GIP-49: Protocol Fee Change for New Pool

Proposals
1

Summary

This proposal seeks approval to change the protocol fee for an upcoming borrower pool from 10% to 7%. This fee reduction is a requirement from an anchor investor in the pool, which is committing $10MM of capital. This change will not affect existing pools.

Motivation

Cerchia, a Switzerland-based fintech, is seeking to launch a borrower pool on Goldfinch backed by natural disaster insurance-linked securities. Cerchia has secured an anchor investor, which intends to invest $10MM in the pool. Given the magnitude of the check size, the investor is seeking a reduction of the standard 10% protocol fee as a “volume discount”. Volume-based pricing discounts are typical in markets, including capital markets, where larger investors often pay lower fees on a percentage basis.

Specification and Requirements

Specifics

  • Change the protocol fee for the Cerchia borrower pool to 7% of interest.

Benefits

  • Facilitates the addition of the following to the Goldfinch platform:
    • at least $10MM of new investor capital
    • a new underlying asset class of insurance-linked securities

Downside

  • Potentially set a precedent for investors to seek lower fees. As noted, this is a common feature of markets.
  • Non-anchor investors will benefit from the lower fee, regardless of investment size.

Voting

“Yes” - Change protocol fee for the Cerchia pool to 7%.

“No” - Do not change, which would put at risk the feasibility of Cerchia launching on Goldfinch.

2 Likes
2

Makes sense in current market conditions and flexibility with regards to fees is generally a good thing. I also assume this will be backer-only pool so existing senior investors will not be affected retroactively. Correct me if I’m wrong

1 Like
3

My vote is strong “YES” as I’m happy to see a new investor capital incoming!

4

My vote is YES
New capital inflow is good!

5

Hi, yes, you are correct that this does not affect the senior pool or any other pools.

Justin

6

I vote “Yes”. Making small adjustments for such a big capital coming in to the pool is pretty good I guess.

7

A new investor capital is good! My vote is “YES”

8

I will gladly vote for this proposal!

9

I will support the vote in favor of the new capital

10

I’m definitely going to vote “Yes”

11

Sounds cool. My vote - YES

12

It is quite obvious that more flexible conditions should be provided to large investors.
As for the fee reduction precedent, decisions are made based on the current situation and current market conditions. And this should not create any difficulties further. In any case, it is possible to envisage some kind of “scale” of fee reduction. For example: 10M - 7%, 30M - 5%, etc.
I think that under present conditions the advantages greatly outweigh the disadvantages. Therefore, I vote “YES”.

13

Raising additional capital is necessary for the development of the protocol.
My vote - YES

14

Council has approved the proposal