> For the complete documentation index, see [llms.txt](https://docs.goldfinch.finance/launching-on-the-goldfinch-protocol/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.goldfinch.finance/launching-on-the-goldfinch-protocol/understanding-the-goldfinch-protocol/capital-providers.md).

# 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

**Liquidity Providers and the Senior Pool**

The Senior Pool is a ‘blind pool’ of capital that is diversified across all Borrower Pools on the Goldfinch protocol. This means that Liquidity Providers (LPs) who provide capital into the Senior Pool are passive capital providers in search of diversified exposure across all Borrowers, and do not want to take on individual Borrower risk.

**Backers and the Borrower Pools**

The Borrower Pools are pools specific to indidivual Borrowers on the protocol. They represent the credit lines from which Borrowers draw capital to funds their real-world lending. Each pool is created by the Borrower encoded with a set of deal terms (including pool size, interest rates, repayment schedule etc.) that match the loan that Borrower Pool represents.

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 staking USDC in the Borrower’s Pool. This process of ‘Backing’ signals to the protocol that the Borrower who owns the specific Borrower Pool is trustworthy. The more Backers who ‘Back’ the pool, the more trustworthy the protocol believes the Borrower to be.