Goldfinch is a decentralized credit protocol built on Ethereum that distinguishes itself by extending crypto lending to real-world borrowers, particularly in emerging markets. Unlike traditional DeFi lending platforms that require over-collateralization with crypto assets, Goldfinch enables under-collateralized loans to off-chain businesses, bridging the gap between DeFi and traditional finance.

The protocol employs a novel trust-through-consensus mechanism where backers perform due diligence on borrower pools, while passive liquidity providers supply capital through the senior pool. This dual-tier structure creates an interesting risk distribution model. The GFI token provides governance rights and staking incentives.

Strengths include a genuinely innovative approach to real-world asset (RWA) lending, strong backing from notable investors like a16z, and meaningful real-world impact in underserved credit markets. However, concerns persist around credit default risk from under-collateralized loans, limited transparency into off-chain borrower performance, and regulatory uncertainty surrounding tokenized lending to real-world entities. The protocol has experienced some loan defaults, highlighting the inherent risks of this model. Overall, Goldfinch represents an ambitious and important experiment in expanding DeFi's utility beyond crypto-native use cases.