Centrifuge (CFG): Bridging Real-World Assets to DeFi

In traditional finance, accessing liquidity often involves intermediaries, lengthy processes, and high costs. Enter Centrifuge (CFG)—a decentralized protocol that bridges real-world assets (RWAs) like invoices, real estate, and loans to decentralized finance (DeFi). By tokenizing these assets, Centrifuge enables businesses to unlock liquidity without relying on traditional banks. At the heart of this ecosystem is the CFG token, which serves as the governance and utility token, empowering holders to influence protocol decisions and participate in staking. With its innovative approach, Centrifuge is redefining the intersection of real-world finance and blockchain technology. Let’s explore how Centrifuge operates, its tokenomics, and the impact it’s making in the DeFi space.

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What is a Centrifuge?

Centrifuge is a decentralized protocol designed to bridge real-world assets with decentralized finance (DeFi). By tokenizing assets such as invoices, real estate, loans, and royalties, Centrifuge enables businesses to access financing in a transparent, trustless, and scalable way. This approach not only unlocks liquidity for traditional assets but also allows DeFi investors to diversify into real-world collateralized assets.

Core Components of Centrifuge

Centrifuge combines a high-performance blockchain, decentralized applications, and a growing ecosystem to create seamless access to asset-backed financing.

• Centrifuge Chain – Built on Polkadot, the Centrifuge Chain ensures scalability, interoperability, and high throughput for asset tokenization. Its blockchain infrastructure supports secure, trustless management of real-world assets while maintaining compatibility with other DeFi protocols.
• Tinlake – Tinlake is a decentralized application (DApp) that facilitates the creation of asset-backed pools. Businesses can pool tokenized assets such as invoices or loans, and investors can participate in these pools to earn yield. Tinlake connects real-world assets to DeFi liquidity in a way that is transparent and automated.
• Ecosystem – Centrifuge supports a wide range of asset types, including invoices, mortgages, royalties, and more. By accommodating diverse collateral types, the protocol enables businesses from multiple sectors to access financing and DeFi investors to gain exposure to new asset classes.

How Centrifuge Bridges Real-World Assets and DeFi

Centrifuge tokenizes tangible assets, creating a transparent and tradable representation of real-world value on-chain.

Businesses can tokenize invoices, loans, or other receivables, which are then pooled and financed through decentralized platforms like Tinlake. Investors can fund these pools, earning returns based on the underlying assets’ performance. This process allows:

• Businesses – To unlock liquidity without relying on traditional banks, improve cash flow, and financing options.
• DeFi Investors – To access yield opportunities backed by real-world assets, diversifying their portfolios beyond purely crypto-native assets.
• Transparency and Security – Smart contracts govern the pools, ensuring automated execution and reducing counterparty risk.

By connecting these worlds, Centrifuge expands the utility of DeFi while providing tangible value to businesses.

Use Cases of Centrifuge

The protocol supports a wide range of applications across industries by tokenizing diverse asset types.

• Invoice Financing – Businesses can tokenize unpaid invoices and raise liquidity in DeFi pools.
• Real Estate – Mortgages and property-backed loans can be fractionalized and financed via Tinlake.
• Royalties and IP – Artists and creators can tokenize future royalties or intellectual property for immediate liquidity.
• Loans & Other Assets – Loans, receivables, and other financial instruments can be tokenized and integrated into DeFi, expanding access to capital.

These applications illustrate how Centrifuge enhances both financial inclusion and DeFi innovation, bridging the gap between real-world value and decentralized markets.

Centrifuge is revolutionizing DeFi by enabling real-world assets to participate in decentralized finance, unlocking liquidity, and diversifying investment opportunities.

By combining the Centrifuge Chain, Tinlake DApp, and a growing ecosystem of tokenized assets, the protocol creates a scalable and transparent framework for businesses and investors. Whether it’s invoices, mortgages, or royalties, Centrifuge allows traditional assets to interact seamlessly with DeFi, bridging the gap between conventional finance and blockchain innovation.

The Role of the CFG Token

The CFG token is the native utility and governance token of the Centrifuge Network. It plays a central role in securing the network, facilitating transactions, and enabling decentralized decision-making. As Centrifuge continues to expand and migrate toward Ethereum compatibility, CFG remains a key instrument for participation in both governance and the network’s DeFi ecosystem.

Governance with CFG

CFG token holders have a direct voice in the evolution of Centrifuge through on-chain governance.

Governance is a core utility of CFG, allowing token holders to:

• Vote on Protocol Upgrades – Holders can approve or reject upgrades to the Centrifuge Chain, Tinlake DApp, and related protocols.
• Shape Network Policies – Decisions on staking rewards, fees, or asset types supported are determined by CFG holders.
• Propose Changes – Active community members can submit proposals, ensuring that governance reflects the priorities of network participants.

This governance model ensures that CFG holders directly influence the network’s trajectory, creating a decentralized, community-driven framework for growth and innovation.

Utility of CFG Tokens

Beyond governance, CFG tokens are used to facilitate transactions, staking, and network operations.

• Transaction Fees – CFG is used to pay for transaction fees within the Centrifuge network, providing a consistent method of compensating validators and maintaining network operations.
• Staking – Token holders can stake CFG to help secure the network and earn rewards. Staking ensures that validators have a vested interest in the network’s integrity and encourages active participation in securing asset-backed pools.
• Network Incentives – CFG acts as a utility token that aligns participant incentives, rewarding those who contribute to the network’s security and operational efficiency.

By combining governance and utility, CFG maintains its central role in network functionality and ecosystem engagement.

Migration to Ethereum

As of mid-March 2025, CFG is transitioning from the legacy Centrifuge Chain to Ethereum, consolidating into a single EVM-compatible token.

This migration offers several benefits:

• EVM Compatibility – Developers and users can now interact with CFG on Ethereum-based platforms, expanding interoperability and liquidity.
• Streamlined Tokenomics – Consolidating CFG into a single Ethereum token simplifies governance, staking, and transaction processes.
• Increased Accessibility – Ethereum integration allows DeFi participants to easily access CFG and Tinlake pools, attracting a broader user base.

The migration is a major step in aligning Centrifuge with broader DeFi standards, improving usability and network growth.

The CFG token is the backbone of the Centrifuge ecosystem, driving governance, network security, and utility across DeFi applications.

Through on-chain governance, staking, transaction facilitation, and Ethereum migration, CFG enables token holders to actively participate in the network’s development and operation. As Centrifuge continues to bridge real-world assets with decentralized finance, CFG ensures that the community remains at the center of decisions, security, and growth. By combining governance and utility in a single token, CFG reinforces Centrifuge’s mission to make asset-backed DeFi accessible, secure, and scalable.

How Centrifuge Tokenizes Real-World Assets

Centrifuge provides a decentralized protocol that enables businesses to bring real-world assets into the world of decentralized finance (DeFi). By tokenizing assets such as invoices, mortgages, and real estate, Centrifuge creates a bridge between traditional finance and blockchain-based liquidity, opening new opportunities for both businesses and investors.

Asset Tokenization

Tokenization converts tangible assets into digital representations on the blockchain, enabling fractional ownership and liquidity.

Centrifuge allows businesses to tokenize real-world assets by creating non-fungible tokens (NFTs) that represent specific items like invoices, loans, or property rights. Each NFT is:

• Unique – Represents a specific asset with verifiable ownership and associated metadata.
• Tradable – Can be pooled or sold to investors, providing liquidity without transferring ownership of the underlying asset.
• Secure and Transparent – Smart contracts ensure that asset details, ownership, and transactions are auditable on-chain.

This process transforms illiquid or traditionally slow-to-trade assets into digital tokens that can interact seamlessly with DeFi protocols.

Collateralization for Liquidity

Tokenized assets can be used as collateral, enabling businesses to access liquidity without traditional intermediaries.

Once assets are tokenized, they can be deposited into asset-backed pools via Centrifuge’s Tinlake DApp. These tokenized assets serve as collateral for loans or financing, allowing businesses to:

• Raise Capital Quickly – Unlock liquidity against invoices, real estate, or other receivables.
• Maintain Ownership – Businesses retain control of the underlying asset while using its tokenized representation for financing.
• Reduce Counterparty Risk – Smart contracts manage collateral and repayments in a transparent, automated way.

Collateralization allows businesses to efficiently convert real-world value into usable capital within the DeFi ecosystem, streamlining access to funds.

DeFi Integration

Tokenized assets from Centrifuge can participate in broader DeFi applications, expanding financial opportunities for both businesses and investors.

• Investment Pools – Investors can fund pools backed by tokenized assets, earning yield based on real-world asset performance.
• Lending & Borrowing – Tokenized assets can be used as collateral to borrow other cryptocurrencies or stablecoins, integrating seamlessly with existing DeFi platforms.
• Diversification – Investors gain exposure to new asset classes like invoices, royalties, and property, adding stability and variety to their DeFi portfolios.

By integrating real-world assets into DeFi, Centrifuge creates a liquidity bridge that connects traditional finance with blockchain innovation, benefiting both sides of the market.

Centrifuge enables the tokenization of real-world assets, providing businesses with new liquidity options and investors with unique opportunities in DeFi.

Through the creation of NFTs representing tangible assets, collateralization in asset-backed pools, and integration with DeFi protocols, Centrifuge transforms how traditional assets interact with decentralized finance. By bridging these two worlds, Centrifuge not only unlocks liquidity for businesses but also opens diverse investment opportunities, driving adoption and innovation across the blockchain and DeFi ecosystem.

Use Cases and Real-World Applications of Centrifuge

Centrifuge bridges the gap between real-world assets and decentralized finance (DeFi), enabling businesses and investors to unlock liquidity and access new opportunities. By tokenizing tangible assets, Centrifuge allows participants to engage in financing, investment, and trading in ways that were previously limited by traditional financial systems.

Supply Chain Financing

Tokenizing invoices allows businesses to access immediate liquidity and streamline cash flow.

Businesses often face delays in receiving payment for invoices, impacting working capital and operations. With Centrifuge:

• Invoice Tokenization – Invoices are converted into non-fungible tokens (NFTs) that represent the payment claim.
• Immediate Financing – These tokenized invoices can be pooled and financed through DeFi platforms like Tinlake, providing instant liquidity.
• Investor Participation – DeFi investors can fund invoice pools, earning yield while supporting businesses’ operational needs.

This process reduces reliance on traditional banks, accelerates cash flow, and increases efficiency in supply chain financing.

Real Estate

Tokenization of property assets allows fractional ownership and easier transferability.

Real estate investments are typically illiquid and require significant capital. Centrifuge enables:

• Fractional Ownership – Properties can be divided into tokenized shares, lowering the barrier to entry for investors.
• Liquidity – Tokenized property assets can be traded or used as collateral in DeFi pools, creating a dynamic market for real estate.
• Simplified Transfers – Smart contracts automate ownership records and transactions, reducing administrative overhead and friction.

This application makes real estate investing more accessible while integrating it into the decentralized financial ecosystem.

Intellectual Property (IP)

Tokenizing royalties and other IP rights unlocks liquidity and monetization opportunities.

Creators and rights holders can leverage Centrifuge to:

• Tokenize Royalties – Future royalty streams can be represented as NFTs, which can be sold or financed in DeFi pools.
• Access Capital – Rights holders can receive upfront liquidity against expected future earnings, improving cash flow and operational flexibility.
• Expand Investor Access – Tokenization allows a broader set of investors to participate in IP-backed financing opportunities.

This approach transforms how intellectual property is financed and traded, giving creators new avenues for capital.

Art and Collectibles

Tokenizing valuable assets democratizes investment opportunities and enhances liquidity. High-value collectibles and artworks often remain inaccessible to most investors. With Centrifuge:

• Fractionalized Ownership – Collectibles can be divided into tokenized shares, allowing more people to invest.
• Secure Verification – NFTs ensure the authenticity and provenance of the underlying asset.
• DeFi Integration – Tokenized art and collectibles can be used in DeFi lending, trading, or pooling mechanisms, creating new investment dynamics.

This enables broader participation in the art and collectibles market while maintaining security and transparency.

Centrifuge enables diverse real-world assets to participate in decentralized finance, unlocking liquidity, access, and efficiency. From supply chain invoices to real estate, intellectual property, and art, Centrifuge empowers businesses and investors to tokenize tangible assets and integrate them into DeFi. By bridging traditional finance with blockchain innovation, Centrifuge expands opportunities for financing, investment, and asset utilization, making the ecosystem more accessible, efficient, and inclusive.

Tokenomics and Distribution of CFG

The CFG token is the native utility and governance token of the Centrifuge Network. Understanding its tokenomics and distribution is crucial for participants, investors, and developers, as it directly influences network security, governance, and ecosystem growth. CFG is designed to balance incentives across stakeholders while promoting the adoption of tokenized real-world assets and DeFi applications.

Total Supply and Stakeholder Distribution

CFG tokens are allocated across multiple stakeholder groups to support network development, incentives, and community participation. The total supply of CFG is structured to ensure fair distribution and sustainable growth. Key allocations include:

• Team and Advisors – A portion of CFG is allocated to the core team and advisors, incentivizing long-term commitment and contributions to network development.
• Investors and Backers – Early investors and backers receive tokens under structured agreements, aligning network success with their support.
• Community and Ecosystem Incentives – Tokens are reserved for staking rewards, liquidity incentives, grants, and community programs, fostering adoption and ecosystem participation.
• Operational Reserves – A portion of CFG is retained to support future network expansion, partnerships, and unforeseen operational needs.

This allocation strategy ensures that all stakeholders—developers, investors, and users—have a vested interest in the network’s long-term success.

Vesting Schedule

Vesting periods are implemented to ensure long-term alignment between stakeholders and the network.

• Team and Advisors – CFG allocated to the team and advisors typically vests over several years, with gradual release schedules to incentivize sustained contributions.
• Early Investors – Investor tokens may have cliff periods and incremental vesting to prevent sudden market dilution.
• Community and Staking Rewards – Rewards for network participation are released according to emission schedules, promoting consistent engagement and network security.

By implementing vesting schedules, Centrifuge ensures that token holders remain committed to the project’s development and ecosystem growth over time.

Emission Model

The CFG emission model governs how tokens are released into circulation, balancing incentives, inflation, and adoption.

• Staking Rewards – CFG tokens are distributed to participants who stake and secure the network, providing incentives for validators and delegators.
• Network Growth Incentives – Tokens are allocated to support DeFi pools, asset tokenization, and user participation, driving adoption of Centrifuge applications like Tinlake.
• Controlled Inflation – Emissions are structured to maintain network stability while avoiding excessive dilution, ensuring that token value aligns with network usage and adoption metrics.

This emission model supports sustainable growth by rewarding contributions, encouraging participation, and maintaining economic alignment across the network.

The tokenomics and distribution of CFG are designed to align stakeholder incentives, ensure network security, and drive ecosystem growth. Through careful allocation, structured vesting schedules, and a balanced emission model, CFG incentivizes developers, investors, and users to actively participate in the Centrifuge Network. By linking token utility with governance, staking, and ecosystem adoption, CFG underpins the network’s ability to tokenize real-world assets, integrate with DeFi, and foster a sustainable, community-driven blockchain ecosystem.

Centrifuge (CFG) is at the forefront of integrating real-world assets into the decentralized finance ecosystem. By enabling businesses to tokenize assets like invoices, real estate, and loans, Centrifuge unlocks liquidity and financing options that were previously inaccessible. The CFG token plays a crucial role in governance and utility within the network, empowering holders to shape the protocol’s future. As Centrifuge continues to expand its ecosystem through strategic partnerships and developer support, it is poised to redefine the landscape of decentralized finance. For businesses seeking innovative financing solutions and investors looking for stable yield opportunities, Centrifuge offers a promising platform to explore.