Goldfinch is a “bank” in the field of cryptocurrencies. Could Etherium (ERC-20) Protocol Replace Lending Banking? Acquaintance with the project.
In this article, we will try to understand how the protocol works and how it affects financial relationships. Also, let’s touch on some aspects of the roles of the participants in the protocol.
Goldfinch is a decentralized credit protocol that allows anyone to be a lender, not just banks.
At the moment, Goldfinch is already working with several real companies to provide loans: QuickCheck, PayJoy, Aspire, ALMA, Oya Group. All these and other companies provide unsecured loans to many people and businesses, thereby developing the financial well-being of cities and countries.
In the early days of the partnership, some of these companies took $ 1 million from the Goldfinch protocol and deployed it to thousands of their end customers. At the time of this writing, the loan amount is over $ 12 million.
At the same time, the senior deposit pool is over $ 35 million, which speaks of significant investor confidence in the Goldfinch team.
The Goldfinch Protocol has four main participants: Borrowers, Backers, Liquidity Providers, and Auditors.
Borrowers are those who want to get a loan and create pools that are valued by “Backers”.
Backers, or as I call them patrons, evaluate borrower pools and decide whether to lend. Backers also invest their own capital to be responsible for repaying the loan in case the borrower does not return the funds.
Liquidity providers are people who supply funds to the senior pool for passive profitability. This pool is a kind of leverage that automatically distributes capital to the pools of borrowers depending on how many Backers participate in them. At the moment when the capital is allocated, a certain percentage is sent to Baker to motivate his work.
Auditors play the role of a borrower approval voter who is chosen at random to check the borrower for fraud.
Below is a diagram showing all the participants in the protocol:
Summing up, I can say that this is a very interesting project that allows each of us to become a part of new financial relationships in the field of the cryptoindustry. I do not think that traditional banks can provide such a scheme of work and in the future they will have to compete not only with each other, but also with Goldfinch.
The article used materials from the whitepaper of the project.