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Goldfinch Finance Protocol (Crypto Loans) A Comprehensive Guide to

Several crypto projects are aiming to revolutionize the decentralized finance space. One of them is Goldfinch Finance Protocol. The lending platform is making it possible for institutions to borrow and lend cryptocurrencies without the need for traditional financial middlemen.

Moreover, users can obtain loans without providing collateral. In this guide, you will learn all the aspects that separate Goldfinch Protocol from other lending platforms.

What is Goldfinch Finance Crypto Loans Protocol?

Launched by Blake West and Mike Sall in June 2020, Goldfinch is a crypto lending protocol based on Ethereum. Its founders are Coinbase’s ex-employees. According to data from Cruchbase, Goldfinch has raised over $35 million from more than 20 investors, including Coinbase Ventures, Kindred Ventures, and Andreessen Horowitz, among others.


The platform uses smart contracts to automate the lending and borrowing processes, thus eliminating the need for centralized intermediaries. It aims to provide access to its services to multiple businesses across the world.

Now, what separates Goldfinch Finance from other DeFi projects? Well, its one-of-a-kind credit model makes the protocol unique. Goldfinch uses a credit scoring system known as trust through consensus. What this system does is evaluate the creditworthiness of borrowers based on their previous conduct.

For loans that must be collateralized, the Goldfinch protocol allows users to provide not only crypto assets as collateral but also off-chain assets. This is why investors in this project call it “the missing piece” in the DeFi space that will make crypto loans accessible to everyone.

How Does Goldfinch Protocol Work?

Before explaining how this lending platform works, it is important we understand the players involved in the project. They include:

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Investors: These players provide liquidity in the form of stablecoins like USDC to Goldfinch. The protocol then uses the money to offer loans to qualified borrowers. Investors that inject their first-loss capital into the Borrower Pools tend to earn more yields than those investing second-loss capital.

Borrowers: They are players seeking financial services from the Goldfinch protocol. The loan interest they pay is the platform’s revenue, which helps keep it in business. Goldfinch provides borrowers vital information regarding its loans to help them decide whether they suit their financial needs.

Auditors: These participants ensure no fraudulent activity is taking place on the protocol. Goldfinch picks auditors randomly. If they identify suspicious activity, the platform rewards them heavily.

Members: These players sign up for Goldfinch Crypto Loans membership, showing their commitment to supporting the protocol’s long-term goals.

Trust Through Consensus

As mentioned earlier, trust through consensus is Goldfinch’s credit scoring system. Once a borrower qualifies for a loan, the protocol’s liquidity providers send funds to a Borrower Pool. The borrower can then begin withdrawing the stablecoins from the pool, exchanging them for fiat currencies in order to meet their financial needs.

As of August 2023, Goldfinch’s active loan value stands at $101 million. The protocol has been generating an average monthly revenue of $100,000 since the start of the year. Its total revenue is roughly $2.1 million.

Goldfinch’s Two-Token Model

Goldfinch has FIDU and GFI as its native tokens. GFI serves as the protocol’s governance token, allowing holders to vote on various proposals. Additionally, this token can be deposited into what’s called “Member Vault” to receive member rewards for being a contributor to the project’s growth.

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There are more than 110 million GFI tokens in circulation. Here is how Goldfinch Loan allocated the tokens: Early and future teams: 28.5%, early supporters: 21.5%, liquidity providers: 16.1%, treasury: 14.9%, backers: 7.9%, Warber Labs: 4.5%, auditors: 3.2%, borrowers 2.9% and contributors: 0.6%.

On the other hand, FIDU is the token given to liquidity providers when they commit their stablecoins to a certain Borrower Pool. Holders can exchange their FIDU tokens for USDC at any time.


Although many decentralized finance projects tout themselves as revolutionary, only a few stand out, Goldfinch being among them. The protocol’s innovative approach to crypto lending is surely making DeFi services accessible to everyone around the world. Still, before you participate in this project, make sure you do your own research.

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Andrew Richard

Andrew is a news writer for Tokenhell, he enjoys tuning in to the daily crypto markets and writing about the latest updates and happenings.

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