Goldfinch (GFI), DeFi Private Loan Funding

Goldfinch (GFI) is a Real World Asset (RWA) play with some of the most reputable backers and team in the industry (former Coinbase employees co-started GFI). Specifically, it is lending platform for Private Debt (aka debt NOT funded by banks). The project has a non-inflationary low supply of (~114 million), but does carry dilution risk.

A little background on private debt: It is a ~$1.2 Trillion dollar industry, pretty common in business (I once gave a businesses of mine a 1 week bridge loan, for example, which is totally legal with the right paperwork). Because these loans are often too risky for banks, they carry interest rates on the higher side. An example would be a real estate loan, construction project, loan to a business etc. Terms vary greatly, and because of the risk, the best private debt managers are the ones who are good at collecting and restructuring defaults.

Age: ~3 yrs

Current Market Cap: $270,000,000

Total Supply: 114,285,000

Circulating Supply: 72,000,000 (63%)

Whale Holdings (> 5%): 9%

What is the project?

• A decentralized RWA of loans that offers yield to capital providers (investors)

What is the product?

• An operating system that sits on top of Goldfinch

• Legacy product: One senior pool of primarily emerging market private debt (8.62% yield) - phasing out this model, but the pool will remain until loan maturity

• Developing robo-advisor via Heron Finance, which will use the Goldfinch OS

Revenue potential

• Funds managed on Goldfinch will earn an initiation fee, and % of Assets Under Management, commonly known as AUM

• Legacy revenue: Goldfinch earned several fees, including 10% on any interest generated from the loans. This is being set to 0% under the new model to incentivize new investors.

Tokenomics

• Incredibly low supply and well documented distribution, see below

• Large holding for backers, distributed among many backers. Large number of different backers means dilution is likely and will be very unpredictable, see below for distribution, distribution schedule is also below

Team & Community

• Mike Sall - formerly Head of Product Analytics at Coinbase

• Blake West - formerly Engineer for Core Payments team at Coinbase

Financial partners

• Andreessen Horowitz, Coinbase Ventures, Bill Ackman, SV angel, others

Risks & Downsides

• Development of new robo-advisor

• Onboarding of lender to robo-advisor portfolios

Goldfinch checks almost all of the boxes for a great project, the remaining question is what is their plan to grow revenue? They have no plans to expand the business under the previous model. The new model is brilliant, bring other lending businesses on to the Goldfinch OS and charge small management fees. It will allow them to grow total $ aka AUM, which means more revenue. However, there is no guidance on time frame for when they may start onboarding new debt. For that reason, we’re unable to project revenue or score the project. Will update if and when more information is provided by GFI.

*Information is not intended to be financial advice to the reader.