Goldfinch Protocol (GFI)

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Goldfinch is a decentralized credit platform that broadens the pool of potential lenders beyond just banks,” Simpson of Goldfinch investor a16z posted.



Audits & Exploits

"As per the SLOC, there is 329% testing to code (TtC). This protocol does not detail code coverage testing. There is nonetheless evidence of robust testing undertaken on this protocol. Multiple test reports are documented in their Monorepository's CLI. This protocol has not undergone formal verification. This protocol has undergone multiple audits, though it is unclear when the protocol launched. While the token launch is documented, the lending borrowing aspect is of an undocumented time origin. It is that each iteration is being audited nonetheless with V1, V2 and V2.2s all receiving separate audits."

  • Previously scored 50%. With the comment:

"Goldfinch falls short of a podium place when it comes to process quality. This little bird has achieved a lot but it's clear that more is needed before it is ready to leave momma bird's nest. At 59%, Goldfinch is only 11% short of a passing grade that merits this departure.

On the surface, Goldfinch has an attractive bug bounty program that will go some way to make the code golden. A pre-deployment audit really polished Goldfinch's shine, and both factors show the protocol’s dedication to delivering safe code to its users.

Nevertheless, below the surface there is insufficient information relating to the DAO and team’s upgrade permissions of the Goldfinch smart contracts. Unclear information regarding the  software enforcement of the voting periods that act as a timelock is also present.

In addition, their testing requires a little more organisation and development. Their Trail of Bits audit identified that Goldfinch needs to further expand their testing suite with additions like code coverage and CI, and we concur with this statement. We would also like to point out that this audit also mentions insufficient software architecture documentation. Indeed, we found minimal details regarding the breakdown of Goldfinch’s smart contract functions apart from a surface-level interactions diagram."



Admin Keys

"Goldfinch's contracts are clearly identified in this location. Each contract that is either upgradeable or fixed is well explained for users to identify. Goldfinch's smart contract ownership is adequately detailed as being a 6-of-10 MultiSig. Change capabilities are clearly identified in each contract's software function documentation. This could be explained in plainer language, but the information is all present. The ability for the DAO to pause smart contracts is detailed. In addition, there is a good pausability section in their documentation that details which circumstances it should be triggered under. There is no mention on tests. Goldfinch does not use a timelock, and this is explained in their documentation. This is justified on the grounds that their multisig is sufficiently stringent."

  • From their blog (11-1-2022):

"The Goldfinch Council is a 6-of-10 multisig with 10 members who represent all stakeholders of the protocol."


"The protocol is now governed by the community via the Goldfinch Council and the community can actively participate in governance at"

DAO Decisions

From a commissioned Messari report (3-2-2023):

"The community has steadily increased its participation in the protocol by proposing almost 40 Governance Improvement Proposals (GIP) and at the end of Q4 had over 142 unique wallets voting on a single GIP . Governance uses quadratic voting (QV) by weighing votes and taking the square root of the amount of GFI used, QV helps level the field for smaller participants. Additionally, QV uses Unique Identity (UID) as a way to prevent Sybil attacks.

Through governance, the community voted to implement several key Goldfinch Improvement Proposals (GIP), in addition to important proposal discussions.

  1. GIP-10 removed the 12-month linear vesting requirement for Liquidity Providers. This immediately unlocked liquidity rewards which are denominated in Goldfinch (GFI).
  2. GIP-14 introduces credit memos, which are expected to go live in Q1 2023. The pilot will help synthesize the data available to the community to evaluate borrower pools, further the decentralization of the protocol, and strengthen the engagement of the Goldfinch community by compensating members for their contributions.
  3. GIP-26 allows the Goldfinch reserve to purchase FIDU from the Curve pool using USDC when FIDU is at a discount (e.g., threshold currently at 15% discount). However, the recent strain on available liquidity invoked an amendment to the strategy with GIP-34 which has since been passed.
  4. GIP-39 significantly enhances Goldfinch’s ability to manage credit and operational risk to the protocol via adopting common recognizable structural features such as amortization."




Token Allocation

  • From their blog (11-1-2022):

"Tokens have been allocated to over 13K participants in the protocol, including retroactive distributions for Liquidity Providers in the Senior Pool and Flight Academy participants.

The allocations of GFI should reflect the value of contributors thus far while incentivizing all participants in the community to help grow the protocol. The initial allocation of the total supply of GFI are as follows:

  1. Liquidity Providers (16.2%)
  2. Backers (8.0%)
  3. Auditors (3.0%)
  4. Borrowers (3.0%)
  5. Community Treasury (14.8%)
  6. Early and Future Team (28.4%)
  7. Warbler Labs (4.4%)
  8. Early Supporters (21.6%)

There is currently no inflation, but we expect it will be beneficial for the protocol to incorporate modest inflation after 3 years in order to incentivize future active participants. Ultimately this will be up to the community to discuss and decide."


"Goldfinch Membership launched in H2 to further align user incentives with the long-term success of the protocol. In order to become members, users put GFI and their receipt of capital supply (FIDU or a Backer NFT) into a Membership Vault. In turn, members receive USDC yield enhancements and access to exclusive communication channels."

  • From their blog (11-1-2022):
  1. "Community Governance: GFI holders participate in governance to decide on the direction of the protocol. This is now live at Community votes will guide the decisions of the Goldfinch Council, described in more detail below.
  2. Backer Staking: Backers can stake their GFI tokens on particular Backers in order to signal consensus ahead of time when those Backers participate in borrower pools. This GFI also serves as a backstop against potential loan defaults.
  3. Auditor Votes: Auditor votes are required to grant Borrowers permission to borrow from the protocol. Borrowers pay for these votes with the GFI token.
  4. Auditor Staking: Auditors stake the GFI token in order to be selected to participate in Auditor Votes.
  5. Participant Incentives: All participants receive ongoing distributions to incentivize their participation. This includes Liquidity Providers who supply to the Senior Pool, Backers who both supply to Borrower Pools and stake on other Backers, Auditors who stake to participate in votes, and Borrowers who successfully repay their pools.
  6. Community Grants: The community can decide to provide grants to participants that meaningfully contribute to the Goldfinch protocol and ecosystem."

Other Details


Coin Distribution


"At an astonishing 3458 commits, this repository is one of the most well maintained testaments to developer history we've ever seen - it is truly golden."

How it works

"The protocol's business model is to originate loans using collateralized real-world assets (RWA), insulating them from crypto volatility. The participants in Goldfinch include Liquidity Providers (LPs), Backers, and Borrowers. The lending pool either aggregates USDC deposited by LPs and Backers in two tranches (senior/junior) or more recently has created pools that are “unitranche” and are only Backers. LPs represent a second-loss reserve depositing into a Senior Pool (Sr. tranche), whereas Backers represent a first-loss reserve (Jr. tranche). Backers perform due diligence on prospective Borrowers and inherit more risk than LPs. Borrowers on Goldfinch are financial institutions (e.g., asset managers or fintech lenders) that submit term sheets for loan approval before accessing any liquidity. They then extend loans to businesses.

The total value locked (TVL) on the protocol is made up of USDC deposits. In exchange for LP deposits, users receive FIDU, an ERC-20 token representing principal and a pro-rata share of accrued interest payments in the Senior Pool redeemable for USDC. Due to the nature of the borrower loans which tend to be 1-4 years, LPs have recently had to rely on borrower repayments for liquidity. As such, the TVL on Goldfinch can be quite sticky."

"Goldfinch sources the liquidity to originate loans via a tranched system, where participants can either provide liquidity to the Senior Pool or to individual Junior Pools. The key difference between the two is that Senior Pool deposits are spread across all pools on the platform, while Junior Pools represent loans made to individual borrowers. The Junior Pools are subordinate to the Senior Pool, meaning that should a borrower default, Senior depositors will be paid back before Junior."

"The protocol works by extending credit lines to lending businesses. These businesses draw down stablecoins from Goldfinch’s token pool, and then they exchange it for fiat and deploy it on the ground in their local markets. On the investor side, crypto holders can deposit into the pool to earn yield. Lending businesses’ interest payments to the protocol are immediately disbursed to all investors."




Validator Stats

Liquidity Mining



Other Details

Oracle Method

"Goldfinch does not use oracles. This is explained in their documentation here. Instead, their protocol relies on specific non-transferable UID tokens based on identity requirements. Front-running is considered in their documentation. Due to the permissioned nature of the protocol, front running is mitigated. This is an impressive breakdown of how this might be countered. Users should feel like this protocol has done a significant amount of security researching - we've never seen this attack vector so carefully considered. Goldfinch is not vulnerable to flashloan attack. This is because they are mitigated by Goldfinch's design (i.e. a 0.5% withdrawal fee)."


"The protocol enforces Compliance standards such as know your customer (KYC), anti-money laundering (AML), and on-chain reputations using Goldfinch’s novel soul-bound Unique Identity (UID) which incentivizes users to maintain credibility and accountability.

In February 2022, Goldfinch governance passed GIP-01 which introduced the FIDU-USDC Curve pool. The goal was to provide a fee-free way of moving in and out of FIDU. This approach would relieve the Senior Pool from withdrawals and allow greater exposure to FIDU. Since the Curve pool launch, the FIDU tokens have shown significant fluctuations in their price, likely due to a liquidity risk premium or discount. In addition to the liquidity improvement, Curve users can purchase FIDU outside of the Goldfinch dApp, gaining exposure on the Senior Pool. However, in order for users to claim principal and interest from the Goldfinch protocol, they must undergo KYC and mint a UID identity token in order to redeem USDC for FIDU (e.g., the Senior Pool token)."

Their Other Projects


  • Can be found [Insert link here].


"Outstanding loans grew slightly by 2.1% in H2 2022, going from $99.2 million to $101.3 million. However, the YoY growth was significant, with a 162% increase. There was $74 million in loan originations and $11.4 million in principal repayments in 2022. On December 16, 2022, the Cauris Fund #4: Africa Innovation Pool deployed $2.1 million in funding which contributed to the increase in H2. About $72 million, or 63% of total current outstanding loans, originated in H1 2022 — the largest being $20 million to Stratos, the first North American borrower."

"Goldfinch’s model of bringing off-chain finance to DeFi is proving stable despite a stormy six months of repeated market downturns. The 30d trailing average USDC APY on Goldfinch has risen 114% since the market crash this spring, from 5.15% in May - 11.03% today, while maintaining 0 defaults. The decentralized credit protocol remains isolated from volatility by bringing yields from off-chain businesses on-chain, via a platform for supplying USDC to proven fintechs and credit funds worldwide. The protocol maintains this beautifully boring zero losses chart due to the portfolio strength of these Borrowers, who provide the protocol’s investors with full transparency to due diligence documentation including off-chain collateral assets, underlying investment risk metrics, and reporting."

"On April 26, Goldfinch’s loanbook hit $100M. Last February, the protocol had $1M in loans."

  • From their blog (11-1-2022):

"We’re already seeing the beginnings of this. Active loans on the protocol doubled every two months in 2021, up 154X from $250K a year ago to now $39M that is financing 200K+ borrowers across 18 countries. This capital is being used for a wide range of productive uses from motorcycle taxis in Kenya, to small businesses in Brazil, to eco-friendly cookstoves for low-income households in India — just to name a few. All of this growth is thanks to the incredible Goldfinch community. To date, 35K+ people have completed KYC and 5K+ people are actively participating as Liquidity Providers and Backers through the protocol. Plus, the Goldfinch Discord has quickly grown to a lively community of 45K+ people from all over the world."

Projects that use or built on it

"Tugende Kenya, a motorcycle taxi financier headquartered in Uganda, borrowed $5M from the Goldfinch protocol, and breached several covenants of their loan agreement by making a $1.9 million loan to another related branch, Tugende Uganda. According to the blog post, due to macroeconomic factors (most notably inflation and rising energy costs), Tugende Uganda’s balance sheet has deteriorated, resulting in a net 3.95% write-down to the NAV of Goldfinch’s Senior Pool."

"Said it’s working with PayJoy in Mexico, Aspire in Southeast Asia, and QuickCheck in Nigeria, which have collectively drawn down $1M from the Goldfinch protocol and deployed it to thousands of their end borrowers."


"Whereas Maple is focused on enabling crypto-native institutions to access on-chain capital, Goldfinch aims to do the same for real-world businesses, as these companies are able to use the protocol to access credit to help finance their operations."

“Goldfinch is offering these real loans that are tied to real world activity [and] still has really good yields,” co-founder West told The Defiant.

He noted that yields on protocol Compound Finance are around 2% while Goldfinch’s senior tranche is more than 8%. The protocol offers the senior tranche to passive investors and a higher yielding junior tranche to “backers” who actually propose and negotiate with borrowers on a per-investment basis.

West said projects like Centrifuge, Maple Finance, and TrueFi are making moves in the unsecured loan space. He contends “unsecured,” meaning the loan isn’t collateralized, is a misnomer because the debt is backed by off-chain assets."

Pros and Cons



Team, Funding, Partnerships, etc.


"Many contributors to Goldfinch are public and they cross-confirm their commitment to the protocol on personal social media."


  • From their blog (6-1-2022):

"Announced an additional $25M in funding, led by Andreessen Horowitz (a16z crypto).Newcomers include Bill Ackman, Blocktower, Kingsway Capital, Helicap, YC Alumni Fund, Jinglan Wang, MSA Capital, and more. All prior investors in Goldfinch participated as well, including Kindred Ventures and Stratos Technologies."

"Goldfinch today also announced it has received $1M in funding from investors including Kindred Ventures, Coinbase Ventures, IDEO CoLab Ventures, Stratos Technologies, Variant Fund, Alex Pack, and Robert Leshner."



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