As a follow up to GRC-02: A Blueprint For Goldfinch, this proposal puts forth the specific changes related to fees as part of the blueprint. Those changes are:
- New underwriting and AUM fee capabilities
- New fee switches, which are initially set to zero
- Change the interest fee for new pools from 10% → 0%.
See GRC-02: A Blueprint For Goldfinch, where the reasoning is laid out in detail.
As shared in the post linked above, in order to encourage many lending businesses to build on Goldfinch, we are suggesting that the community replace the interest fee with an underwriting fee and AUM fee that the lending businesses can control. As part of this, we should also add protocol fee switches, initially set to zero, as a percentage of that underwriting fee and AUM fee.
- New underwriting fee and AUM fee options: Create new underwriting and AUM fee capabilities that the lending business controls, and that accrues to the lending business (not to the protocol treasury).
- The underwriting fee capability would mean that at time of drawdown, the underwriter can set and take a fee (eg. 1%).
- The AUM fee capabilities would mean that the lending business could periodically charge a fee as a percent of the loan principal (e.g. 2% annualized fee).
- New fee switches: Create protocol fee switches for both the underwriting and AUM fees, initially set to zero, that directs a percentage of the lending business’s underwriting or AUM fees to the treasury protocol. This fee would apply to new loans originations from the point it’s turned on or changed. It would not affect existing loans.
- Change interest fee: For new pools and loans (not existing ones), change the protocol interest fee from 10% to 0%. To be clear, this would leave the protocol continuing to earn roughly $80-120k / mo. over the next couple years as the Senior Pool loans keep maturing.
- This will allow the community to bootstrap growth. It’s investing in the long term growth of the protocol by essentially making it free for lending businesses to build on it. It also adds a fee switch that allows the community to introduce fees later on after the protocol has established network effects.
- It will reduce the fees accruing to the protocol treasury for now. However, current fees are limited with recent stagnant growth, and we believe the most important thing for the protocol is to increase traction for the protocol.
“Yes” - Create the new fee capabilities. Add the fee switches, and set interest fee for new pools to be 0%.
“No” - Do nothing.