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All investors on Goldfinch receive two core incentives for their participation in the protocol:
- USDC APY — The base-level USDC return an Investor receives for participating in Goldfinch, generated from Borrowers' interest payments on their loans. The USDC APY is defined in the Borrowers' financing terms when they establish Borrower Pools. For Backers, this APY is a fixed rate as defined by the Borrower Pool's terms. For Liquidity Providers, this rate is estimated as the Senior Pool's USDC returns vary based on the Senior Pool's usage and balance.
- Investor Rewards — The additional GFI return all Investors on Goldfinch receive in exchange for their participation in the protocol. Investor Rewards are an estimated return as they are not defined by Borrowers' financing terms, but are instead dependent on tokenomics and network dynamics.
Investor Rewards vary based on whether one is participating in Goldfinch as a Backer or as a Liquidity Provider. There are specific rewards to incentivize Backers for taking on the risk of providing the protocol's junior capital as well as for their work evaluating Borrower Pool deals, while Liquidity Providers can receive Investor Rewards by participating in Senior Pool Liquidity Mining. Read on for the breakdown of Backer Incentives and Senior Pool Liquidity Mining.