Centrifuge (CFG) is a pioneering project in the realm of Real-World Asset (RWA) tokenization. It bridges the gap between traditional finance and Decentralized Finance (DeFi) by enabling businesses to access capital more efficiently and providing DeFi investors with a stable income stream amidst the volatility of the crypto market. This article delves into the core functionalities, tokenomics, and potential of the Centrifuge protocol.
Table Content:
- Connecting Real-World Assets to DeFi: How Centrifuge Works
- Exploring CFG Tokenomics: Allocation, Distribution, and Utility
- Key Metrics
- Token Allocation and Sales
- Token Release Schedule and Use Cases
- Centrifuge Roadmap and Future Developments
- Team, Investors, and Partners: The Driving Force Behind Centrifuge
- Team
- Investors
- Partners
Connecting Real-World Assets to DeFi: How Centrifuge Works
Centrifuge facilitates the tokenization of real-world assets, such as invoices, real estate, and royalties, into Non-Fungible Tokens (NFTs) on its blockchain. These NFTs can then be used as collateral in DeFi protocols like MakerDAO and Aave, unlocking liquidity for businesses and generating yield for investors.
A key component of the Centrifuge ecosystem is Tinlake, its flagship decentralized application (dApp). Tinlake serves as the primary platform for originating and managing these asset-backed NFTs. This process significantly reduces the traditional barriers to financing for small and medium-sized enterprises (SMEs) while providing DeFi users with exposure to a diversified portfolio of real-world assets.
The recent approval by MakerDAO to utilize RWA tokenized by Tinlake as collateral underscores the growing recognition of Centrifuge’s potential to tap into the multi-trillion dollar RWA market, a largely unexplored territory for DeFi.
Exploring CFG Tokenomics: Allocation, Distribution, and Utility
Key Metrics
- Token Name: CFG Token
- Ticker: CFG
- Blockchain: Centrifuge Chain
- Token Standard: Updating…
- Contract: Updating…
- Token Type: Governance
- Total Supply: 425,000,000 CFG
- Circulating Supply: Updating…
Token Allocation and Sales
Centrifuge has conducted two successful funding rounds: a Seed round in 2018 raising $8 million and a SAFT round in 2020 securing $4.3 million from prominent investors like Fenbushi Capital, Galaxy Digital, and IOSG Ventures. A past token sale was conducted on Coinlist.
Token Release Schedule and Use Cases
The majority of CFG tokens are subject to long-term vesting schedules to ensure commitment and stability. Core contributors and early backers have a monthly vesting schedule over one year, starting from July 2021. The core team’s tokens are locked for 48 months with a 12-month vesting period.
A 3% annual inflation rate is implemented to reward network participants through Proof-of-Stake (PoS) block rewards, DOT lock rewards for Parachain slot auctions, and liquidity incentives. However, transaction fees are burned, creating a deflationary pressure that aims to stabilize the total CFG supply over time.
CFG tokens are essential for:
- Securing the Centrifuge Chain: Users can stake CFG to become validators or delegators.
- Earning Rewards: CFG holders receive rewards for participating in network security and liquidity provision.
- Governance: CFG holders can participate in on-chain governance through voting and proposal submissions.
Centrifuge Roadmap and Future Developments
While Centrifuge hasn’t published a concrete roadmap, their blog posts indicate a strong focus on:
- Ecosystem Expansion: Broadening RWA adoption across various liquidity pools, including integrations with protocols like Aave.
- RWA Market Growth: Collaborating with non-crypto partners to onboard more real-world assets and increase the Total Value Locked (TVL).
- Polkadot Integration: Preparing for Parachain launch on the Polkadot network.
Team, Investors, and Partners: The Driving Force Behind Centrifuge
Team
Centrifuge boasts a team with extensive experience from leading organizations such as Consensys, Electric Coin Company, Parity Technologies, as well as traditional financial institutions like Goldman Sachs and Credit Suisse.
Investors
Partners
Centrifuge has secured investments from prominent venture capital firms, including HashKey Capital, Moonwhale Ventures, and BlueYard Capital. The project has established strategic partnerships with key players in the blockchain space, including Polkadot, Celo, Chainlink, and Ledger. These collaborations demonstrate a commitment to building a robust and interconnected ecosystem for RWA tokenization.
