What is Centrifuge (CFG)? A Simple Guide to DeFi and Real World Assets

Centrifuge is a crypto project that bridges real-world assets (RWAs) with decentralized lending. The platform allows asset managers to tokenize various assets on-chain and enables investors to earn yield from collateralized tokenized assets.

If the working process of this project seems confusing, you’ve come to the right place. This article breaks down the Centrifuge project and how it works. It also discusses the project’s native token and its use cases.

What is Centrifuge and How Does it Work?

Founded in 2017, Centrifuge is a decentralized finance (DeFi) project that takes decentralized lending to another level. It allows users and small businesses to access capital using real-world assets like carbon credits, consumer finance, real estate, United States treasury bills, and more.

Imagine being able to secure loans by depositing real-world assets as collateral. This is precisely what Centrifuge brings to reality. The platform comprises three major entities – Asset Originators, Issuers, and Investors.

Asset originators, whom we can call the borrowers, pledge real-world assets to a Centrifuge pool to secure a loan. These assets are automatically converted into non-fungible tokens (NFTs) with equal value to the actual asset and locked in the pool.

Issuers are responsible for holding the assets deposited by asset originators and managing the pool.

Investors, whom we can call the lenders, lock their stablecoins in the pool to earn yield. Asset originators can take from these locked cryptocurrencies as loans based on the values of their deposited assets and pay interest. It is worth noting that different assets hold varying fees.

The DeFi protocol is built on the Centrifuge blockchain, a layer-1 network developed using the Polkadot SDK. Since December 2023, the project has been available on the Ethereum mainnet and layer-2 solutions like Arbitrum, Base, and Celo. Users can access Centrifuge on supported blockchains by investing in liquidity pools deployed on these networks.

Centrifuge’s services are accessible through its native app, which was launched in May 2023. The app is built on experiences with the protocol’s previous app, Tinlake, which recorded $387 million in assets financed. The DeFi protocol’s new app boasted a more user-friendly interface that users would find helpful. Users must undergo the Know Your Customer (KYC) procedure to use the app.

Other services available on Centrifuge include the RWA Launchpad, deRWA tokens, and fund management.

Use Cases of CFG Token

Centrifuge’s native token, CFG, is the platform’s lifeblood. It serves as a utility and governance token within the ecosystem.

The DeFi project mandates users to pay CFG to cover transaction fees and mint NFTs. Token holders can also stake their CFG holdings to earn yield and secure the network. The Centrifuge DAO also adopts CFG for governance purposes.

Centrifuge DAO is the project’s decentralized autonomous organization where token holders converge to decide on matters involving the project’s growth. The DAO supports off-chain and on-chain voting. Off-chain voting occurs on the platform’s OpenSquare interface, allowing community members to deliberate on proposals before taking them on-chain. Hence, if a proposal is not substantial enough to go on-chain, it will end in the off-chain governance layer.

CFG’s Migration

Since its inception, CFG has lived on the Centrifuge blockchain. However, after a proposal garnered attention, the digital asset migrated to the Ethereum network on May 20, 2025. This means that the native CFG token and the wrapped CFG used across supported chains must be switched to the new token. The project’s team gave until November 30, 2025, to complete the migration.

The migration is accessible through the Centrifuge app. The token maintained a 1:1 swap ratio, implying that holders of the old CFG or wCFG will redeem the exact amount in the new digital asset. Its total supply is capped at 675 million tokens, indicating an additional 115 million tokens from its initial supply. The Centrifuge Foundation, a non-profit organization developing the tokenization protocol, will hold the extra tokens for incentive purposes.

The move helps to make CFG fully compatible with the Ethereum Virtual Machine (EVM). The project’s team added that they will discontinue using the Centrifuge Chain in the final quarter of 2025. The project will shift to an EVM-enabled protocol, Centrifuge V3. Notably, this will take the project’s activities from the Polkadot ecosystem to Ethereum’s.

Ahead of the migration, CFG’s market price surged, indicating investors’ interest in the move. Two weeks before the migration occurred, it surged by over 50%. However, the hype did not reflect on the new CFG’s value. A few hours after the migration began, it sold for $0.2079, representing a mild 2% decrease.

Where to Buy CFG Tokens

CFG is accessible across various crypto exchanges. Here is a list of centralized and decentralized platforms where you can buy Centrifuge tokens:

Centralized platforms:

• Coinbase
• Kraken
• KuCoin
• Gate
• Bitvavo

Decentralized platforms:

• Uniswap
• PancakeSwap
• SushiSwap

Conclusion

Centrifuge is a DeFi platform that has capitalized on its years-long existence and sustainable business operations to cement its presence in the RWA tokenization market.

This article discussed the protocol’s working principle and top services. It also spotlighted its native token, CFG, and how it migrated from the Centrifuge blockchain to Ethereum. Using information from this article and the project’s website, you can perform due diligence when deciding whether to invest in the tokenization platform.

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