Centrifuge: In this article, we cover a detailed review of Centrifuge. How does Centrifuge work & Are important features?
Centrifuge is a decentralized asset financing protocol. It connects decentralized finance (DeFi) with real-world assets (RWA) while trying to lower the cost of capital for small and mid-size enterprises (SMEs) and provide investors with a stable source of income. The main goal of the project is to generate profits that are not tied to volatile crypto assets; the developers are pursuing the task of transferring real monetary value from fiat to cryptocurrencies.
Companies are using Centrifuge to access the liquidity that DeFi has to offer. They can tokenize real assets and use these tokens as collateral to access financing through Tinlake, a decentralized application (DApp) lending protocol. The Centrifuge blockchain is built on Polkadot (DOT) for speed and low fees, while its financial DApp Tinlake is built to access Ethereum (ETH) liquidity.
Centrifuge provides liquidity to everyone and investors receive income and rewards in the form of CFG tokens. Centrifuge links assets such as invoices, real estate and royalties with decentralized finance (DeFi). Additionally, borrowers benefit from the fact that they can finance their real assets without banks or other intermediaries.
The Centrifuge Point Table
|Circulating supply||360,263,043 CFG|
|Total Supply||430,011,123 CFG|
|Official Project Website||Click Here To Visit Project Website|
Centrifuge Price Live Data
Who Are the Founders of Centrifuge?
Centrifuge was launched in 2017 by Lucas Vogelsang and Martin Quensel. Lucas Vogelsang is the founding engineer at Centrifuge and holds the position of the company’s CEO. Vogelsang co-founded e-commerce startup DeinDeal in 2010.
After successfully selling DeinDeal to Ringier, he started working on another startup — KaufDA. Later, Vogelsang relocated to Silicon Valley to join Taulia as technical manager. In October 2017, he co-founded Centrifuge.
Martin Quensel is a co-founder at Centrifuge and its current COO. Prior to Centrifuge, he co-founded Taulia. Quensel began his career at SAP as a software developer and architect.
How it works
Finance your real-world assets by accessing affordable DeFi capital without banks or other intermediaries.
Gain access to a more diversified and stable junior and senior yield backed by productive assets from the real-world – invoices, real-estate, revenue-based financing, and more.
Become active in protocol governance to help shape the future of Centrifuge through active participation and voting.
What Makes Centrifuge (CFG) Unique?
The Centrifuge protocol tokenizes real-world assets by converting them to non-fungible tokens (NFTs). After that, they are funded through Tinlake. Tinlake is the first DApp built on the Centrifuge chain. It was created to access liquidity on Ethereum, while CFG has its own bridge to Ethereum.
The features of Centrifuge include integration with other DeFi protocols. This feature allows Centrifuge users to get liquidity without slowdowns and protects DeFi protocols from destabilizing events by adding uncorrelated collateral. As a result, the cumulative risks are reduced and predatory lending and banks are replaced by smart contracts.
As of June 2021, Centrifuge has the highest total value locked (TVL) on the Polkadot ecosystem. Moreover, the project claims to be among the first to launch a parachain on Polkadot. When the team designed the Centrifuge chain, operational speed and low fees were prioritized.
The platform for onchain credit
Obtain end-to-end transparency as the entire capital structure, securitization, and servicing of debt facilities is brought onchain — multi-tranching, NAV, privacy-first tokenization, securitization, reporting, and more.
Lower cost of capital
A decentralized infrastructure that compresses costs of traditional off-chain securitization and uses open-source services to reduce the intermediary costs and complexity of TradFi
Equal & open participation
Decentralized onchain governance provides equal, open access to all parties in the securitization process — new issuer proposals, underwriting, servicing, and more.
DeFi liquidity access
Leverage the entire capital stack by accessing senior and super senior capital from the leading DeFi stablecoin protocols.
Diversify stablecoin and treasury collateral with yield correlated to real-world assets, stabilizing long-term value and protocol health.
A protocol with legal recourse and strong regulatory and compliance requirements — KYC, sanctions screenings, accredited invester checks – as well as robust technical audits.
How Many Centrifuge (CFG) Coins Are There in Circulation?
CFG is the native token of the Centrifuge and it powers the entire network. There are three major use cases for CFG: staking, paying transaction fees and governance participation. The token is also used to reward the liquidity providers on Tinlake. As of June 2021, the total supply is 425,000,000 CFG, growing at a rate of 3% per year.
The total supply of CFG tokens are distributed as follows: 27% to core contributors, 17.1% to total backers, 7.3% to rewards and grants, 9.5% to the community sale, 11.8% to foundation endowment, 7.1% to community grants, 10.8% to development grants and 8.3% to the early ecosystem.
CFG sale took place on May 26, 2021, on Coinlist. The event was held in two stages and the supply of tokens was limited at 17 million for each round.
How Is the Centrifuge Network Secured?
Users pay transaction fees in CFG tokens and transaction aggregators on Polkadot receive a share of the fee for processing and storing data. These measures, as well as the NPoS (Nominated Proof-of-Stake) mechanism and the CFG rewards, encourage users to operate fairly and select data collators that provide censorship resistance.
Overall, most of the security comes from the Polkadot relay chain. The use of Polkadot’s protective mechanisms provides Centrifuge with a high level of security at a low cost.
In summary, Centrifuge emerges as a groundbreaking decentralized asset financing protocol, seamlessly merging the realms of DeFi and real-world assets (RWA). Its overarching mission centers on democratizing access to capital for SMEs by reducing capital costs and offering investors a dependable income source.
The project’s primary objective is to unshackle profitability from the unpredictable fluctuations of crypto assets, instead striving to facilitate the smooth transition of tangible monetary value from traditional fiat currencies to cryptocurrencies. In doing so, Centrifuge not only diversifies DeFi offerings but also fosters financial stability and inclusivity.
This initiative holds promise for reshaping financial ecosystems, forging a path toward a more inclusive, sustainable, and robust financial landscape. Centrifuge is poised to continue its evolution, pioneering innovative solutions in the realm of asset financing and DeFi.