What is Goldfinch (GFI)?
GFI is the native token of Goldfinch, which is a credit protocol that intends to loan cryptocurrencies to people without taking anything in return as collateral. Goldfinch understands the huge market for people who want to obtain cryptocurrency loans but are unable to give anything as collateral. The platform gives cryptocurrency loans without collateral by assessing the borrowers based on their credit scores.
Check out the Goldfinch price chart above to see the current GFI price.
There are four main participants in the Goldfinch protocol – Borrowers, Backers, Liquidity Providers, and Auditors. The presence of each of these participants is crucial in ensuring that the Goldfinch token is able to maintain its position in the cryptocurrency market.
If you are someone who seeks a cryptocurrency loan, you would be classified as a Borrower in the Goldfinch protocol. Borrowers are participants who are looking for someone to finance them. They would create a Borrower Pool with terms like the interest rate and repayment schedule.
In order for this system to work, there also has to be someone to finance these loans. Without them, the Goldfinch price can be negatively impacted. These people are called Backers, and they assess these Borrower Pools before deciding which pool deserves their capital investment.
The Goldfinch crypto also requires the support of Liquidity Providers. These people supply capital to the Senior Pool to earn passive yield. The capital from the Senior Pool is automatically allocated to the Borrower Pools on the basis of how many Backers are participating in them.
However, there can be many scammers who are trying to get a loan despite not being able to pay it back. In order to prevent this from happening, Auditors are assigned to check and approve Borrowers before they can request a crypto loan. In essence, Auditors guard the Goldfinch crypto project against fraudulent activity.
Use Cases of GFI Tokens
As mentioned before, the native token of Goldfinch is called GFI. The GFI price is directly proportional to the presence of each of the participants in the protocol. In essence, it has three main use cases:
- Governance. GFI token holders have the right to vote on various decisions concerning the future development of the Goldfinch crypto project.
- Incentives. GFI tokens are used to reward platform participants. For example, Liquidity Providers who supply liquidity to the Senior Pool are rewarded with GFI coins for their work.
- Grants and bounties. GFI tokens are used to provide grants and bounties to participants that meaningfully contribute to the Goldfinch ecosystem.
Apart from these, the developers of the project also plan to implement more use cases in the future.
Don't forget to check the aforementioned Goldfinch price chart. Knowing the main GFI price trends will help you to make better purchasing decisions.
