GIP-05 Retroactive Borrower Airdrop

Authors: mikesall and blakewest, co-founders of Warbler Labs

Summary

Based on the proposals for the Backer Airdrop, this proposal suggests that Goldfinch allocates a separate retroactive reward % to the early Borrowers who participated in the protocol prior to the token launch. See full data calculations behind the proposed airdrop here.

More concretely, this proposal suggests a 0.857% retroactive airdrop for early Borrowers, vesting over 2 years. This is broken up into 2 “parts”. An “annual interest” based portion, and an “Early Partner” bonus.

Motivation

The early borrowers who used Goldfinch have been critical to the protocol’s development, and they will continue to be critical to Goldfinch’s future success. As part of being the earliest users, they dedicated significant time, effort, risk, and cost to help establish the current system that Goldfinch can now scale up with many new borrowers. These contributions include:

  • Figuring out entity structures and legal documents that uniquely work with the Goldfinch protocol, including specific docs to different geographic regions
  • Evaluating regulatory requirements from the Borrower’s perspective to help establish processes that work for both them and other Borrowers, including specific to different geographic regions
  • Being the first to demonstrate to external partners like banks and financial institutions that Goldfinch is a system they can get comfortable with
  • Figuring out the end-to-end flow of funds between the protocol, crypto exchanges/offramps, and local banks
  • Being the “guinea pigs” to test new features and processes, including patience with bugs along the way, and helping to co-create the best overall product
  • In general, taking a bet on Goldfinch and being willing to be the first to use a still unproven system without a prior lending track record

In additional to helping us create this initial foundation, we as a community need their help for future improvements. We will need to continue iterating on all of the things listed above, and it will require Borrowers who are willing to take a bet on us as a community and put in their own time, costs, and effort.

In hindsight, it was our mistake not to include this as part of the initial airdrop. By fixing this error with this retroactive airdrop and compensating them for their time and effort, we can help ensure these Borrowers continue to be valuable partners to our community going forward — not just by borrowing capital, but by contributing to all the foundational systems we will need to build in order to make it easy for more and more future borrowers to participate.

It is also worth noting that the largest recipients (Alma and Cauris) have already opened new pools, and are expected to continue expanding their activities on Goldfinch. This airdrop will help ensure that all of these borrowers continue to grow with the protocol and bring new business to Goldfinch.

In addition to the proposal, we expect the community will introduce a future proposal for borrowers to receive ongoing GFI distributions in some form. However, that requires further thinking with the community and collaboration with Borrowers.

Specification and Requirements

The airdrop is broken up into 2 parts.

  1. “Annual Interest” grant - Each Borrower would receive GFI in proportion to 1 year of annualized interest on the loans they made before the token launch. The rate of GFI per interest dollar will be 0.08074, which is the same as the LP and Backer uncapped airdrops. Multi-year pools are great from the perspective of long-term interest being generated, but are also a huge ask for Backers, so using 1 year of interest is more appropriate.
  2. “Early Partner Bonus” grant - This is a multiplier on the first part, set at 150%. This reflects the value that Borrowers provided the protocol as early partners to set up processes for introducing pools and help the protocol get up and running.

When you total this up, it comes out to 0.857% of the total supply. See the spreadsheet for full details.

Unlock schedule

  • 24 month linear unlock

Summary of Airdrop proposal

This proposal shows strong recognition for the Early Borrowers, and encourages them to continue being long-term valuable partners and contributors to the community.

Benefits

  • Incentivize these early Borrowers to continue being long-term partners to the community and help us create foundational systems for future Borrowers
  • Reflect an overall more equitable retroactive token launch airdrop — similar to how our community did the same thing for Backers in this proposal

Downside

  • No real downsides except usage of the token, but if the proposal passes, then it is assumed the community believes this is a worthwhile use of the token.

Voting

“Yes” - Means allocate 0.857% of GFI to early Borrowers as a retroactive airdrop

“No” - Means do nothing.

Resources

Airdrop calculation spreadsheet

1 Like

I believe a lot of success for the protocol has come from Almavest, therefore, definitely deserves the highest airdrop share being the top early borrower. Tying the GFI token airdrop to the annual interest is a very fair approach in my opinion. And multiplier for taking the early risk is understood.

I vote Yes.

Borrowers are extremely important partner for success of Goldfinch protocol. I’m in support of the airdrop for borrowers.
But I’ve a question on the amount of GFI allocation - how was the 150% early bonus GFI set ? The reason I’m asking that is because it looks high in comparison to backers/LP airdrops. So curious to understand bit more details on that.

@nisa Sorry for the super long delay here. But to answer your question. The 150% was arrived at because Borrowers have a highly specialized skillset, and did a lot of real behind-the-scenes work (as alluded in the first post of this thread), and also took real time and risk. So it’s hard to find quality partners who have both the skills, the network, and the willingness to work with an early stage crypto startup. Now that Goldfinch has proven things out and can leverage their work, it makes it easier for new borrowers to come on. So we thought that those early partner contributions should be highly valued, and 150% seemed reasonable.

1 Like

This proposal is now up for snapshot vote.
https://snapshot.org/#/goldfinch.eth/proposal/0x8c7bcee958a93160f95313a23a39a90080cb1f1774939114d6677cf745984be4

What will happen to GFI token holders? Why are there no proposals in their favor?

Not sure I understand your question. What kind of proposals are you talking to be proposed.
Please go ahead and propose what you are looking to see. Here is the proposal template - READ FIRST: Proposal template with sample

This proposal is now approved by council !