Teller Finance plans to launch a decentralized non-custodial undercollateralized lending platform with yield farming features. The platform will enable liquidity providers to earn TLR and COMP when they participate as lenders through interest rates. 

Capital investments will be locked for three months and result in rewards vested over the same period of time. Institutional investors are given a $10 million capacity and can only earn 1% of the total TLR supply. Teller already sourced $8 million worth of liquidity in DAI and USDC from institutional investors and DeFi Alliance. 

Regarding TLR, 29 million tokens (29%) have been allocated for public distribution over the first 12 months of operations. Initially, all decisions will be made by the Teller Labs founding team; however, once the platform reaches maturity and wider distribution of the governance token, Teller will shift to a community-based proposal system.

Robert Leshner, the founder and CEO of Compound said:

“The Teller Protocol is resolving an essential problem for DeFi. Namely, lowering the barrier to entry for new DeFi users by pricing out risk, and reducing the industry’s need for collateralized debt positions,” said Robert Leshner, founder and CEO of Compound.

It is difficult to predict how the crypto community will accept this project, primarily because of the unsecured loans and borrowers’ ability to flake on their debt. Looking at Teller’s whitepaper, there’s no mention of legal protections for lenders, making it a significant risk for investors.

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