Goldfinch Finance platform

Goldfinch Finance is a decentralized funding platform offering collateral-free crypto loans. Note that the name of the platform literally means a staghorn. This bird resides in Europe.

As we know, for an economy to function properly, it needs credit. Without credit it is not able to work. In the traditional sphere, credit is given after a full assessment of the borrowers’ solvency, income, and assets. In the cryptocurrency economy, until the last moment, the only way to get a loan is a pledge of a cryptoasset. And often the price of the collateral exceeds the price of the loan itself. Clearly, this is highly inefficient. De-Fi lags behind the classic financial market in terms of credit.

But the Goldfinch platform has managed to solve such a problem, allowing you to purchase credit in cryptocurrency without collateral. The Goldfinch Protocol is used for this purpose.

The Goldfinch protocol involves several players interacting with each other.

It is the borrower. This includes any company requesting money to continue to grow its business through the pool from the sponsor. Before the borrower comes into contact with the sponsor, it has to go through an audit.

The auditor, in turn, assesses the borrower to see if he or she is a fraud. Auditors are separate individuals, and each may independently audit borrowers. Auditors change on a regular basis. This is to ensure that auditors do not become dependent on each other. The auditors decide whether or not to let the borrower through to the sponsor through a vote.

Another member of the platform is the sponsor. The sponsor provides funds to the borrower. He also makes contact with the borrower and can do his own due diligence on the borrower. If the borrower has no complaints from the sponsor, the sponsor makes the loan. The loan itself is disbursed in two tranches.

The first tranche comes from the sponsor, it’s “Junior Transh”, after that the next tranche comes from the “Senior Pool” which is provided by the liquidity providers.

Liquidity providers are users for whom passive profit is the most important. They disburse finances to the “Senior Pool” from which, after the decision of the sponsors, they issue a loan to the borrower at a certain percentage.

What is the difference between sponsors and Senior Pool LPs?

Each has its own pool, which is given to the borrower at a ratio of four to one. They each allocate ten percent of the loan’s return to the reserve pool. In turn, the Senior Pool, which is owned by the liquidity providers, contributes an additional 20% fee from the loan income to the Junior Pool, which is owned by the sponsors. This is done because sponsors do extra work in verifying the borrower, and allocate first-loss capital.

The main difference between the platform and other decentralized finance platforms is that it presents loans without classical collateral, as it is now.

We can say that Goldfinch Finance is unique in this respect, as it offers a complete change in the structure of decentralized finance, providing loans without collateral, thereby opening cryptocurrency lending to many users.

Website: https://goldfinch.finance/
Technical paper: https://goldfinch.finance/goldfinch_whitepaper.pdf
Telegram: https://t.me/joinchat/HKTu8GB4-FrbVhUQ
Twitter: https://twitter.com/goldfinch_fi
Youtube: https://www.youtube.com/channel/UCrun7_MCTulBSMz7NUWDMjw
Frequently Asked Questions: https://www.notion.so/goldfinchfinance/Discord-FAQs-79b9c077598f4c928c4b04aff0405a72