Deep Dive
1. Purpose & Value Proposition
Centrifuge connects traditional finance to DeFi by tokenizing real-world assets (RWAs) like invoices, trade receivables, and U.S. Treasuries. Businesses use these tokens as collateral to secure loans through platforms like Tinlake, a DeFi lending protocol. This reduces reliance on banks and offers investors stable yields uncorrelated to crypto volatility. Recent partnerships (e.g., Janus Henderson’s $1B tokenized CLO fund) highlight its role in institutional adoption of onchain finance (Centrifuge Docs).
2. Technology & Architecture
Originally built on Polkadot for scalability, Centrifuge transitioned to an Ethereum Virtual Machine (EVM)-compatible protocol in 2025. Its V3 upgrade supports multichain interoperability (Ethereum, Base, Avalanche) via Wormhole, enabling cross-chain asset management. The protocol uses ERC-7540 standards to ensure DeFi compatibility, allowing tokenized assets like Treasury bills (JTRSY) or S&P 500 funds to integrate seamlessly with Aave and other DeFi platforms (Centrifuge on X).
3. Tokenomics & Governance
CFG is the governance token, migrated to Ethereum as an ERC-20 asset in March 2025. Holders vote on protocol upgrades, fee structures, and treasury allocations. The total supply is capped at 675M CFG, with 3% annual inflation funding the DAO treasury. Legacy tokens (Substrate CFG and WCFG) are being phased out, with migration open until November 30, 2025 (Centrifuge Migration Guide).
Conclusion
Centrifuge is redefining asset management by merging institutional finance with DeFi’s efficiency, using multichain infrastructure to tokenize everything from invoices to stock indices. As the protocol expands, how will its open architecture balance regulatory compliance with decentralized innovation?