Goldfinch

Hello!

Today i want tell you about Goldfinch. Sometime ago they launched their Flight Academy. Project is very interesting. Let me present it:

The Goldfinch team has created a simple crypto lending system based on a community assessment of the borrowers rather than their crypto holdings. It attempts to change people's views about DeFi. The absence of collateral is the main advantage over other DeFi lending options.

Goldfinch is a decentralized finance protocol that allows you to borrow cryptocurrency without cryptocurrency collateral.

Decentralized finance (commonly referred to as DeFi) is a blockchain-based form of finance that does not rely on central financial intermediaries such as brokerages, exchanges, or banks to offer traditional financial instruments, and instead utilizes smart contracts on blockchains, the most common being Ethereum. The main disadvantage of the existing crypto lending protocols is that they require excessive cryptocurrency collateral, which does not allow participation for the vast majority of Borrowers.

The Goldfinch Protocol consists of four main participants: Borrowers, Sponsors, Liquidity Providers, and Auditors.

Sponsors evaluate the Pools of Borrowers and decide whether to provide early funding.

Liquidity Providers deliver funds to the Core Pool to generate passive income. The Main Pool uses a leverage model to automatically allocate capital to the Borrower Pools based on how many Sponsors are involved. When the Main Pool distributes capital, part of its share is reallocated among the Sponsors. This increases the effective profitability of the Sponsors, which encourages them to make more risky investments, and thereby carefully evaluate the Pools of Borrowers.

The Auditors vote to approve the Borrowers what is necessary before they can borrow. The Protocol selects Auditors at random and they pass identity checks to protect against fraud.

In terms of its structure and principle of operation, Goldfinch is in many ways similar to the Tinlake platform built on Centrifuge. The main difference between Goldfinch and Tinlake is that instead of mixing real money with the blockchain used in Centrifuge by using these very assets as collateral, Goldfinch took a different approach. It uses a competent system of incentives for sponsors, as well as verification and approval of borrowers by auditors and sponsors by reviewing their documents and communicating with borrowers directly.

Now the situation on the defi market is as follows: any borrower who borrowed $ 1000 must secure his assets in the amount of approximately one and a half times the amount of the loan. This greatly slows down the development of decentralized finance. This is what Goldfinch is trying to change. The absence of the need to provide collateral will open access to capital, where proven companies in emerging markets can offer their loan conditions, and sponsors will decide whether to invest in this pool or not.