[TFIP-35] TrueFi Budget Proposal - Q1 2026

Dear TrueFi Community,

Over the past year, the Foundation has focused on stabilizing the TrueFi ecosystem, resolving legacy issues, and rebuilding the operational base inherited from the prior handover. When the protocol transitioned from Archblock, several technical and administrative components were incomplete or outdated. This included aging multisig structures, unavailable signers, unclear ownership of wallets, and a dependency on vendors who were no longer actively involved. These challenges slowed development and forced the team to spend time on cleanup rather than forward progress.

Despite these constraints, the Foundation has made meaningful progress. We have reduced total operating expenses by more than fifty percent, streamlined internal systems, completed a full reskin of the TrueFi front end, and implemented the Keyring KYC system that allows accredited lenders to access on-chain credit markets. For context, the Foundation’s average monthly spend in 2024, driven largely by external service providers, was over $400,000. In 2025, we reduced that figure to approximately $150,000, even after accounting for one-time legal expenses and the development of stablecoin intellectual property. This marks a decisive shift toward a leaner, more sustainable operating model. Most importantly, we have finished the internal restructuring required to move from a repair cycle into a growth cycle.

We are now ready to activate the products the ecosystem has built and begin generating visible traction. This budget proposal is designed to support the first phase of that growth. It focuses on measured, revenue positive deployment of capital across our three active product lines. Each initiative is designed to create productive, compounding capital for the protocol rather than discretionary spend or burn.

Current Status & Budget Performance Following the approval of the previous budget proposal (TFIP-28), TrueFi DAO successfully funded six months of core operational activity throughout Q3 and Q4 2025. This included governance, strategic operations, product development, legal alignment, and community engagement.

All spending during this period has been transparently tracked and reported on a quarterly basis. The most recent updates, including departmental KPI summaries and expense breakdowns, are available to the public via the DAO’s Notion dashboard.

Despite market volatility, our contributors remained fiscally disciplined, navigating budget execution with efficiency. We prioritized critical milestones—such as onboarding new technical talent, completing the UI/UX reskin, transitioning IT infrastructure in-house, and progressing with Elara’s spin-out—while preserving capital for strategic flexibility.

As we approach the end of Q4 2025, and taking into account all forecasted expenditures for the remainder of the year, we anticipate the following treasury balance:

USDT Reserve: 49,680 USDT This remaining reserve reflects the careful management of DAO funds over the last six months and leaves us well-positioned to continue core operations into Q1 2026, pending approval of this proposal.

Budget Request for Q1 2026 Total requested budget: $489,850

1. This proposal requests three months of operating expenses to support core functions such as governance, operational costs, and community initiatives. The budget accounts for the necessary funding to maintain operational stability and strategic development, with an estimated total of $489,850 for the upcoming 3 months.

2. The proposed budget will take a ~30% earmark in TRU’s token price at the execution of the proposal before being swapped into stablecoins. This is to account for price fluctuations before the TRU-to-USDC/USDT conversion.

3. Any excess funds will be reported to the DAO at the end of the three months.

This figure includes ongoing operational costs as well as necessary back payments and strategic hires as detailed below. The budget structure remains consistent with previous frameworks to preserve clarity and predictability.

1. Cyan (NFT Lending Platform) Budget: $25,000 (Investment vehicle) Cyan is live today and already generating revenue. The product is strongly positioned within the NFT financing vertical and has seen organic usage with no external spend. The next step is to elevate Cyan’s visibility. We plan to run a targeted marketing campaign in partnership with key NFT communities, focused on driving borrow and lend activity with positive unit economics. For example, a user who finances a Pudgy Penguin through Cyan may receive a small amount of PENGU tokens only after initiating a loan. In all cases, the protocol earns revenue first and distributes incentives second. This ensures the marketing spend is net positive and directly tied to Cyan adoption.

2. TrueFi Credit Vaults Budget: $100,000 (Investment vehicle) The TrueFi reskin and Keyring KYC integration are complete. This positions us to relaunch institutional lending activity on the platform. To rebuild trust with external lenders, the Foundation proposes to deposit a modest amount of capital into select vaults and co-lend alongside institutional borrowers. This creates alignment, increases confidence in loan execution, and accelerates the return of lending volume. The yield earned flows back to the Foundation, making this a productive capital allocation rather than a cost.

3. Elara CDP (Capital Efficient Yield Product) Budget: $25,000 (Investment vehicle) The original Elara concept was a compliant Treasury-backed stablecoin. While the product was built and the IP remains fully owned by the DAO, the broader market environment made this design impractical without significant venture funding. Multiple projects in the same category faced similar challenges. Given this reality, we have pivoted Elara to a CDP model that supports capital-efficient sUSDe looping. This variant is much more aligned with current market demand and can generate meaningful returns with a modest liquidity base. The CDP architecture is nearly complete. To support launch and testing, the Foundation requests a budget allocation that allows us to seed initial liquidity. This is not marketing spend or discretionary spend. It is productive capital that generates yield and contributes to the beginning of a permanent capital base for TrueFi owned liquidity.

4. Legal Budget: $7,500

5. Finance, Treasury and Operations Budget: $40,000 Includes: CFO (x1): $40,000

6. Strategy & Operations Budget: $49,000 Includes: Board Members (x4): $24,000 Head of Strategy (x1): $25,000

7. Research & Analysis Budget: $37,500 Includes: Head of Research (x1): $37,500

8. Product & Development Budget: $156,250 Includes: Head of Product (x1): $37,500 Full-Stack Engineers (x2): $100,000 Developer (x1): $18,750

9. IT Infrastructure Budget: $15,000

10. Marketing & Community Budget: $34,600 Includes: Marketer (x1): $25,000 Community Moderator (x1): $9,600

Summary Budget Table

Cyan Investment $25,000 TrueFi Credit Vaults $100,000 Elara CDP $25,000 Legal $7,500 Finance & Operations $40,000 Strategy & Operations $49,000 Research & Analysis $37,500 Product & Development $156,250 IT Infrastructure $15,000 Marketing & Community $34,600 Total $489,850

Operational Budget in USD: Position/Item Annual Q1 2026 Head of Product (x1) $150,000 $37,500 Head of Research (x1) $150,000 $37,500 Head of Strategy (x1) $100,000 $25,000 Full Stack Engineers (x2) $400,000 $100,000 Developers (x1) $150,000 $18,750 IT Infrastructure $45,000 $15,000 Marketer (x1) $100,000 $25,000 Directors Fees (x5) $96,000 $24,000 Community Moderator (x1) $38,400 $9,600 Legal and Compliance - $7,500 Finance & Operations $160,000 $40,000 Total Expenses $339,850

Proposal Summary Projected Operational Cost $489,850 Reallocation from the TFIP-28 -$49,680 Budget Funding request $440,170 ~30% earmark $132,051 Total Funding request $572,221 TRU price $0,014 TRU minting request ~40,872,928 TRU

Goals Enabled by TFIP-35 This budget proposal is designed to support a clear transition. The past year has been about stabilizing the protocol, cleaning up inherited systems, and finishing the work needed to unlock TrueFi’s product suite. The next phase is about growth, proof points, and showing the community that TrueFi is back in motion.

Each component of the proposed budget directly supports revenue generation. Cyan incentives are deployed only after revenue is earned. TrueFi co-lending is productive capital that yields returns. Elara liquidity is the foundation for a CDP product that has strong demand and favorable economics. None of these expenditures leave the ecosystem. They are investments into assets the DAO owns and controls.

Our goal is to demonstrate clear progress from Q4 through April of next year. By that point, we expect to show measurable traction across Cyan, TrueFi, and Elara, supported by a lean operational base and real on-chain activity. At that stage, the community can decide whether to expand the growth plan further. For now, we believe these targeted and disciplined allocations are the right scale for a sustainable restart.

We appreciate the continued support of the community and look forward to delivering results.

Next Governance Steps As the proposals does not fall under the simplified governance exemptions, the proposal will require the following steps:

1. Snapshot Vote: A 48-hour Snapshot vote will be conducted with the options: “OK to vote on Tally,” “Not OK to vote on Tally,” and “Abstain.” At least 5% of staked TRU must participate in this Snapshot vote to meet the quorum.

2. Amendment Period: If the 5% quorum is met, with a majority negative vote, a 72-hour period will follow to allow for any amendments or discussions before the proposal is posted to Tally.

3. Tally Vote: Otherwise, the proposal will be posted to Tally for the final vote.