Authors: @mikesall @blakewest
Summary
After reviewing the current status of Goldfinch Prime, legacy borrower pool recoveries, ongoing operational requirements, and available resources, we believe the best path forward is to begin an orderly wind-down of Goldfinch Prime and to move Goldfinch into “maintenance mode” solely focused on supporting the collection of remaining legacy borrower payments.
This proposal recommends Goldfinch stop pursuing new protocol development and new growth initiatives. The remaining focus would be on:
- Supporting ongoing resolution of legacy borrower pools;
- Preserving access to the legacy Goldfinch app so users can continue to collect repayments and capital available to them; and
- Responsibly winding down Foundation operations and administrative obligations
As part of this plan, Warbler Labs would receive a fixed services payment of $150,000, consisting of $100,000 in new budget and $50,000 repurposed from previously approved operational budget. This would be for supporting the Goldfinch Prime and Foundation wind-down, transition work, and both technical and operational maintenance going forward for legacy borrow pool resolution over the next two or more years.
Motivation
Goldfinch has gone through multiple phases.
The original Goldfinch protocol enabled approximately $100M of loans. Over time, a number of borrower pools experienced serious performance issues, and significant work has been required to support recoveries, restructurings, communications, and related legal processes.
Goldfinch Prime was launched as a new iteration intended to move the ecosystem forward. Unfortunately, Goldfinch Prime has not achieved the level of adoption needed to justify continued investment in new product development, marketing, or operational expansion.
Given this reality, we believe the responsible course is to stop funding new growth initiatives and instead focus remaining resources on an orderly wind-down of Goldfinch Prime and on recovery of legacy borrower pools.
Goldfinch itself would be maintained solely for recovery and collection of the legacy borrower pools. The goal is to maintain the legal standing, resources, and infrastructure to continue pursuing recoveries on the legacy borrower pools, while preserving user access to the legacy Goldfinch app so users can collect any repayments or capital that may become available.
Specification and Requirements
The proposal would approve the following plan.
1. Move legacy borrower pool recoveries to a new U.S. trust entity
A new U.S. trust entity would be established with Ted Gavin, Goldfinch’s current Chief Restructuring Officer, appointed as trustee.
The Goldfinch Foundation would assign, transfer, convey, or otherwise delegate relevant recovery-related rights, claims, causes of action, records, authority, and resources to the trust, as advised by counsel, so that the trust can continue pursuing recoveries related to legacy borrower pools. As part of this transition, the remaining legal reserve budget would be transferred to the trust to continue funding ongoing recovery efforts.
The purpose of this structure is to improve legal continuity and longevity for recovery efforts. The trust would be able to continue recovery-related work for as long as the trustee determines it is practical and appropriate, and that work would not depend on the continuation of other Goldfinch activity.
2. Wind down Goldfinch Prime
Goldfinch Prime would stop pursuing new growth, new product development, and marketing campaigns. All existing Goldfinch Prime investors would be fully redeemed, and the Goldfinch Prime app would be shuttered responsibly.
3. Stop future protocol development
Goldfinch would not continue funding new protocol development, features, or business lines. The focus would shift to maintain enough infrastructure for users to access information and collect any remaining funds.
4. Maintain the Goldfinch app for user access
The legacy Goldfinch app would remain available so that users can continue to view relevant information and collect repayments, distributions, or remaining capital as applicable. Maintenance would include hosting, critical bug fixes, and other work necessary to preserve user access. The goal would be to maintain access to the legacy Goldfinch app for at least 6 months after the final expected legacy borrower payment.
5. Wind down Foundation operations
Following appropriate transfer or delegation of recovery-related rights and resources to the new U.S. trust, the Foundation would begin preparing for an orderly reduction and eventual wind-down of operations, subject to any legal, tax, regulatory, contractual, governance, or administrative requirements.
6. Budget
Warbler Labs has been deeply involved in providing services to Goldfinch since inception and has the historical, technical, and operational context needed to help execute an orderly transition.
This proposal would approve a fixed payment of $150,000 USDC to Warbler Labs for supporting the Goldfinch Prime and Foundation wind-down, transition work, and maintaining the legacy Goldfinch app over the next two or more years for borrower recovery and collection. $100,000 of this would be funded by the existing DAO treasury, and $50,000 of this would be repurposed from previously approved operational budget based on reduced expected costs from the other operational and marketing activities.
The expected scope of work will include:
- supporting wind-down of Goldfinch Prime;
- maintain the legacy Goldfinch app for continues user access;
- addressing critical technical issues;
- preserving relevant materials, repositories, credentials, domains, documentation, and infrastructure access as appropriate; and
- providing limited administrative and technical support during the wind-down period.
This would be a fixed wind-down services payment, not an open-ended development budget or commitment to continue building Goldfinch.
7. Existing approved budgets
This proposal does not modify any previously approved community management or market making budgets until August 2027, except for $50,000 of operational budget that would be repurposed to fund part of the wind-down services payment. So community management and market making will continue for as long as those pre-approved budgets allow.
Benefits
- Continues borrower recoveries: maintains legal standing and resources to continue pursuing recover of legacy borrower pools
- Preserves user access: users can continue to have access to the legacy Goldfinch app and collect any available capital
- Focused remaining resources on recoveries and obligations: Rather than spend on new product development or growth, remaining resources will be focused on legacy recoveries, required operations, and orderly administration
- Reduced ongoing burn: the community can reduce non-essential expenses
- Ensures continuity during the transaction: Warbler Labs has the historical and technical context to help maintain the app, support handoff works, and reduce the risk of a disorderly shutdown.
- Creates a durable recovery structure: The trust structure allows recovery efforts to continue even as broader Foundation and protocol operations are reduced.
Downside
- Goldfinch would no longer pursue growth: the would end the current effort to build and grow Goldfinch Prime
Voting
“Yes” - approve the wind-down process and budget
“No” - do not approve this plan