Odaily Planet Daily News Cryptocurrency lending platform Goldfinch recently suffered its third default. Those affected by the loss asked Goldfinch to use the protocol's $107 million reserve to compensate users. Borrower Lend East had previously obtained a loan worth $10.15 million through the support of Goldfinch users. According to a message released on April 1 local time, Warbler Labs, the company behind the Goldfinch protocol, announced that Lend East could only repay about $4.25 million in loans and said it expected Lend East to be unable to repay the remaining $5.9 million when the loan expired on April 3. Warbler Labs is hiring external legal counsel to explore all rights and remedies available to the community to maximize recovery. The Lend East incident is the third default suffered by Goldfinch protocol users since it began operations in January 2021. Critics say repeated defaults highlight the difficulty of underwriting loans for emerging markets and expose serious problems with the Goldfinch protocol model. Goldfinch users said that the initial credit assessment of Lend East loans was "poorly implemented," and that neither Goldfinch nor Lend East had provided backers with updates on the loans in the past year. Goldfinch does not conduct credit assessments on loans itself, but relies on a decentralized audit panel to approve borrowers for protocol consideration, according to reports. Supporters of Lend East loans accused auditors of doing a poor job in the initial credit assessment of the loans. User felix2545 posted in Goldfinch's Discord channel: "The initial Goldfinch credit assessment was poorly implemented, or the assessor was improperly selected, which ultimately led to multiple defaults on multiple loans." (DL News) Earlier in October 2023, a report from the Goldfinch governance platform stated that a $20 million lending pool on its platform had bad debts and an estimated loss of $7 million. The lending pool provided a four-year loan of 20 million USDC to the fintech credit fund Stratos in February 2022, and secured it at an annual interest rate of 11%. Warbler Labs was the underwriter. Stratos' investment in a real estate technology company REZI and digital assets "did not meet expectations", and Warbler Labs said it would compensate all losses of investors in the lending pool.