Upgrade unlocks immediate liquidity rewards

Latest Goldfinch upgrade removes vesting for Senior Pool Liquidity Mining, for current and new LPs

The Goldfinch community has removed the 12-month vesting requirement for Senior Pool Liquidity Mining with today’s protocol upgrade to implement community proposal GIP-10. Liquidity Providers who stake the FIDU they receive for supplying USDC to the Goldfinch Senior Pool can now claim their GFI rewards at any time, with no unlock period or slashing.

Removing Liquidity Mining’s 12-month GFI unlock schedule will eliminate a key pain point for the protocol’s Liquidity Providers, helping the Senior Pool maintain its growth while reducing the complexity of participating. It was also designed to treat existing FIDU stakers fairly while still rate-limiting the total amount of GFI that unlocks at once.

Removing friction

Before the upgrade released on July 20, 2022, GFI rewards earned for staking FIDU unlocked linearly over the first 12 months of staking with early withdrawals forfeiting any remaining locked rewards. This meant that a Liquidity Provider could withdraw from staking whenever they chose, but would forfeit some GFI rewards if they withdrew before 12 months.

Warbler Labs, the core development team supporting the growth of the Goldfinch ecosystem, collected feedback and conducted interviews of potential and current Liquidity Providers as a part of providing support to the community with onboarding and protocol design. Three key themes rose to the surface as pain points resulting from the vesting and unlock schedule:

• Potential Liquidity Providers who otherwise found participation in the Goldfinch Senior Pool to be an attractive option viewed not earning the full GFI reward rate for 12 months as an inadequate Investor incentive.
• Liquidity Providers consistently provided the feedback that the unlock schedule’s mechanics were confusing, and that the potential reward rate was unclear.
• The non-standard unlock schedule led to increased technical complexity, reducing the Senior Pool’s composability.

By removing the 12-month vesting requirement and making GFI rewards claimable at any time Liquidity Providers can enjoy a more attractive, straightforward participation experience, while also paving the way for simplifications at the smart contract level by removing the vesting — increasing security and reducing attack vectors as a result.

Supporting Goldfinch LPs

Goldfinch is a decentralized credit protocol that allows for crypto borrowing by off-chain businesses without the need to provide crypto collateral. It offers sustainable, high-quality yields that are generated by real-world economic activity, sheltered from DeFi’s volatility and built for the future when all credit is on-chain.

Liquidity Providers are Investors who supply capital to Goldfinch by investing USDC in the Senior Pool, the simple participation option for automatically diversified yields. Senior Pool capital is automatically distributed across Borrower Pools on the protocol and is protected by Backer capital for lower-risk investment.

Reducing the complexity of the rewards for participating as a Liquidity Provider helps to make this process simple and straightforward for investors. To ensure that the new system did not hurt existing FIDU stakers in any way when implemented, the proposal also removes slashing for Liquidity Providers who staked FIDU before July 20, 2022.

If a Liquidity Provider who staked FIDU before July 20, 2022 withdraws, the part of their GFI rewards that would have been slashed under the original rewards design will instead not be slashed and will unlock over their remaining 12 month period. The Liquidity Provider will continue to earn their remaining GFI rewards, and can un-stake and re-stake their FIDU to begin receiving GFI rewards with no unlock/vesting period moving forward.

Get started

The Senior Pool Liquidity Mining section of the documentation has more information about staking FIDU and its GFI rewards mechanics.

Learn more about how Goldfinch works in the protocol overview, and explore its goals in the Goldfinch Manifesto. To get started as an investor in the network, follow the getting started guide or start your verification here.

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