What is Centrifuge (CFG)?

Quick Facts

• Native token: CFG — governance and utility token
• Founded: 2018, with CFG token launched in 2020
• Core focus: Real-world asset (RWA) tokenization
• Migrated to Ethereum as a single ERC-20 token in March 2025
• Governance: Decentralized DAO structure
• Key integrations: Aave, MakerDAO, Morpho
• Annual inflation: 3%, accruing to the DAO treasury

Introduction

Centrifuge is a decentralized finance (DeFi) protocol built to bring real-world assets (RWAs) onto the blockchain. It allows businesses to tokenize tangible assets — such as invoices, private credit, real estate loans, and U.S. Treasuries — and use them as collateral or yield-generating instruments within DeFi ecosystems.

The protocol positions itself as essential infrastructure for the growing RWA economy, bridging the gap between traditional finance (TradFi) and the on-chain world.

History & Background

Centrifuge was founded in 2018 with a mission to make credit more accessible to businesses while offering DeFi investors stable, real-asset-backed yield. The CFG token launched in 2020, powering network governance and security.

Over the years, the protocol evolved from its original Substrate-based Centrifuge Chain — built using the same framework as Polkadot — to a fully Ethereum-native ERC-20 token in March 2025, streamlining its presence across the DeFi ecosystem.

How Centrifuge Works

Centrifuge allows asset originators — such as fintechs, asset managers, or businesses — to tokenize real-world assets as NFTs and pool them on-chain. Investors can then fund these pools, earning yield backed by real assets.

Its flagship application, Tinlake, introduced a senior/junior tranche structure, allowing investors to choose their preferred risk-reward profile. The protocol uses standardized token formats like ERC-4626 to ensure seamless DeFi compatibility. Cross-chain operations are supported via Wormhole's messaging infrastructure, enabling asset pools to be accessed across multiple blockchains.

Tokenomics

CFG is the native utility and governance token of the Centrifuge protocol. It serves several core functions:

• Governance: CFG holders vote on protocol parameters, treasury allocation, and strategic decisions via the Centrifuge DAO.
• Staking: Token holders can stake CFG to help secure the network and earn rewards.
• Transaction fees: CFG is used to pay fees on the Centrifuge network.

The protocol runs a 3% annual inflation model, with newly minted tokens directed to the DAO treasury to fund ecosystem initiatives and align long-term incentives.

Ecosystem & Use Cases

Centrifuge supports a wide variety of asset classes: trade receivables, real estate loans, royalties, corporate debt, and government treasury funds. Asset managers and DAOs can convert illiquid assets into on-chain tokens accessible to DeFi investors globally.

Strategic integrations with MakerDAO, Aave, and Morpho allow Centrifuge-tokenized assets to function as collateral within major DeFi protocols, significantly expanding liquidity for asset originators. The protocol has financed over $500 million in real-world assets since its launch.

Team, Governance & Community

Centrifuge operates under a DAO governance model, where CFG token holders guide the protocol's development, risk frameworks, and treasury management. The governance structure incorporates expertise from both DeFi and traditional finance professionals.

The community participates via on-chain proposals, making decisions ranging from fee structures to protocol upgrades, ensuring a decentralized and community-driven evolution.

Advantages

• Real-world yield: Investors access returns backed by tangible assets, not just crypto speculation.
• Asset-agnostic approach: Supports a broad range of asset types across multiple industries.
• DeFi composability: ERC-4626 and cross-chain design ensures broad integration with the DeFi stack.
• Institutional-grade infrastructure: Pre-built compliance modules (KYC, AML) reduce friction for institutions.
• DAO governance: Community steers development with direct on-chain voting.

Risks & Challenges

• Regulatory risk: Off-chain assets are subject to evolving financial regulations that may affect protocol operations.
• Borrower default risk: Asset pools are exposed to real-world credit risk if originators fail to repay.
• Complexity: Tokenizing real-world assets involves legal, compliance, and technical layers that add operational complexity.
• Market adoption: The pace of institutional RWA adoption remains uncertain despite growing interest.

Long-Term Vision

Centrifuge envisions becoming the core infrastructure layer for the on-chain real-world asset economy. As traditional finance explores tokenization at scale, Centrifuge aims to provide the open, compliant, and composable rails needed to connect trillions of dollars in real-world value with decentralized liquidity.

With ongoing development of tools like Centrifuge Prime and expanded multi-chain capabilities, the protocol is building toward a future where any real-world asset can seamlessly participate in the global DeFi ecosystem.