Launched on Ethereum in February 2021, and backed by a16z, Coinbase Ventures, Variant, and others, GoldFinch is a globally accessible credit protocol with a mission to leverage DeFi to expand access to credit – both for people who need capital, as well as making it easy for regular people to contribute capital and stand to earn.
The protocol offers crypto loans without requiring crypto collateral, something which distinguishes them, and an idea they seem to be scaling quite successfuly.
According to Blake West, Warbler Labs CTO, and GoldFinch Co-Founder:
“Crypto feels so potentially transformative, that to not have it go out into the real world feels like a real disappointment compared to what’s possible.
I’m proud of the GoldFinch community that the network is showing it’s possible to access DeFi’s yields while also actually expanding financial inclusion.”
– Co-Founder, GoldFinch
You can see that:
are where most loans are active.
In Uganda, GoldFinch has extended its pools to Tugende, a Ugandan credit and asset finance firm which provides loans to help people purchase motorbikes for business.
How It Works
GoldFinch does not lend directly itself. Instead, the protocol works by extending credit lines to lending businesses, like it has done with Tugende, mentioned above.
These businesses use their credit lines to draw down stablecoins from the pool and then they exchange it for fiat and deploy it on the ground in their local markets. For a service like Tugende, they deploy these credit lines to locals in Kenya who want to acquire motorcycles for business.
On the investor side, crypto holders can deposit into the pool to earn yield with APY currently at 6.56%. As the lending businesses make their interest payments back to the protocol, they’re immediately disbursed to all investors.