Centrifuge is the name of a lending and borrowing decentralized finance platform aiming to bring real-world assets into the DeFi sector. Originally launched on Ethereum, the project transitioned to its own blockchain, the Centrifuge Chain, and the team plans to eventually connect to the Polkadot Relay Chain as a parachain. Centrifuge's native token takes the ticker symbol CFG on exchanges. It serves as a means to pay network transaction fees, to incentivize participation and to provide governance functions to the Centrifuge ecosystem.

Centrifuge's mission is to extend fair access to capital markets to medium and small businesses while providing more stable yield-generation opportunities for investors. The ecosystem's first product is called Tinlake, which is a smart contract-based marketplace of asset pools. Tokenized representations of real-world assets in the form of nonfungible tokens serve as collateral in Tinlake's asset pools. Users providing these NFTs can then borrow against their value at much more competitive rates than are typical in the traditional financial industry.

The Centrifuge Chain uses a nominated proof-of-stake consensus mechanism and was built using Parity Substrate. It was designed specifically to handle only the tokenized documents linked to its users' real-world assets. As such, it offers faster, more private and lower-cost transactions than many contemporary blockchain networks.

CFG price and tokenomics

At Centrifuge's launch, 400 million CFG tokens were created. According to the project's documentation, the network mints around 3% of its current supply annually. However, Centrifuge's community governance mechanism may elect to reduce this or stop it entirely, meaning supply inflation may only temporarily influence CFG price.

Creating demand for CFG tokens is its use in the Centrifuge Chain's consensus mechanism to pay transaction fees and its role in the protocol's governance process. The project's documentation also mentions planned token burns. However, the eventual rate will be determined by governance, making it difficult to assess the extent to which future supply contractions will impact the CFG price.

About the founders

Centrifuge was co-founded by Lucas Vogelsang, Markus Ament, Martin Quensel and Philip Stehlik in 2017. Previously, Vogelsang co-founded and served as head of product and CTO of the Swiss e-commerce company DeinDeal. Meanwhile, Stehlik and Quensel founded the San Francisco-based supplier-financing firm Taulia. Finally, Centrifuge's current CEO, Markus Ament, is an experienced fintech entrepreneur.

As of July 2021, Centrifuge has attracted investments totaling around $11.8 million over four funding rounds. Notable backers of the project include Galaxy Digital, the FinTech Collective, Rockaway Capital and Semantic Ventures.