Trustless Currency Protocol

Trustless Currency Protocol allows users to borrow Hue, a token advertised as void of censorship or control. Some features of Hue include censorship resistance, community ownership, and the use of mechanisms to distribute protocol ownership. Hue minimizes the parameters that can be updated and limits the time updates can happen on-chain.

The Trustless Currency Protocol lets users lock ETH and borrow the debt token Hue. TCP is generally distributed to users who contribute directly, and any governance power automatically expires one year after launch. There are plans for a Trustless Dao to coordinate Trustless protocols.

TCP has two major purposes. The first is to act as a voting token for the community to adjust parameters prior to the protocol locking, and the second is to serve as collateral of last resort.

• Community Token: TCP is owned by the community and is held by users that have made direct contributions to the protocol's development. To ensure users who own the protocol possess the tools to enhance TCP, the holders are able to vote on changes to contracts within the first six months and parameters in the first year. The amount of TCP tokens a user holds determines the voting power.
• Collateral of last resort: TCP holders serve as the collateral of last resort in return for owning a piece of the protocol. TCP is diluted whenever the protocol, in general, becomes undercollateralized to buy Hue to pay off any excess debt. To let interest on borrows accrue to TCP and for the token to be sold for Hue, the protocol runs auctions as required.

Any address holding about 0.25 percent of the circulating supply of the token can propose a contract upgrade within the first six months or a parameter change within the first year. Any address holding TCP has the ability to vote with the balance of TCP held the block prior to the introduction of the proposal, which blocks a user from flash loaning TCP to vote. The voting lasts three days. Proposals are considered successful if more than 2.5 percent of the TCP supply votes affirmative on the proposal, and there are more affirming votes than negatives. After successful proposals, the supply is increased by 0.5 percent.

The tokens can be claimed by users whose votes are proportional to how much weight their votes had. The TCP is therefore owned by users contributing to its success, and those who do not contribute can expect their proportional ownership to dissolve. Successful proposals are entered right into the timelock, creating a two-day delay until proposal execution. Users can see the impending change and decide whether to be involved in the updated protocol.

Trustless: The future of defi on zkSync

The Trustless Currency Protocol lets users develop positions, stake, and offer liquidity. The major use for TCP is to deposit ETH collateral to mint the Hue stablecoin. DeFi lending is anonymous, and the protocol sustains stability by ensuring that borrowers back loans with value. When a position becomes under-collateralized, meaning the value of locked ETH collateral is below the required threshold, it may be liquidated.

TCP is given to position holders gradually. It governs the Trustless Currency Protocol. Staking lets users remove their Hue from circulation to earn interest. They can withdraw the Hue when necessary and earn interest. Liquidity can be provided by depositing a pair of tokens into a liquidity pool. Though TCP will launch with a single ETH:Hue liquidity pool, others are likely to be included by TCP governance. The protocol gives TCP to users who offer liquidity.

In the Trustless Currency Protocol or TCP, users are able to lock ETH collateral and then borrow Hue debt. TCP also makes every position a transferable non-fungible token (NFT). Users are able to transfer their debt position between accounts they possess. Users could also put up their position for sale and offer it in an NFT marketplace. A user can also develop a new financial product that packages different debt positions into another financial product.