ARC: Add Goldfinch FIDU as collateral to Aave V2

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Puniaviision proposed accepting FIDU, the LP token to Goldfinch's Senior Pool, as collateral on Aave V2's Ethereum market, aiming to diversify Aave's collateral and generate a new DeFi financial product. Despite the risk profile, FIDU is deemed safe due to an economic buffer of ~40% and a proposed B+ Counter Party Risk score.

The discussion revolves around the proposal by Puniaviision to accept FIDU, the LP token to Goldfinch’s Senior Pool, as collateral on Aave V2’s Ethereum market. FIDU is an ERC20 token that represents a Liquidity Provider's position in the Senior Pool on Goldfinich, similar to the cUSDC token for depositing USDC into Compound. Goldfinch is a project that aims to revolutionize the global private debt market by allowing credit funds and FinTechs to access cost-efficient crypto loans. The protocol has deployed over $100M in loans with a 0% default rate since its launch in January 2021.

The key benefits for Aave include diversifying the collateral within Aave’s V2 Ethereum market, generating a new type of financial product in DeFi through Aave, and massive demand from current and future FIDU holders. The Goldfinch Senior Pool, through FIDU, provides the safest and most diversified way by which Aave can onboard real-world assets. The price of FIDU increases as repayments come into the Senior Pool, which is protected on-chain by 20% of junior capital and off-chain by an additional 20% by the borrower, creating an economic buffer of 40%.

The discussion also touched on the risk profile of FIDU, with Puniaviision arguing that the current metric, which uses the number of holders as a measure of decentralization, is not suitable for FIDU as it is not a governance token. They suggested a B+ as a more accurate Counter Party Risk score. They also mentioned that the market risk is acceptable and that FIDU is protected by an economic buffer of 40%. The discussion ended with Puniaviision agreeing to discuss the RWA Market with Khan over Telegram and promising to keep the community updated on the chainlink oracle.

Posted a year ago

Last reply a year ago

Summary updated 2 months ago

Last updated 04/12 15:05