Community Risk Update from Warbler Labs

Hi everyone,

We’re providing this update for the purposes of:

(i) Providing additional information: We would like to share recent information about, and our current understanding of the status of, all nine (9) borrower pools that are outstanding as of the date of this update (collectively, ”Borrower Pools”, and each respective obligor thereunder, a “Borrower”) with all current lenders to, and investors in, such respective Borrower Pools (collectively, “Stakeholders”); and,

(ii) Clarifying Goldfinch Foundation’s new risk management strategy: Following the overwhelming support of Goldfinch Foundation retaining its own, third-party Advisor (GIP-65, with 99.99% voting in favor), we would like to provide further clarity as to how Goldfinch Foundation will handle risk management and communications with respect to all Borrower Pools going forward.

(i) Providing additional information:

As informed by the consistent feedback which many of you have shared with us, upon reflection, we like to encourage more direct communication between Stakeholders and Borrowers. Borrower Pool information should be shared by Borrowers directly with Stakeholders and/or from the Goldfinch Foundation-appointed advisor (the “Advisor”).

As Goldfinch Foundation is onboarding the Advisor, who, per GIP-65, will be acting on behalf of Goldfinch Foundation for the benefit of all Stakeholders, which includes the Senior Pool, we are using this opportunity to share with you relevant information we have received from the Borrowers.

The links below contain information that reflects our understanding of where each Borrower Pool stands as of today. Content is aggregated by Borrower and Borrower Pool-specific documents can be found in sub-folders.

Please remember that you must maintain the information in such sub-folders in strict confidence as the confidential information therein is subject to confidentiality obligations of Stakeholders set forth in the underlying contractual documentation.

Almavest (4 Borrower Pools)

Borrower Pool (w/ dapp links) Amount (USDC) Maturity Date
Almavest Basket #4 10.00 million 29 Nov 2024
Almavest Basket #5 5.00 million 19 Dec 2024
Almavest Basket #6 11.81 million 20 Feb 2025
Almavest Basket #7: Fintech and Carbon Reduction Basket 10.00 million 11 April 2025

Cauris (3 Borrower Pools)

Borrower Pool w/ dapp links Amount (USDC) Maturity Date
Cauris 5.14 million 10 Nov 2024
Cauris Fund #2: Africa Innovation Pool 10.00 million 24 Feb 2025
Cauris Fund #4: Africa Innovation Pool 2.13 million 16 Dec 2024

Addem Capital (1 Borrower Pool)

Borrower Pool (w/ dapp links) Amount (USDC) Maturity Date
Asset-Backed Pool via Addem Capital 10.00 million 25 Apr 2025

Lend East (1 Borrower Pool)

Borrower Pool (w/ dapp links) Amount (USDC) Maturity Date
Lend East #1: Emerging Asia Fintech Pool 10.15 million 3 Apr 2024*

Additionally, as described in GIP-65, please note that Tugende is the only active pool that will not be managed by the Advisor, as restructuring proceedings are already in process and being led by Warbler Labs, in line with the response plan outlined last year in this update. Going forward, Warbler Labs will share Tugende updates in the Discord channel, as done in this 31 May 2024 message).

Access: Stakeholders may access the links above using their registered or digital signature email address. Most Backers and some Senior Pool participants have already been granted access and the links above are live for them. The email access lists were generated based on information available to us, but any Backer or Senior Pool participant can access this information by request. To request access, please do so via the data room itself or email us at risk@warblerlabs.com

(ii) Clarifying Goldfinch Foundation’s new risk management strategy:

As explained above, all risk management and communications with respect to Borrower Pools going forward will be handled by the Goldfinch Foundation-appointed Advisor – and not by Warbler Labs.

GIP-65, which was passed with near-unanimous approval of 99.99% of Stakeholders, has granted the Advisor full authority to maximize recovery on behalf of all Stakeholders, which include the Senior Pool. Full details about the Advisor’s role are specified in detail in GIP-65.

Specifically how this new arrangement will affect Borrower Pools is further outlined in the following section.

  • Over the last several months, we have been asking all Borrowers to directly communicate with the respective Stakeholders, and do so more frequently.
  • Starting this month, as soon as the Advisor is fully onboarded, the Goldfinch Foundation-appointed Advisor will be responsible for coordinating and improving communication between Borrower Pools and Stakeholders.
  • Once this transition period is complete, which, based on our current estimates, will not take longer than two weeks, Warbler Labs will no longer be part of any risk conversation regarding any Borrower Pool.
  • For the avoidance of doubt, and as previously noted, the Advisor is appointed by Goldfinch Foundation based on your votes; there is no commercial agreement or relationship between the Advisor and Warbler Labs.
  • Once Stakeholders and Advisor have had an opportunity to review Borrower Pools in detail together, it will be up to Stakeholders and Advisor to agree on what risk strategy will work best for each of the Borrower Pools, and such risk decisions may be informed by joint discussions via Discord, video conference calls, future proposals and voting procedures, among other possible venues to be mutually agreed by and between Stakeholders and Advisor in the future.
  • To the extent that Stakeholders would like to set aside even more Goldfinch Foundation resources to further equip and empower the Advisor to pursue alternative collection actions, including but not limited to possible litigation against defaulted Borrower Pool(s) such as Lend East (including possible litigation against the controllers and/or co-conspirators of Lend East), any such strategy or procedure may also be incorporated into future proposals.
  • It is important to note, however, that the Advisor remains a third-party consultant to Goldfinch Foundation, and not himself a Stakeholder or a Goldfinch Foundation officer or employee. Stakeholders may empower him and rely on his risk management and negotiation expertise, but the underlying Borrower Pool obligations remain with Stakeholders. For that reason, we continue to encourage each and every Stakeholder to maintain close, direct communication with your respective Borrower(s) wherever applicable.

We believe that, if our community gives this new arrangement a shot, and helps set the Advisor up for success, he will be able to support Stakeholders in the best way possible.

As soon as the Advisor is fully onboarded over the next week or so, he will reach out to Stakeholders to discuss the next steps.

As noted above, please feel free to reach out to us at risk@warblerlabs.com with any technical issues accessing information above.

Best regards,

Warbler Labs

Hi @mikesall I am confused about this part. In previous messages you mentioned Warbler has already been empowered by some backers to sue LendEast and started legal action against LendEast.

Are you saying that eventually nothing was done or that the Goldfinch protocol might start a new litigation process in parallel of Warbler’s?

Generally speaking, can you explain why getting Warbler out of the picture would increase the chances of recovery?

We were not clear that hiring the consultant would mean Warbler can get out of any responsibility. I find it extremely disappointing that you are taking this opportunity to officially give up on the project.

To some extent, I view the governance proposal appointing the consultant as malicious, as you didn’t disclose that the consequence of this appoitment was releasing Warbler from any responsibility.