back into the user's collateral position, maximizing their yield without requiring any manual intervention.
Parameter | Value |
|---|---|
TVL | $1.8m |
Max LTV | 85.91% |
Liquidation Threshold | 90.91% |
One-time mint fee | 1% |
Performance fee | 15% |
2BTC-ng Curve LP Token
The 2BTC-ng pool, combining Threshold's tBTC and WBTC, offers users Bitcoin exposure while generating yield through trading fees. With $4 in TVL, this pool represents the growing intersection of native and wrapped Bitcoin in DeFi, providing opportunities for arbitrage and yield generation. When users deposit their LP tokens as collateral on Tren, our hooks automatically stake these tokens into Curve's gauge contract, allowing users to continue earning both trading fees (0.48% weekly vAPY) and CRV rewards (3.48% base tAPR) while maintaining their borrowed position. These rewards are then automatically compounded back into the user's collateral position, enabling users to maximize their returns without any manual intervention.
Parameter | Value |
|---|---|
TVL | $4m |
Max LTV | 75% |
Liquidation Threshold | 80% |
One-time mint fee | 1% |
Performance fee | 15% |
The Road Ahead
Our launch is just the beginning of our journey to unlock DeFi's idle liquidity. Here's what users can expect in the coming months:
Leverage: We're introducing leveraged positions to allow users to amplify their yields through our recursive borrowing engine. This feature will enable users to achieve higher capital efficiency while maintaining careful risk management through our isolated module architecture.
Collateral-Based Loan Repayment: This feature will allow users to repay their loans using their collateral assets, providing greater flexibility in position management and reducing the need to maintain large stablecoin balances for loan repayment.
Once the TREN token launches, we will introduce several key protocol elements:
veTREN: Our vote-escrowed governance token system will allow users to lock TREN for voting rights and enhanced protocol rewards. This mechanism is designed to align long-term incentives between the protocol and its users.
Governance: We're implementing a comprehensive governance system that will give our community direct input into protocol decisions, from risk parameters to new asset listings. This system will be gradually rolled out to ensure stable and secure transition to community governance.
Looking Forward
We're committed to expanding our asset offerings on Arbitrum thoughtfully and systematically. Rather than rushing to list every possible asset, we'll be working closely with our community to identify which assets would provide the most value to our users.
We're particularly excited about potential partnerships with projects whose users could benefit from unlocking the value in their idle positions. These collaborations will be crucial in our mission to make DeFi more capital efficient.
Our mainnet launch marks the beginning of us building in public. We invite you to join us in creating a more efficient, interconnected DeFi ecosystem where every asset can work harder.
Disclaimer: All APY and TVL figures shown are accurate at the time of writing and are subject to change.
About Tren Finance
Tren Finance is the first Liquidity (re)Enabling Protocol that brings capital efficiency to DeFi through composability. We allow users to (re)collateralise their LP tokens, money market deposits, and (re)staked positions, unlocking billions in idle liquidity across the ecosystem. Built by a team of DeFi veterans with experience from leading protocols like MakerDAO, Ajna, Binance and Venom, Tren is paving the way for a more efficient and interconnected DeFi ecosystem.
