Authors: mikesall & blakewest, co-founders Warbler Labs
Summary: This is a proposal to the community for Goldfinch’s roadmap. It’s a little different from the standard type of proposal because it isn’t just a feature. It’s a whole way of thinking. So we’re using a slightly different format than our standard proposal template.
When people first hear about Goldfinch, they often don’t realize just how ambitious it is. Or more accurately, how ambitious it could be, if we’re all ready to be.
So let us start by saying something crazy. We think it’s inevitable that all private debt will move on chain. All of it. The whole multi-trillion dollar market of it.
Eventually, for people running companies, it will seem silly to get a loan from a private bank rather than a crypto protocol. Going to a bank will be like bartering your goods with your neighbors instead of using the internet to sell them online.
Even more, the whole market will grow. People who could never access capital before will have an option with crypto. New businesses will flourish in new communities because crypto will reach them when banks couldn’t or wouldn’t.
It’s going to take years. The same way it took years for online stores to become the obvious option — or the only option for many new types of stores. It might be a long path, but we’re convinced it will happen. Eventually, if you run a business, and you need a loan, you’ll use a protocol.
Goldfinch will be that protocol.
In this future world, Goldfinch will organize trillions of dollars of global debt. We’ll build it on a foundation of day-to-day productive activities. Not crypto speculation or financial engineering. Just simple economic growth. And a lot of that growth will only be possible because Goldfinch exists. Because Goldfinch will reach people who could never access capital before.
And for the providers of that capital, it will be an easy choice. Goldfinch will span all global activity, so it will offer an incredibly safe, diversified, reliable yield for stablecoins.
Already, we see the earliest signs of this working. In one year, Goldfinch has grown to $69M in active loans across 19 countries and hundreds of thousands of end borrowers. Yet this is just a tiny drop in the bucket of where we’re really heading.
We have a lot to do — let’s get to work.
Every step along the way, we must identify the main constraint to growth and find ways to remove it. We can think of the constraints in terms of the different sides of the Goldfinch marketplace: borrowers, backers, and LPs. Right now, the recent new pools show ample demand from high quality borrowers. But backers and LPs are still a constraint. We can solve this constraint in three core ways —
- Engine: The core functionality of the protocol. There are a number of core functional elements of the protocol that we still need to build in order to enable massive scale. We need to finish building this engine.
- Access: The ability and ease for people to use the protocol. Even with an engine built, there are limits to who might be able to access it. We need to make it incredibly easy for anyone in the world to use Goldfinch — from individuals all the way to major institutions.
- Community: The group of people building the protocol’s engine and access. None of this is possible without an amazing community to make it happen. We need to foster the community of people who will build this engine and improve people’s access to it.
We propose efforts across all three of these core areas, both for the immediate term (6 months) and mid term (6-12 months). We leave longer term efforts (12+ months) for future discussions after we learn from these efforts.
Immediate term (next 6 months):
- Automated leverage ratio — As the whitepaper describes, we need an automated leverage ratio, where the protocol uses an automatic algorithm to calculate how much capital the senior pool allocates to each borrower pool, based on the number of backers in those pools.
- Staking as coverage — We should implement a staking mechanism where people can stake the GFI token to provide coverage against defaults. In return, the protocol could use the reserves in some form to compensate people for providing this coverage.
- Lock-up for voting power —We should implement a system where people can lock up their GFI in order to increase their voting power in governance decisions. This would ensure the most long-term-oriented community members have the most impact on decisions.
Mid term (6-12months)
- Auditor System — As the whitepaper describes, we need an Auditor system, where auditors approve new borrowers and ensure there is no collusion between the borrowers and backers.
- Origination fees — As the whitepaper describes, we should implement origination fees where people who set up new loans on the protocol receive a fee as the borrower pays back the loan.
Immediate term (next 6 months)
- Lead backer pools — We should create a way for active backers to set up pools where they can raise money from other people and then deploy that money as backers into different borrower pools. This would make it easy for less active backers to participate in junior tranches without needing to evaluate every pool, while enabling “lead backers” to earn additional yield by being a great backer on behalf of other people.
- Frontend refresh — We should improve the frontend app so that’s it’s easier for new people to understand how Goldfinch works and how they can participate. We should also make the app load faster.
- Localized borrower support — We should improve the process for new borrowers and provide geo-specific advice to help them to get onboarded to Goldfinch, including the legal documents, entity structures, and crypto on/off ramps they use.
Mid term (6-12 months)
- Backer secondary markets — We should implement ways for backers to sell their positions in borrower pools to other backers, in order to enable more liquidity for backer positions which otherwise have long lock-ups.
- Scaling solution — We should implement a scaling solution such as an L2 so that we can reduce gas fees and make Goldfinch economical for smaller transactions.
- Backer reputation system — We should create a way for backers to build up their public reputation as being great backers. This can help create a valuable signal for new participants, to see what the great backers are doing, while also making it easier for backers to establish themselves in the community and set up the “lead backer pools” mentioned above.
- Frontend localization — The protocol should be localized to languages in every geography, to reflect the fact that Goldfinch is a global protocol with a global community.
Immediate term (next 6 months)
- Community grants program — We should set up a community grants program to encourage community contributions to the protocol and growth. This should be a broad program that covers all types of contributions.
- DeFi integrations — We should find ways for the Goldfinch protocol to integrate more deeply with the rest of the DeFi ecosystem. Goldfinch is a composable building block and we should integrate with other DeFi building blocks.
Mid term (6-12 months)
- Enhanced governance system — We should improve Goldfinch’s governance by building up strong delegates, enabling vote locking (mentioned above), potentially implementing governance mining, and eventually removing the council.
- Referral program — We should set up an automated on-chain system to compensate people or protocols for bringing new participants to Goldfinch.
- Localized community groups — We should set up localized groups that are incentivized to grow the protocol in their local geographic region.
- Community frontends — We should build out tooling, libraries, and incentives to encourage community members to provide new frontends or other ways for accessing the Goldfinch ecosystem.
We’re excited to see what the community thinks of this roadmap. Hopefully this will show the massive potential Goldfinch has and lays out a clear path for us to get there. We welcome discussion, thoughts, and ideas. Then, when we’ve incorporated everyone’s input, let’s put it to a vote, so we can agree as a community on the roadmap we will build towards, together.