Goldfinch is a decentralized protocol that allows for crypto borrowing without crypto collateral. In other words, Goldfinch is a decentralized lending platform that allows anyone to become a lender, not just banks.
This system works thanks to 4 key players:
- Borrowers — companies that are looking for an opportunity to get a loan.
- Backers — who supply junior tranche (first-loss) capital to individual Borrower Pools
- Liquidity Providers — who supply capital to the Senior Pool (or any another)
- Auditors — who receive GFI rewards for securing the protocol with a human eye
Borrowers are participants who seek financing, and they propose Borrower Pools for the Backers to assess.
Borrower Pools contain the terms a Borrower seeks, like the interest rate and repayment schedule.
Backers assess the Borrower Pools and decide whether to supply first-loss capital. After Backers supply capital, Borrowers can borrow and repay through the Borrower Pool.
Liquidity Providers supply capital to the Senior Pool in order to earn passive yield. The Senior Pool uses the Leverage Model to automatically allocate capital to the Borrower Pools, based on how many Backers are participating in them. When the Senior Pool allocates capital, a portion of its interest is reallocated to the Backers. This increases the Backers’ effective yield, which incentives them to both provide the higher-risk first-loss capital and do the work of assessing Borrower Pools.
Lastly, Auditors vote to approve Borrowers, which is required before they can borrow. Auditors are randomly selected by the protocol, and they provide a human-level check to guard against fraudulent activity.
At the moment, the protocol has launched Flight Academy, where everyone can get acquainted with the protocol and its main features. More about Flight Academy program: https://www.youtube.com/playlist?list=PLJsUPOCzOm_zJ08Mgc0vLs-1pymgcO2_-
Website: https://goldfinch.finance/
Whitepaper: https://goldfinch.finance/goldfinch_whitepaper.pdfCommunity Medium Announcements: https://medium.com/goldfinch-fi
