Gravity Finance

What is the Goldfinch Protocol?

The Goldfinch Protocol is a decentralized, globally accessible credit protocol designed to bring the world’s credit activity on-chain. Its primary mission is to expand access to capital and foster financial inclusion by facilitating crypto loans without the need for crypto collateral. This innovation addresses a significant barrier in decentralized finance (DeFi), where most lending protocols require borrowers to over-collateralize their loans with crypto assets. By removing this requirement, Goldfinch opens the doors for a broader range of borrowers, particularly in emerging markets, to access cryptocurrency capital.

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Recent Video Interview

Main points of the interview:

• Goldfinch's approach to addressing the challenge of lending against real-world assets without crypto collateral.
• Goldfinch recently launched on Coinbase under the ticker GDFI and closed a financing round valuing the network at $400 million.
• The importance of focusing on specific data needs rather than collecting data without a clear purpose.
• Goldfinch's mission is to enable global businesses to access capital through a decentralized system.

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Key Features of Goldfinch Protocol

• Decentralized Credit Protocol: Goldfinch allows for crypto borrowing without requiring crypto collateral, making it accessible to a broader audience.
• Trust Through Consensus: The protocol's unique approach to creditworthiness relies on collective assessments by participants, rather than traditional collateral.
• Focus on Emerging Markets: Goldfinch prioritizes lending businesses in regions where traditional finance is limited, starting with markets in Latin America, Africa, and Asia.
• Fully Collateralized Loans: All loans are secured with off-chain assets, ensuring that the protocol maintains a robust risk management framework.
• Global Financial Inclusion: By providing access to crypto capital, Goldfinch aims to expand financial opportunities to underserved populations globally.

Tokens in the Goldfinch Protocol

Goldfinch utilizes two primary tokens: GFI and FIDU, both following the ERC-20 standard. GFI is the native token of the protocol, playing a crucial role in governance and incentives. It allows holders to participate in community governance, influencing decisions regarding protocol upgrades, parameter changes, and more. Additionally, GFI is used for staking, rewarding Auditors and Backers, and providing incentives for various participants within the ecosystem. Over time, GFI’s utility is expected to expand, further integrating it into the protocol’s operations.

FIDU, on the other hand, represents the deposits made by Liquidity Providers to the Senior Pool. When Liquidity Providers supply capital to the Senior Pool, they receive an equivalent amount of FIDU, which can be redeemed for USDC. The value of FIDU increases over time as interest payments are made back to the Senior Pool, minus a small withdrawal fee. This token structure enables Liquidity Providers to gain exposure to diversified investments while maintaining liquidity within the protocol.

Expanding Financial Access

Goldfinch is particularly focused on borrowers who can benefit most from its innovative lending approach. The protocol has established a strong presence in emerging markets, where the demand for crypto's liquid and multinational nature is high. Traditional financial systems in these regions often suffer from inefficiencies and barriers that limit the flow of capital. Goldfinch addresses these challenges by enabling businesses to access crypto loans, which they can then convert into local currency and deploy in their communities.

Goldfinch’s borrower network spans over 28 countries, including businesses like PayJoy in Mexico, QuickCheck in Nigeria, and Greenway through Almavest in India. These businesses use the capital provided by Goldfinch to support local economic growth and extend financial services to individuals who might otherwise be excluded from the global financial system.

Governance and Community-Driven Development

The Goldfinch Protocol is governed by a decentralized autonomous organization (DAO), ensuring that the community has a direct role in its development and decision-making processes. This community-driven approach is crucial for maintaining the protocol's integrity and ensuring that it evolves to meet the needs of its users.

Governance functions include upgrading contracts, changing protocol parameters, and managing the distribution of rewards. The protocol's documentation is also community-driven, encouraging contributions and participation from its users to continuously improve and refine its features.

Backers

Goldfinch is backed by Andreessen Horowitz, Coinbase Ventures, Variant, Kindred Ventures, IDEO CoLab, SVAngel, Mercy Corps Ventures, a_capital, Access Ventures, Stratos Technologies.

Other Projects in the RWA (Real World Assets) Category

Some other projects in the RWA category: Polymesh, TokenFi, Pendle, CHEX Token, Clearpool, Polymath, Sologenic, Credefi, Lumerin, Artrade...

Project Development

In the process of optimizing Goldfinch Protocol's CallableLoan contract, Warbler Labs faced a challenge when the contract size exceeded the 24.5KB limit, making it non-deployable on the Ethereum mainnet. Software Engineer Dalton Sweeney and the team implemented several strategies to reduce the contract size from approximately 26KB to 21.5KB. The most impactful strategy was converting internal library functions to external, which alone reduced the size by 3.9KB.

Additionally, they removed unnecessary convenience functions like withdrawMax and withdrawMultiple, saving 0.6KB. They also shortened and removed error strings, particularly targeting those in OpenZeppelin’s contracts, which reduced the size by almost 1KB. By adopting these measures, they managed to optimize the contract's size without sacrificing essential functionality, ensuring its deployability and enhancing security.

Gravity Finance Price Analysis

As of November 25 2024 Gravity Finance has a marketcap of $2.5M. This is {{percentagefromath}} from its all time high of $0.0367669. In terms of its tokenomics, there's a total supply of 1.2B with 85% currently outstanding. Keep in mind Gravity Finance has a fully diluted value of $2.9M which many investors might interpret as overvalued.

Of course, don’t trust price predictions alone, always check the Coinrotator token screener to follow the trending market.