DeFi Weekly: Centrifuge — The Protocol That Brought Real-World Assets On-Chain
How tokenized finance infrastructure and institutional partnerships created a bridge between traditional assets and DeFi
For years, DeFi operated in a world of purely crypto-native assets. Users could lend stablecoins, borrow against ETH, and trade synthetic assets, but the trillion-dollar world of real-world assets — invoices, mortgages, real estate, commodities — remained locked outside the blockchain ecosystem.
In 2017, Lucas Vogelsang, Martin Quensel, and their co-founders at Centrifuge envisioned a different future: What if companies could tokenize their real-world assets and access DeFi liquidity directly? What if investors could earn stable yields backed by tangible assets instead of relying solely on volatile crypto collateral?
Centrifuge launched as one of the first protocols to bring real-world assets (RWA) on-chain, building infrastructure that allows asset originators to tokenize everything from structured credit to real estate, US treasuries to carbon credits. With over $500 million in assets financed and partnerships spanning from MakerDAO to institutional asset managers, Centrifuge has demonstrated that the bridge between traditional finance and DeFi represents the next major phase of blockchain adoption.
This is the story of how Centrifuge created the infrastructure for tokenized real-world assets and opened DeFi to institutional capital.
The Visionaries: From Supply Chain to Asset Tokenization
The Founding Team
Centrifuge was founded in 2017 by four co-founders — Lucas Vogelsang, Martin Quensel, Maex Ament, and Philip Stehlik — who combined enterprise software expertise with financial infrastructure knowledge⁹’¹⁰.
Lucas Vogelsang, the CEO and founding engineer, co-founded e-commerce startup DeinDeal in 2010, which he sold to Ringier before starting KaufDA. He later joined Taulia as technical manager in Silicon Valley, gaining deep experience in supply chain finance before co-founding Centrifuge in October 2017⁹.
Martin Quensel serves as COO and co-founder, bringing experience from co-founding Taulia and working at SAP as a software developer and architect⁹. Maex Ament serves as CEO while Philip Stehlik holds the position of CTO¹⁰.
The Genesis Vision
The team’s background in supply chain finance informed their understanding of a critical market gap. Small and mid-size enterprises (SMEs) face high costs of capital and limited access to liquidity, while DeFi offered a new source of capital that remained disconnected from real-world business needs⁹.
Centrifuge set out to solve this by creating infrastructure that would allow companies to tokenize their real-world assets and use them as collateral to access DeFi liquidity⁶. The vision was to build an operating system connecting the global financial supply chain while allowing participants to maintain ownership of their data¹⁰.
The Genesis: Tokenizing the Real World
The Challenge
By 2017, DeFi operated entirely with crypto-native assets. While this created powerful new financial primitives, it meant DeFi remained disconnected from the trillions of dollars in real-world assets that drive the global economy.
Small and mid-size enterprises struggled to access affordable capital through traditional lenders who required extensive intermediation and charged high interest rates. Meanwhile, DeFi offered abundant liquidity but lacked infrastructure to accept real-world collateral or assess credit risk for non-crypto assets⁹.
Investors faced similar limitations. DeFi yields came primarily from volatile crypto assets, creating risk exposure that many traditional investors found unacceptable.
The Centrifuge Solution
Centrifuge’s approach was methodical: create a protocol that could tokenize real-world assets as non-fungible tokens (NFTs), structure them into asset pools, and connect those pools to DeFi liquidity sources⁹’¹⁰.
Asset originators could tokenize real-world assets by minting NFTs that represent verified, legally-binding claims⁶’¹⁰. These tokenized assets could be pooled together and structured with different risk tranches, allowing investors to choose their preferred risk-return profile¹⁰. The protocol would provide legal and technical infrastructure to ensure investors had actual recourse to underlying assets⁶.
Centrifuge positioned itself as asset-class agnostic, building infrastructure for diverse asset types including structured credit, real estate, US treasuries, carbon credits, and consumer finance⁶.
The Technical Architecture
Tinlake: The Real-World Asset Marketplace
Centrifuge’s flagship application, Tinlake, launched as an open marketplace for tokenized real-world assets⁵’¹⁰. Companies can tokenize assets by minting NFTs that represent invoices, real estate, or other financial instruments². These NFTs contain verified information about the underlying asset and its value.
Tinlake introduced a two-tranche investment model. The DROP tranche offered more stable, predictable returns with lower risk, similar to senior debt¹⁰. The TIN tranche provided higher potential returns but absorbed first losses, functioning like junior debt. This structure made pools accessible to investors with varying risk tolerances.
The Centrifuge P2P Network enabled companies to sign and send financial documents privately while maintaining verifiability², addressing concerns about exposing sensitive financial information on public blockchains.
Centrifuge Chain and Altair
Recognizing limitations of general-purpose blockchains, Centrifuge developed its own Substrate-based chain optimized for asset financing⁶. The Centrifuge Chain provides specialized transaction types for asset tokenization, lower transaction costs than Ethereum, and native privacy-preserving features.
Centrifuge expanded by launching Altair, a parachain on Kusama that serves as a testing environment¹¹. Altair allows feature testing in production before deploying to the main Centrifuge Chain, balancing innovation with security requirements.
Centrifuge V3: Multichain Asset Tokenization
The Wormhole Partnership
In April 2025, Centrifuge launched V3 in partnership with Wormhole, a multichain messaging protocol⁷’⁸. This marked a shift from single-chain to full multichain support.
V3 delivers full chain abstraction and a unified interface for fund administration across multiple blockchains⁸. Fund managers and investors can manage tokenized assets across different chains using a single interface.
The rollout began with a $230 million fund from Anemoy, a web3-native asset manager⁷’⁸. This represented one of the largest tokenized fund launches in DeFi history and validated market demand for professional-grade multichain asset management.
By leveraging Wormhole’s messaging infrastructure, Centrifuge now offers interoperability across blockchain ecosystems. Asset pools created on one chain can be accessed from others, addressing liquidity fragmentation and improving capital efficiency.
The CFG Token and Governance
Token Economics
The CFG token, launched in 2020, serves as Centrifuge’s native utility and governance token⁴. With a total supply of 680 million tokens and approximately 565 million in circulation, CFG enables governance rights over protocol parameters, features, and strategic decisions⁴.
The decentralized autonomous organization (DAO) structure allows the community to guide protocol development while incorporating expertise from finance professionals⁶. This balanced approach recognizes that tokenizing real-world assets requires both community input and specialized knowledge.
Incentives and Rewards
Centrifuge implemented token rewards to incentivize early adoption and bootstrap liquidity¹³. Early investors and asset originators received CFG tokens for locking capital, with earliest participants receiving the highest rewards. This incentive structure helped overcome the cold-start problem by aligning both sides of the marketplace.
Current Performance and Market Position
Growth and Adoption
Centrifuge has financed over $500 million in real-world assets since launch, supporting pools across multiple asset classes from invoices to real estate and US treasuries.
The protocol’s expansion to layer-2 networks through V3 has accelerated growth. Testnet launches on Arbitrum and Base signal Centrifuge’s commitment to meeting liquidity across the DeFi ecosystem⁸.
Institutional Partnerships
The Web3 Foundation’s decision to deploy part of its treasury into real-world assets on Centrifuge represents significant validation⁷. The Anemoy partnership for the $230 million Janus Henderson Treasury Fund demonstrates that institutional asset managers see Centrifuge as credible infrastructure⁷’⁸.
Strategic integration with MakerDAO brought additional credibility, enabling MakerDAO to back DAI issuance with tokenized real-world assets through Centrifuge¹⁰. Centrifuge has raised $27.1 million in funding to support protocol development⁹.
Technical Innovations That Matter
Asset-Class Agnostic Architecture
Centrifuge created infrastructure flexible enough to support diverse asset types while maintaining consistent security and legal frameworks⁶. The protocol defines standard interfaces for asset verification, valuation, and collateralization that adapt to different asset classes while ensuring consistent investor protections.
Legal Recourse and Investor Protection
Centrifuge focuses on providing actual legal recourse for investors⁶. Unlike purely on-chain protocols, Centrifuge asset pools maintain legal connections to real-world assets that can be enforced through traditional legal systems, providing the backstop that gives institutional investors confidence.
Privacy-Preserving Verification
The Centrifuge P2P Network enables businesses to maintain privacy over sensitive financial information while providing necessary verification to investors². Companies can prove assets exist and meet criteria without exposing all details of their business operations.
Challenges and Risk Management
Despite its achievements, Centrifuge faces several challenges inherent in bridging traditional finance and DeFi. Legal and regulatory complexity presents the most fundamental challenge, as tokenizing real-world assets requires navigating securities law, property rights, bankruptcy procedures, and financial regulations that vary by jurisdiction. While Centrifuge has taken a thoughtful approach, regulatory frameworks for tokenized assets remain under development in most jurisdictions, and changes could impact protocol operations.
Credit risk assessment presents another ongoing challenge. Traditional financial institutions have sophisticated systems for evaluating creditworthiness backed by decades of data. Bringing these capabilities on-chain requires either recreating that infrastructure or integrating with existing systems. The protocol must balance transparency with the reality that some credit decisions rely on subjective judgment and non-public information.
Asset verification and valuation create technical and operational challenges. Real-world assets require external verification of their existence, ownership, and value, introducing oracle dependencies and requiring trusted parties to attest to asset characteristics. While Centrifuge has implemented verification systems, the need for off-chain information creates potential points of failure.
The protocol faces the cold-start problem common to marketplace platforms. Asset originators need liquidity to make tokenization worthwhile, but investors need diverse, high-quality assets to deploy capital. Building both sides simultaneously requires careful incentive design and significant business development efforts.
Cross-chain complexity introduced by V3 creates additional technical and security considerations. While multichain support improves liquidity access, it multiplies potential attack vectors and increases dependency on external bridge infrastructure. The partnership with Wormhole provides battle-tested messaging, but multichain protocols face inherent complexity in maintaining security across multiple environments.
Lessons from Centrifuge’s Approach
Centrifuge’s journey offers important lessons for builders in the tokenization space. The decision to build purpose-specific infrastructure rather than simply deploying on general-purpose chains proved strategically valuable. By creating the Centrifuge Chain optimized for asset tokenization, the team could implement features that would have been difficult on existing platforms, illustrating the importance of matching technical architecture to specific use cases.
Centrifuge’s focus on legal soundness from the beginning distinguished it from purely experimental approaches. By ensuring tokenized assets maintain legal enforceability and providing actual investor recourse, the protocol built credibility with institutional participants, demonstrating that successful tokenization requires legal infrastructure alongside technical infrastructure.
The team’s patient approach to building both sides of the marketplace shows the value of long-term thinking. Rather than rushing to scale before establishing product-market fit, Centrifuge methodically built relationships with asset originators, developed investor confidence through successful pools, and expanded capabilities based on real market feedback.
The V3 upgrade’s multichain strategy illustrates how protocols must adapt to where liquidity and users actually exist. While building a purpose-specific chain provided technical advantages, recognizing that most DeFi activity happens on other chains led to multichain expansion, representing mature protocol thinking that balances ideals with market reality.
Perhaps most importantly, Centrifuge’s development demonstrates that successful real-world asset tokenization requires bridging multiple worlds — technical, legal, financial, and regulatory. Teams that understand only blockchain technology or only traditional finance will struggle to build infrastructure that works in both domains. The protocol’s success stems partly from its founding team’s diverse expertise across these different areas.
The Future: Scaling Tokenized Finance
Regulatory Clarity
As regulatory frameworks for tokenized assets develop globally, Centrifuge is positioned to benefit from increased clarity. The protocol’s focus on legal soundness and investor protections aligns with regulatory priorities in major jurisdictions. Clear regulations could significantly accelerate institutional adoption.
Expanding Asset Classes
Centrifuge’s asset-agnostic architecture enables continued expansion into new asset categories. Current pools span structured credit, real estate, treasuries, and carbon credits, but the infrastructure can support virtually any tokenizable asset class. Future development could extend to more complex financial products built on tokenized assets.
Integration with Traditional Finance
The V3 upgrade’s multichain capabilities and institutional partnerships suggest Centrifuge is positioning itself as infrastructure that traditional financial institutions can adopt. The $230 million Anemoy fund launch demonstrates that professional asset managers see value in managing tokenized assets on-chain, potentially representing the beginning of broader institutional migration.
Getting Started with Centrifuge
For Asset Originators
Companies with real-world assets can use Centrifuge to tokenize those assets and access DeFi liquidity. The process involves working with the team to structure asset pools, establish legal frameworks, and create investment opportunities. Asset originators configure pools with parameters suited to their assets, including interest rates, terms, and risk tranches.
For Investors
Investors can explore available asset pools across different asset classes, each with distinct risk-return profiles. Within pools, investors can select between DROP (senior) and TIN (junior) tranches based on their risk tolerance. Centrifuge provides transparency into pool performance, repayment rates, and asset quality.
For Developers and Protocols
Developers can use Centrifuge infrastructure to create applications for tokenized real-world assets. Protocols looking to incorporate RWAs can integrate with Centrifuge pools, enabling lending protocols and yield aggregators to offer RWA exposure.
Risk Considerations
Credit Risk: Asset pools carry credit risk from underlying borrowers who may default on obligations.
Legal and Regulatory Risk: The regulatory landscape for tokenized assets remains under development, and changes could impact protocol operations.
Smart Contract Risk: Smart contract vulnerabilities could lead to loss of funds despite security audits.
Liquidity Risk: Some asset pools may have limited liquidity, making quick exits difficult.
Oracle and Verification Risk: The protocol depends on accurate information about real-world assets provided by oracles and verification services.
The Bottom Line
Centrifuge began with an ambitious vision: connect real-world assets to DeFi liquidity through infrastructure that respects both blockchain technology and traditional finance requirements. What started as supply chain finance tokenization has become one of the leading platforms for bringing real-world assets on-chain.
The protocol demonstrated that institutional participants will engage with DeFi when offered familiar structures, legal protections, and professional-grade infrastructure. From initial launches on Tinlake to multichain capabilities in V3, Centrifuge has consistently focused on building infrastructure rather than chasing short-term trends.
The challenges Centrifuge faces — regulatory complexity, credit risk assessment, market education — are inherent in bridging traditional finance and DeFi. But the protocol’s ability to navigate these challenges while financing over $500 million in assets demonstrates that real-world asset tokenization has moved from experiment to operational reality.
As DeFi continues to mature, the ability to incorporate real-world assets becomes increasingly important for scaling beyond crypto-native users and capital. Centrifuge’s infrastructure provides a foundation for this expansion, enabling protocols to accept diverse collateral, investors to access stable yields, and businesses to tap into global liquidity.
Next week in DeFi Weekly: We’ll explore Maple Finance, the protocol that created institutional capital markets in DeFi through undercollateralized lending and professional credit management.
Have questions about Centrifuge? Want to share your experience with real-world asset tokenization? Drop a comment below.
References
Gemini — “Centrifuge: Tokenization of Real-World Assets”Centrifuge Documentation — “Welcome to Centrifuge”Centrifuge — “Infrastructure for Tokenized Financial Products”CoinMarketCap — “Centrifuge price today, CFG to USD live price, marketcap and chart”Kraken — “What is Centrifuge? | CFG Token”Blockworks — “Centrifuge to meet demand for Real World Assets with liquidity pools” (September 2023)CoinDesk — “Centrifuge Taps Wormhole to Launch Multichain Tokenization Platform” (April 2025)Centrifuge Mirror — “Centrifuge and Wormhole Launch Multichain Asset Tokenization Platform”Tracxn — “Centrifuge — 2025 Company Profile, Team, Funding & Competitors”Crunchbase — “Centrifuge — Company Profile & Funding”Medium — “Announcing Altair: Centrifuge’s Kusama Parachain” (January 2022)Coinlive — “Centrifuge token — cfg price”Medium — “Start Earning CFG: Liquidity Mining for Tinlake”Medium — “Short About: Centrifuge & Altair” (January 2022)Knowledge for Policy — “Centrifuge” EU Commission
Additional Sources
Centrifuge Official DocumentationCentrifuge GitHub RepositoriesTinlake dApp DocumentationSubstrate DocumentationReal-World Asset Research Papers
About the Author Ferdi is a DeFi researcher and Technical Writer with 11 years of engineering experience, specializing in blockchain architecture and DeFi protocols. He combines deep technical expertise with product strategy to demystify complex systems for builders and users alike. Follow for weekly technical deep dives into the protocols reshaping global finance.
DeFi Weekly: Centrifuge — The Protocol That Brought Real-World Assets On-Chain was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.