New Rising Star in the RWA Government Bond Token Market: Analysis of TProtocol V2 Solution

Currently, there are some pain points in the RWA government bond Token products on the market. Although MakerDAO offers high interest rates, its asset allocation is relatively complex. Some pure government bond products, while having a single asset, face issues such as high KYC thresholds and insufficient liquidity. In this situation, the market urgently needs a pure asset, user-friendly government bond Token product. TProtocol V2 was born to address these issues.

TProtocol is essentially a lending product. Taking the Matrixdock pool it initially supports as an example, it allows top-ranking issuers in the RWA track to use the government bond token STBT as collateral to borrow USDC. USDC deposit users then receive rUSDP, which is an interest-earning token similar to aUSDC from a certain lending platform.

A major highlight of this product is the high leverage rate of STBT lending, with an LTV of up to 100.5%. Theoretically, in extreme cases, the utilization rate can reach 99.5%, meaning that almost all the government bond yields can be allocated to rUSDP holders. In the face of such a high utilization rate, TProtocol adopts an over-the-counter trading model with borrowers to handle large withdrawals, allowing borrowers some time to sell government bonds to repay their debts. Small withdrawals can be realized through regular withdrawals or by selling USDP on decentralized exchanges.

Unlike some treasury tokens that are only aimed at qualified investors, TProtocol maximizes the returns of treasury tokens for USDC deposit users through an institutional collateral lending model, allowing ordinary users to enjoy treasury returns as well. This model is different from the institutional credit loans that have frequently encountered issues before, as TProtocol focuses on products that are dedicated to specific purposes. For example, the investment targets of STBT are clearly limited to short-term treasury bonds and treasury reverse repos, with regular asset reports published, while collaborating with a certain oracle platform to provide reserve proof.

Despite the proof mechanism, there is still an overall reliance on trust in the underlying custodians of government bond assets. Therefore, TProtocol has launched independent funding pools for different RWA assets to isolate risks. For example, in the future, if there is cooperation with other platforms, new dedicated funding pools will be established to isolate potential risks.

In other aspects, the design of TProtocol is also relatively radical. Its governance token TPS/esTPS is designed similarly to certain trading platforms, where the longer the storage time, the higher the dividends. In addition, it has designed a dual-layer structure of iUSDP/USDP, similar to the architecture of certain staking tokens, where iUSDP is the auto-accumulating version of rUSDP, while USDP has no earnings and is used to provide liquidity in decentralized exchanges and other venues.

This model enables TProtocol to enhance capital efficiency and increase the yield of iUSDP by incentivizing other protocols, making it possible to exceed the yields of ordinary government bonds, similar to the yield enhancement model of certain staked Tokens.

Currently, the competition in the RWA track is fierce, and a certain DAO has already established an absolute advantage. However, as an over-collateralized stablecoin, the proportion of its underlying assets that can be used to purchase government bonds is limited. If too many users deposit this stablecoin to earn interest, the interest may even fall below the government bond rate.

In summary, TProtocol transmits the pure yield of government bond tokens to ordinary users without KYC through an institutional collateralized RWA asset lending model, and draws on the design patterns of certain staking tokens, giving its yields the opportunity to exceed the basic yield of government bonds. This innovative model brings new possibilities to the RWA government bond token market.