FiduPrice

(FIDU)

FIDU and GFI serve distinct roles within the Goldfinch ecosystem. FIDU is a liquidity provider token received when depositing USDC into the protocol's Senior Pool; it represents a share of the loan portfolio and accrues interest. In contrast, GFI is the protocol’s governance token. GFI is used for voting on protocol updates, staking by auditors to secure the network, and providing community incentives or boosted rewards. While FIDU is an investment vehicle for private credit, GFI serves as the utility and management layer of the protocol.

FIDU is not a traditional pegged stablecoin. It is an interest-bearing token representing a claim on the capital in the Senior Pool. Its exchange rate relative to USDC is designed to increase over time as borrowers pay interest on their real-world loans. This rate reflects the growth of the pool’s total assets. Unlike a stablecoin meant to stay at a fixed value, FIDU’s value grows as interest accrues, though it can be adjusted downward if there are loan defaults within the portfolio.

Holders of FIDU earn yield through two primary channels. First, they receive organic yield generated from the interest payments made by real-world businesses borrowing from the protocol. Second, users can earn additional rewards by staking their FIDU in the protocol’s staking contracts to receive GFI tokens. Newer updates also allow users to lock tokens to receive vote-escrowed FIDU (veFIDU), which grants higher governance weight and boosted rewards within the protocol's stability pool.

Because the protocol facilitates loans to off-chain companies, defaults are a risk. If a borrower fails to repay, the protocol may execute a 'write-down,' reducing the total value of assets in the Senior Pool. This causes the FIDU exchange rate to decrease. However, FIDU holders are protected by the protocol's tranche structure. FIDU represents the 'Senior Pool,' which is the first to be repaid and is cushioned by 'Backers' in the junior tranche who absorb the first losses in the event of a default.

To mint FIDU directly through the protocol's main platform, users generally must pass a 'Unique Entity Check,' which involves a Know Your Customer (KYC) process to comply with regulatory standards for real-world credit. While FIDU can sometimes be acquired on secondary decentralized markets without direct protocol-level KYC, certain platform-specific features, such as redeeming FIDU for USDC directly through the official dApp, typically require a verified identity to ensure legal compliance.

Users can exit their position by redeeming FIDU for USDC through the official protocol, which typically incurs a small 0.5% withdrawal fee. However, redemption depends on available liquidity in the Senior Pool. If most capital is currently lent out, users may need to wait for borrower repayments to replenish the pool. Alternatively, users can sell their FIDU on secondary decentralized exchanges for immediate liquidity, though this may result in a discount compared to the protocol's official exchange rate if market liquidity is low.