RWA Lending Protocols
RWA Lending Protocols bridge traditional finance and blockchain ecosystems. They enable the tokenization of real-world assets for use as collateral or credit assessment.
RWA Lending Protocols bridge traditional finance and blockchain ecosystems. They enable the tokenization of real-world assets for use as collateral or credit assessment. This enables decentralized lending and borrowing opportunities.
The largest RWA Lending Protocol is Goldfinch (GFI).
1. About Goldfinch
Most crypto lending platforms require the borrower to put up more cryptocurrency than the loan amount. This can be difficult for many people. With Goldfinch, the loans are backed by real-world assets and income.
Goldfinch uses a system where trust is built on what other people in the network think, not just how much crypto you have.
2. Goldfinch Tokens
Goldfinch has two ERC20 tokens - GFI and FIDU. Goldfinch also uses USDC stablecoins for investments and loans.
GFI is the main token of Goldfinch. It's used for several things:
Voting on decisions about the platform.
Being staked (or locked up) by Auditors, who check borrower's trustworthiness.
Paying rewards to these Auditors.
Giving out community grants.
Staking on financial backers of the platform.
Various incentives within Goldfinch.
Here are the core metrics of GFI:
Price: $1.3
All Time High: $32.94 (12-Jan-2022)
All Time Low: $0.29 (19-Jun-2023)
Market Cap: $82.49m
Fully Diluted Valuation: $148.16m
FIDU is a token that represents the money an investor puts into what's called the Senior Pool. When someone invests in this pool, they get equal FIDU tokens. These tokens can be exchanged back for USDC using the Goldfinch app.
The exchange rate, or how much USDC you get for your FIDU, depends on the pool's overall value and there's a small fee (0.5%) to do this. The value of FIDU goes up over time as the pool earns interest from its loans.
3. Goldfinch Participants
Investors: These are people who give USDC stablecoins to the system for others to borrow.
Backers: They choose specific loans to support and get higher returns for the extra risk they take.
Liquidity Providers: They spread their money across many loans for safety and get paid for it.
Members: These are investors who also give a special Goldfinch token (GFI) to help the system grow and get extra rewards.
Borrowers: These are the people or businesses that want to borrow money. They set up a loan contract with details like interest rates and when they'll pay back.
Auditors: They're chosen randomly to check borrowers are trustworthy and get paid for this work.
4. How Goldfinch works
Borrowers, who are usually businesses that lend money in their local areas, ask for a loan in the system.
They get USDC from their loan pool, change it into their local currency, and lend it out in their community.
Investors can put their money directly into these loans or spread it across many loans for safety.
This way, borrowers get access to money from all over the world, and the local businesses handle the loan details.