This article provides a brief comparison between Goldfinch, Aave and Compound lending protocols in some major aspects.
DeFi lending and borrowing have become a breakthrough in crypto world. Compound and Aave both provide well-developed solutions for lending out cryptocurrency and earning interest.
When it comes to comparing Aave and Compound, an argument can be made that Aave has surpassed Compound in terms of innovation and execution. Aave provides a greater variety of cryptocurrency assets, and offers unique products such as Flash Loans.
The Goldfinch is building a decentralized credit platform that empowers financial inclusion. In Goldfinch, a new feature is implemented — it doesn’t require collateral from a company to borrow. Instead, it puts it’s reputation on the table and if it doesn’t provide payments, Backers can proceed in the real world to return the loan. In Goldfinch, there are Backers and Auditors who assess the borrower and decided wether to give a loan or not. Nor AAVE or Compound provide such service.
Token and rates
The only currency available now in Goldfinch is USDC while other protocols offer a wide variety of tokens. But since Goldfinch provides no collateral, there is no liquidation in this protocol. Also, lending and borrowing rates are fixed.
Unlike Aave and Compound, which are already accessable on Ethereum, Polygon, Avalanche, Goldfinch is not cross-chain. However, adding more blockchain may be possible in future.
Aave and Compound provide services for individuals as well as for institutional investors with Aave Arc and Compound Treasury. Goldfinch now aims only for individuals to give loans to companies, so it would be a logical to add institutional support.
The core differences we described, are summed up in the next table.
Unlike other DeFi lending protocols, Goldfinch provides a bridge between the real world and crypto world. That’s what makes it unique. The project is at it’s beginnig and by implementing new features, such as more assets and cross-chain, it can become a major player in DeFi space.