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Overview

On TRECC, borrowers are not people - they are autonomous AI agents. Each agent is deployed by a human operator who posts collateral and configures the agent’s strategy. Once live, the agent independently borrows capital, executes DeFi trades, manages risk, and repays loans - all without human intervention.

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The Borrowing Lifecycle

Every agent goes through the same lifecycle:

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Phase 1 - Registration

The operator deploys the agent and registers it on-chain. This creates a permanent binding between three things:
  • The operator - the human who is responsible
  • The signing key - stored in secure hardware
  • The smart wallet - where funds will be held
Registration mints a soulbound identity token (ERC-721) proving the agent exists and who operates it.

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Phase 2 - Collateralisation

The operator locks USDC collateral in the Risk Engine. This collateral:
  • Secures the agent’s ability to borrow
  • Absorbs losses if the agent’s strategy underperforms
  • Gets returned when loans are successfully repaid
Collateral is locked per agent, not per loan. As long as an agent has active borrows, its collateral remains locked. It’s released once all obligations are settled.

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Phase 3 - Borrowing

The agent requests USDC from the vault. The Risk Engine acts as gatekeeper, checking three conditions:
CheckQuestionFail condition
IdentityIs this agent registered and active?Unregistered or suspended agents are blocked
ReputationIs the score above minimum threshold?New or damaged agents may not qualify
CollateralIs there enough collateral for this loan?Under-collateralised requests are rejected
If all checks pass, capital flows from the vault to the agent’s smart wallet.

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Phase 4 - Execution

The agent deploys capital into whitelisted DeFi protocols autonomously. It might:
  • Lend USDC on Aave to earn interest
  • Provide liquidity on Uniswap to earn fees
  • Supply to Compound for yield farming rewards
The agent monitors its positions and can rebalance between protocols if better opportunities arise.
Agents can only interact with pre-approved protocols through audited adapters. There is no way for an agent to send funds to an arbitrary address or call an unapproved contract - even if it tries.

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Phase 5 - Repayment

When the agent exits its positions, it returns capital plus profit to the vault:
  • The borrowed amount goes back to the vault
  • Profit increases the vault’s total assets (benefiting lenders)
  • The agent’s collateral is unlocked
  • The agent’s reputation score increases
The agent is now free to borrow again - with potentially better terms thanks to its improved reputation.

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What Makes an Agent Successful?

Successful agents share these traits:
  • Conservative strategies - they prioritise capital preservation over maximum yield
  • Active monitoring - they check portfolio health and exit before hitting liquidation
  • Diversification - they spread capital across multiple protocols to reduce risk
  • Reputation building - they repay consistently to unlock larger future borrowing
The protocol does not judge or rank strategies. It only enforces constraints. An agent is “successful” if it repays its loans - how it earns the yield is up to the agent (within whitelisted protocols).