Oct 20, 2022
Goldfinch’s growth and performance
A look at how the Goldfinch network has expanded from launch
Goldfinch is a decentralized, globally accessible credit protocol with a mission to connect the world’s capital to the world’s growth, with a focus on expanding access to capital and fostering financial inclusion by bringing credit activity on-chain.
As one of the first DeFi protocols to bring real-world lending on-chain, Goldfinch is revolutionizing the $1T+ global private debt market by unlocking access for credit funds and fintechs. In just under two years of operation the protocol has distributed over $100M in loans with zero losses to date.
At the beginning of Q4 and following significant market turmoil over the last few months, we take a look at Goldfinch’s growth and performance to date.
Organic growth
Goldfinch launched in January 2021, following the publication of the Goldfinch Whitepaper 1.0 in July 2020. By the end of January 2021 the protocol had already distributed its first $1M in loans, displaying strong Borrower interest and early Investor traction in junior tranche opportunities for higher yields or senior tranche exposure opportunities optimized for ease and diversification.
From launch, the protocol doubled its active loans every two months for 154x growth into 2022.
In January 2022 the protocol raised an additional $25m in funding led by Andreessen Horowitz (a16z crypto) to continue that momentum, alongside a dynamic group of investors with diverse backgrounds from crypto-native institutional investors, tech startup veterans to global credit-sector funds and traditional hedge fund titans, including Bill Ackman, Blocktower, Kingsway Capital, Helicap, YC Alumni Fund, Jinglan Wang, MSA Capital, Kindred Ventures, Stratos Technologies, and more.
By May 2022, Goldfinch crossed over $100m in active loans distributed to established fintechs and credit funds in emerging markets.
The protocol met this milestone just after expanding access for U.S. accredited investors (individuals + entities) and non-U.S. entities to participate as Investors, broadening the community of those who could earn off-chain yields on USDC deposits beyond the protocol’s initial launch segment of non-U.S. individuals.
Other crypto networks continued to take note of Goldfinch’s growth and stability; in May 2022, the Frax stablecoin community voted to supply funds to the Senior Pool over time to help Frax weather the bear market by earning the protocol yields uncorrelated to the rest of crypto. AlloyX, Enzyme, Carapace Finance, and Nexus Mutual also launched integrations for their users to gain access to Goldfinch exposure. In July 2022, the Celo community accepted Goldfinch into the Celo Alliance for Prosperity, created to bring mission-aligned organizations together to collaborate on Web3 technologies that help create the conditions of prosperity for all.
Loan performance
Goldfinch’s portfolio of Borrower Pools has continued to perform as it has grown. As of October 2022, the portfolio of Pools across the protocol has a significant repayment track record of over $18M with zero losses across 14 total loans, generating over $1M in protocol revenue and over $7M in total gains. At the time of publishing, 11 loans are active with just over $99M outstanding, less than two years after the protocol’s launch.
The portfolio of Pools has continued to expand and see significant traction as result of the high performance of Goldfinch’s Borrowers, currently established credit funds and fintechs with track records of success in emerging markets.
In July 2022, the protocol crossed over 1 million people and businesses reached across 20+ countries via Goldfinch’s Borrowers, from providing accessible debt to early-stage and sustainability-focused agrotech companies in Mexico to financing small business ownership in Kenya, and beyond.
Utilization and yields surrounding the crypto downturn
Goldfinch’s returns on USDC were cited by Messari in February 2022 as “among the highest in DeFi.” Despite significant crypto market downturns over 2022 this still holds true today; according to data from DeFI Llama, as of August 2022, Goldfinch has the highest USDC APY among protocols with at least $50M TVL.
Today, Investors earn at least 7% USDC yield, generated from monthly repayments by Borrowers, and additional yield from native GFI token rewards totalling ~17% APY as of August 2022.
From January to May 2022 Goldfinch had an average utilization rate of 77.4% across Pools. Pool utilization post-May has remained in the high 90% ranges, displaying the continued stable use for Goldfinch’s capital despite global macroeconomic downturns as well.
Goldfinch’s stablecoin rates, protocol revenue, and borrowing volume holding steady while most protocols experienced a decline in core metrics throughout the first half of 2022 is a testament to the long-term stability of bringing real-world investment to crypto.
Moving forward
Goldfinch continues to grow and thrive, while displaying the security and stability that bringing real-world lending on-chain can offer to those participating in decentralized finance.
Goldfinch’s Borrowers have at least 2–10 year track records growing through periods of high inflation, government uncertainty, market downturns, and COVID-19. As such we expect the protocol’s traction to continue to grow; Goldfinch’s Borrower Pools are heavily concentrated in asset financing and productive use cases–not consumption or discretionary spending–with Borrowers who have superior local knowledge and skills to mitigate risk.
If you’re considering becoming an Investor on Goldfinch but would prefer to speak to a person first, fill out the interest form here. To receive weekly emails covering Goldfinch’s news, traction, events, and landmarks, sign up to receive Goldfinch Community Updates — or follow the Goldfinch Foundation on Twitter at @goldfinch_fi.
Ready to get started? Follow our step-by-step Investor guide to begin participating in Goldfinch today.
