CoinClear

Centrifuge

6.8/10

OG real-world credit protocol powering MakerDAO's RWA vaults with structured on-chain finance.

Updated: February 16, 2026AI Model: claude-4-opusVersion 1

Overview

Centrifuge is one of the earliest and most established protocols for bringing real-world credit assets on-chain. Launched in 2017, it enables asset originators to tokenize invoices, trade receivables, real estate loans, and other credit instruments into on-chain pools funded by DeFi investors.

The protocol gained significant traction through its integration with MakerDAO, becoming a primary source of real-world collateral backing DAI. Its Tinlake protocol (now succeeded by the Centrifuge App) pioneered tranched structured finance on-chain — bringing Wall Street securitization mechanics to decentralized markets.

Centrifuge's longevity gives it credibility that newer entrants lack. The team has navigated multiple market cycles while building real credit infrastructure, long before "RWA" became a trending narrative.

Technology

Centrifuge's tech stack is notable for its depth and sophistication:

  • NFT-based assets: Each real-world asset is represented as a unique NFT with metadata (document hashes, valuations, maturity dates)
  • Tranched pools: Senior (DROP) and junior (TIN) tranches replicate traditional structured finance
  • Centrifuge Chain: Substrate-based parachain for asset origination and verification
  • Ethereum layer: DeFi composability and liquidity via the Centrifuge App
  • Epoch-based cycles: Automated investment/redemption with NAV calculations

Smart contracts are audited multiple times. The structured finance logic — waterfall payments, NAV calculations, tranche risk allocation — is more sophisticated than most DeFi protocols. Recent upgrades include improved pool creation, institutional reporting, and better integration with DeFi lending markets.

Asset Quality

Centrifuge pools contain diverse real-world credit:

  • Trade finance receivables
  • Real estate bridge loans
  • Revenue-based financing
  • Cargo and freight financing
  • SME lending

Quality varies by pool and originator — inherent to a platform model. The tranching mechanism protects senior holders (DROP) via junior tranche (TIN) first-loss absorption, but this only works with adequate junior sizing. Some pools have experienced defaults during market stress.

MakerDAO's RWA vaults sourced through Centrifuge have generally performed well, providing stable yield backed by diversified credit. The MakerDAO governance process adds an extra layer of originator due diligence. Asset diversity reduces concentration risk across the platform.

Compliance

Centrifuge takes a pragmatic approach rooted in traditional securitization frameworks:

  • Pool creation requires legal SPV structuring
  • Legal agreements mirror decades of TradFi securitization practice
  • KYC required for investors via third-party providers
  • Each pool has its own legal structure, operating agreement, and service provider
  • Cross-jurisdictional origination handled per-pool

Not as aggressively regulatory-forward as Ondo, but built on a solid legal foundation. The per-pool legal structure approach is more labor-intensive but provides clearer compliance per asset type and jurisdiction.

Adoption

Centrifuge has processed hundreds of millions in real-world credit. Key adoption facts:

  • MakerDAO integration is one of the most significant RWA-DeFi bridges in the ecosystem
  • Centrifuge RWA has been meaningful for MakerDAO's revenue diversification
  • Aave RWA market integration
  • Partnerships with institutional investors seeking on-chain credit exposure
  • Continued onboarding of new asset originators and asset types

Growth has been gradual, not explosive. The complexity of structured finance and per-pool legal setup limit mass-market appeal. Centrifuge is a workhorse protocol — appropriate for real credit risk. Institutional awareness has grown with the RWA narrative, and Centrifuge's established position advantages it in TradFi conversations.

Tokenomics

CFG serves as governance and utility token for Centrifuge Chain — transaction fees, staking, and governance. The value capture mechanism is weak:

  • Protocol fees are modest relative to token FDV
  • No direct revenue sharing with token holders
  • CFG has underperformed hype-driven RWA tokens
  • Standard foundation/team/investor allocation with vesting

For a protocol with genuine revenue and real usage, the tokenomics remain the weakest link. The market continues to reward narrative over substance.

Risk Factors

  • Credit risk: Real-world loans default. Several pools have experienced late payments and write-downs.
  • Complexity: Retail investors may not understand tranche risk, NAV mechanics, or originator quality.
  • Regulatory uncertainty: Regulatory classification changes could impact operations.
  • Originator dependence: Bad underwriting by originators directly hurts returns.
  • Token value capture: CFG lacks strong value accrual relative to protocol activity.
  • Liquidity: Pool tokens can be illiquid; epoch-based redemption means no instant access.
  • Platform risk: A high-profile default could impact confidence across all pools.

Conclusion

Centrifuge is one of the most genuine RWA protocols in crypto — it moves real credit assets on-chain and has done so since before RWA was a buzzword. The MakerDAO integration validates its approach, and the structured finance architecture is sophisticated. Inherent credit complexity and modest tokenomics keep it below Ondo's score, but it's a solid, honest project building real infrastructure in a space where many competitors offer press releases rather than products.

Sources