Before trading any crypto assets it is important to understand the risks. This overview summarizes certain risks associated with GFI.
No securities regulatory authority has expressed an opinion about GFI, including an opinion that GFI itself is not a security and/or derivative.
Token Description & Project Background
Goldfinch is a decentralized credit protocol that provides crypto-based loans to real world businesses.
The protocol includes four actors: Borrowers, Liquidity Providers, Backers who provide first-loss capital, and Auditors who assess the borrowers.
All liquidity deposited on Goldfinch is placed into one of several Borrower Pools that consist of both a senior and junior tranche. Liquidity providers supply funds to the senior tranche, while the platform’s decentralized network of ‘backers’ work to fund junior tranches.
Both backers and liquidity providers are granted a tokenized yield to compensate for the opportunity cost associated with locking up funds for an extended period of time.
According to, the Senior Pool distributes funds at a rate proportional to the number of backers supporting a given Borrower Pool. The more backers a Borrower Pool has, the more tokens that pool is allocated.
Like other tranche style frameworks, assets held within the junior tranche are considered first-loss capital, meaning backers are first in line to lose their capital should a borrower go awry. As compensation for this increased risk, backers are said to earn a higher yield relative to the liquidity providers that fund Goldfinch’s less-risky senior tranches.
All borrowers on the network must first be verified by Goldfinch’s network of auditors who work to assess the creditworthiness of each potential applicant. Borrowers are also tasked with proposing new borrower pools - and their conditions/terms (interest rate, payment period, late fee, etc.); however, it is ultimately up to backers/liquidity providers to supply the corresponding funds.
GFI is Goldfinch’s native token. It’s used to confer voting rights within the project’s community DAO, and works as a means of rewarding various stakeholders for operating on the platform.
Goldfinch was created in July of 2020 by co-founders Mike Sal and Blake West. Per, the pair originally met while working at Coinbase where Sal was employed as a product analyst and West a backend engineer.
Risks of GFI
Like an investment in other crypto assets, there are some general risks to investing in GFI. These include: (i) volatility risk and liquidity risk, (ii) short history risk, (iii) demand risk, (iv) forking risk, (v) code defects, (vi) regulatory risk, (vii) electronic trading risk, and (viii) cyber security risk. For additional information of these and other general risks associated with crypto assets and Uphold’s platform, please refer to thestatement.
In addition to these general risks, an investment in GFI is subject to the following specific risks:
- Any potential success associated with GFI depends on Goldfinch’s rate of adoption.
We emphasize that this Crypto Asset Statement is not an exhaustive description or summary of all risks associated with GFI. Investors should conduct their own research and perform their own assessment before trading any crypto asset to determine the appropriate level of risk for their personal circumstances.
The GFI community and Goldfinch DAO are not under any legal or regulatory obligation to disclose material information to the public regarding its activities. Holders of GFI have no recourse to the GFI community, Goldfinch DAO, or Uphold if GFI declines in value for any reason.
Changes to applicable law may adversely affect the use, transfer, exchange, or value of any of your crypto assets, and such changes may be sudden and without notice.
Uphold’s Evaluation Process
Prior to listing GFI on the Uphold Platform, Uphold performed due diligence on GFI and determined that GFI is unlikely to be a security or derivative under relevant securities legislation. Uphold’s analysis including reviewing publicly available information on the following:
- The creation, governance, usage, and design of GFI, including ensuring the source code is open-source, audited and peer reviewed, security, and roadmap for growth in the developer community.
- The supply, demand, maturity, utility, and liquidity of GFI.
- Any marketing materials put forward by the GFI social team including on, Twitter, Medium blog, LinkedIn posts, Discord and Telegram channels.
- Material technical risks associated with GFI, including any code defects, security breaches and other threats concerning GFI and its supporting blockchain (such as the susceptibility to hacking and impact of forking), or the practices and protocols that apply to them.
- Legal and regulatory risks associated with GFI, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of GFI.
Uphold has prepared this Crypto Asset Statement based on publicly available information. Although Uphold has taken steps to obtain information from apparently reliable sources, information contained in this Crypto Asset Statement may be inaccurate, incomplete or out-of-date. This overview is a starting point for you to perform your own research prior to investing in a crypto asset.
Uphold users should read thestatement for additional discussion of general risks associated with crypto assets made available through the Uphold platform.
Canadian residents, please note that Uphold has filed an application for registration in certain Canadian jurisdictions but has not yet obtained registration. Until such time as Uphold obtains registration, Uphold has agreed to abide by the terms of an undertaking available at the following. Please also review the for additional discussion of general risks associated with the crypto assets made available through Uphold Platform. Please be aware that statutory rights of action for damages or rescission in section 130.1 of the Securities Act (Ontario) and, if applicable, similar statutory rights under securities legislation in the other provinces and territories of Canada do not apply in respect of this Crypto Asset Statement or other disclosures on the Uphold website and statement.
Last updated on June 21, 2023.
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