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Goldfinch's Capital Providers

There are two types of capital providers on the Goldfinch protocol. They are:
  • ​Liquidity Providers who supply capital into the Senior Pool, and
  • ​Backers who supply capital into individual Borrower Pools.
You can learn more about these roles in the Protocol Mechanics sections of the documentation.
At a high level:
  • The Senior Pool is a ‘blind pool’ of second-loss capital that is diversified across Borrower Pools on the Goldfinch protocol. This means that Liquidity Providers (LPs) who provide capital into the Senior Pool are capital providers in search of diversified exposure across all Borrowers, and do not want to take on individual Borrower risk.
  • In contrast to LPs, Backers are active capital providers. They carry out in-depth due diligence on individual Borrowers, and ultimately ‘Back’ these Borrowers by investing first-loss USDC in the Borrower’s Pool. The more Backers who ‘Back’ the pool, the more trustworthy the protocol believes the Borrower to be.