Goldfinch is a decentralized credit protocol that strives to democratize the lending process by eliminating the need for crypto collateral. It operates on the Ethereum blockchain and is governed by the GFI token. Goldfinch's unique approach aims to allow a broader range of borrowers to participate, expanding the potential capital providers who can gain exposure. The protocol is designed to generate sustainable, high-quality stablecoin yields from real-world economic activity, providing a buffer against the volatility often associated with DeFi. Goldfinch aims to make DeFi lending more accessible by enabling loans that can utilize both on and off chain collateral.

Goldfinch operates through a system of four core participants: Borrowers, Backers, Liquidity Providers, and Auditors. Borrowers propose Borrower Pools with specific terms such as interest rate and repayment schedule. Backers assess these pools and decide whether to supply first-loss capital. Once Backers supply capital, Borrowers can borrow and repay through the Borrower Pool. Liquidity Providers supply capital to the Senior Pool to earn passive yield. The Senior Pool then uses a Leverage Model to automatically allocate capital to the Borrower Pools, based on the number of Backers participating in them. Auditors, who are randomly selected by the protocol, vote to approve Borrowers, providing a human-level check against fraudulent activity.

Goldfinch seeks to bridge the gap between traditional finance and the DeFi space by enabling loans without crypto collateral. This opens up a wide range of potential use cases. For instance, businesses worldwide can access financing through the protocol, expanding their opportunities for growth. Investors can also earn yields by supplying capital to the Senior Pool or directly to attractive Borrower Pools. Furthermore, the protocol's unique entity check and governance system aim to provide a level of security and trust, making it a viable option for those looking to participate in the DeFi space without the typical risks associated with crypto collateral.

Goldfinch was launched with the aim of changing the global credit marketplace by creating a single platform where everyone, from startups to institutions, can borrow from the same capital markets. The protocol's design is based on the principle of "trust through consensus", which relies on the collective assessment of participants rather than their crypto assets. This approach aims to expand access to capital and contribute to the DeFi space. The protocol has deployed funds in active loan value and continues its operations, with its native GFI token playing a role in its governance.

Goldfinch Protocol seeks to offer a different approach to the lending landscape with undercollateralized loans, a model that aims to enhance accessibility for borrowers. Traditional decentralized lending protocols require borrowers to overcollateralize their loans with crypto assets, which can be a barrier for many potential borrowers. Goldfinch, however, allows for crypto borrowing without crypto collateral. Instead, loans are fully collateralized off-chain. This model is based on the principle of "trust through consensus," where borrowers demonstrate creditworthiness based on the collective assessment of other participants rather than their crypto assets. This approach seeks to enable a broader range of borrowers to participate, including those who may not have significant crypto assets. The protocol incorporates a system of Participants, Borrowers, and Auditors, each playing a role in the lending process. This decentralized credit protocol strives to utilize the potential of cryptocurrency, such as global access to capital, while leaving the actual end-borrower loan origination and servicing to businesses prepared to handle that in their own communities.

The GFI token is the native token of the Goldfinch Protocol and has a role in governing and participating in the ecosystem. GFI holders have the opportunity to participate in community governance, contributing to the direction of the protocol. The token also serves as a non-financial motivation for participants, including those who contribute to the Senior Pool. The community has the capacity to provide grants to participants that contribute to the Goldfinch protocol and ecosystem. In the future, GFI is expected to have additional functions such as Backer Staking, where Backers may stake their GFI tokens on other Backers to provide them with additional capacity when participating in Borrower Pools. This GFI function aims to mitigate potential loan defaults. Auditor votes, which are necessary to grant Borrowers permission to borrow from the protocol, are facilitated by the GFI token. Auditors stake the GFI token to be considered for participation in Auditor Votes.

Goldfinch Protocol utilizes a distinct risk assessment mechanism known as "trust through consensus" to evaluate borrower creditworthiness. This mechanism does not depend on the borrower's crypto assets but on the collective assessment of other participants in the protocol. Borrowers propose their loan terms in what is known as a Borrower Pool, which includes details such as the non-monetary rewards rate and repayment schedule. These Borrower Pools are then evaluated by Backers, who decide whether to allocate resources to them directly with first-loss capital. The protocol also incorporates a Leverage Model that determines how much capital the Senior Pool allocates towards a given Borrower Pool, based on the trust score developed by the model. Moreover, all Backers, Borrowers, and Auditors are required to pass a "Unique Entity Check" to participate, ensuring they are unique entities and preventing fraudulent activity. This approach seeks to offer a more equitable and inclusive lending platform in the cryptocurrency space.

Goldfinch Protocol seeks to simplify the lending process and facilitate global lending operations. Unlike traditional DeFi lending platforms that require asset backing with cryptocurrencies, Goldfinch allows borrowers to use off-chain collateral. This approach aims to broaden DeFi lending accessibility, especially for those who do not have large quantities of cryptocurrency. The protocol works by allowing businesses, particularly from emerging markets, to propose loan terms to the protocol. The community of participants then decides whether the terms are satisfactory and can contribute either directly to the borrower pool or indirectly through automatic allocation of capital across the protocol. This system encourages financial inclusion and aims to make crypto asset loans more accessible, while also striving to provide non-monetary incentives to participants.

Goldfinch Protocol employs a distinct method for credit scoring and risk evaluation that is decentralized and does not require crypto collateral. Instead, it uses a principle known as "trust through consensus," which allows borrowers to demonstrate creditworthiness based on the collective assessment of other participants in the protocol, rather than their crypto assets. This method seeks to make crypto borrowing accessible to a broader range of borrowers. Goldfinch's credit scoring model incorporates off-chain assets and income as collateral for funds. The protocol has three key roles: Participants, Borrowers, and Auditors, each playing an integral role in the credit scoring and risk evaluation process. The protocol uses a "unique entity check" to ensure that each participant is a distinct entity, thereby seeking to prevent Sybil Attacks. Goldfinch's credit scoring model uses a system of junior and senior tranches in its Borrower Pool smart contracts to maintain balance and align objectives.

Goldfinch Protocol seeks to address the challenge of credit availability for underserved and unbanked populations through a decentralized platform that does not necessitate crypto collateral. Traditional lending platforms often necessitate borrowers to overcollateralize their loans with crypto assets, which can be a substantial barrier for those who lack access to large quantities of cryptocurrency. However, Goldfinch Protocol allows borrowers to use off-chain collateral, such as real-world assets, to secure their loans. This approach seeks to foster financial inclusion and accessibility in the crypto loan sector. The protocol operates on the principle of 'trust through consensus,' which allows borrowers to demonstrate their creditworthiness based on the collective assessment of community members, not their crypto assets. This approach seeks to broaden the potential pool of borrowers and lenders, potentially enabling more individuals to engage with decentralized finance.

Lenders participating in the Goldfinch lending ecosystem can receive two core non-monetary incentives. The first is the USDC APY, which is a base-level USDC acknowledgment that a participant can receive for their involvement in Goldfinch. This acknowledgment is generated from borrowers' non-financial commitments on their loans and is outlined in the borrowers' financing terms when they establish Borrower Pools. The second incentive is Participant Rewards, which are non-financial incentives all participants in Goldfinch can receive for their participation in the protocol. These rewards are not outlined by borrowers' financing terms but are dependent on tokenomics and network dynamics. The rewards can vary based on whether one is participating in Goldfinch as a Backer or as a Liquidity Provider.