Centrifuge (CFG)

Centrifuge (CFG): The infrastructure layer for tokenized funds and real-world assets

Centrifuge provides pools, vaults, share tokens and cross-chain accounting for onchain financial products. CFG is the ecosystem token, but the platform’s practical operation depends heavily on pool managers, valuation processes, permissions and messaging infrastructure.

What Centrifuge does

Centrifuge is an open-source protocol for creating and distributing tokenized financial products across multiple blockchain networks. Its target users are asset managers, issuers and financial applications that need onchain representations of funds, credit strategies, treasuries or other structured products. The protocol supplies the smart-contract infrastructure, while the economic terms and operating responsibilities of each product remain tied to its manager and underlying assets.

The main unit is a pool. A pool represents a financial product’s onchain balance sheet and defines its share classes, investor access, pricing, orders and liquidity rules. A token issued by a pool represents a claim associated with a particular share class; it is not automatically the same thing as CFG. This distinction matters because Centrifuge products can issue their own share tokens while CFG serves the broader ecosystem.

How the hub-and-spoke architecture works

Each pool uses a hub-and-spoke structure. The hub is the control and accounting center chosen when the pool is launched. It handles roles, pricing, accounting and order processing. Spoke networks are where investors interact with local token deployments and vaults. Cross-chain messaging keeps the product’s deployments coordinated, allowing one pool to present a unified balance sheet, supply and price across supported networks.

The architecture separates token deployment from investment access. Deploying a share token makes it available to hold or transfer on a network, while deploying a vault creates an entry and exit path for investors. A single share class can have several vaults, each accepting a different asset or operating on a different chain, while the pool consolidates those positions into one accounting structure.

Vaults, pricing and investor flows

Centrifuge supports instant and request-based vaults. An instant vault can issue shares when an investor deposits, although redemptions still use a request process. A request-based vault uses an asynchronous lifecycle for both deposits and redemptions: the investor submits an order, the manager processes it according to the product’s terms, and the investor later claims the resulting assets or shares. This model is suited to products whose underlying assets are illiquid or valued periodically.

Share prices and asset prices are managed through the pool’s hub and propagated to the networks where the product operates. For a deposit, the accepted asset is valued in the pool’s denomination and converted into shares; redemption reverses that process. Prices can have maximum ages, meaning an operation may fail to settle if the required valuation is stale. The result is programmable accounting, but not an automatic guarantee that an offchain asset’s valuation or legal claim is correct.

Where CFG fits

CFG is the native ecosystem token and is currently issued as an Ethereum ERC-20 token. The project’s documentation identifies the Ethereum contract as 0xcccCCCcCCC33D538DBC2EE4fEab0a7A1FF4e8A94. In March 2025, proposal CP149 established a migration that consolidated legacy CFG and Wrapped CFG into the current Ethereum-native token at a 1:1 ratio. The documented migration and later review periods are closed, so holders of legacy assets should not assume that an exchange path remains available.

CFG’s clearest documented role is governance and ecosystem alignment rather than representing ownership of a particular tokenized fund. The token documentation also describes a 3% annual inflation rate based on total supply, with inflationary tokens accruing to the Centrifuge Treasury. That supply policy is subject to governance or governance-related changes, so CFG holders must distinguish the token’s broad ecosystem role from the cash flows, redemption rights and risks of individual Centrifuge pools.

Governance and operational control

Centrifuge governance has changed from an active DAO model. Under CP171, approved by CFG holders on November 3, 2025, active DAO governance was paused and execution shifted to supervision by the Centrifuge Network Foundation. The documentation says CFG holders retain a route to reactivate the DAO through a defined proposal, discussion and Snapshot process. This gives CFG holders a potential control mechanism, but day-to-day execution currently depends more heavily on the foundation structure and its service providers than the earlier governance model implied.

At the pool level, control is deliberately role-based. A hub manager can configure share classes, pricing, permissions, vaults, accounting and cross-chain adapters. Separate balance-sheet and request-manager roles handle asset movement and investor orders. The protocol recommends multisignature or institutional-grade controls for important roles, and its own documentation states that a compromised hub manager can set arbitrary prices, settle requests and reconfigure cross-chain security. These permissions are practical operating dependencies, not minor administrative details.

Code, dependencies and limitations

The current protocol code is publicly maintained in the Centrifuge GitHub repository and is primarily written in Solidity. The repository describes the system as an open infrastructure layer for tokenized asset management and documents a Business Source License 1.1 for the main codebase, with specified GPL exceptions. The protocol also depends on external general message-passing systems, price inputs, pool operators, custody or on/off-ramp arrangements and the legal enforceability of claims on offchain assets.

Centrifuge’s design can reduce the amount of bespoke infrastructure needed to launch a tokenized product, but it does not remove the hardest real-world risks. A permissioned share token may restrict transfers without proving that an asset is accurately valued. A cross-chain message may be delivered correctly while the underlying redemption process remains slow. Likewise, onchain accounting can make records transparent without making the borrower, issuer, custodian or legal structure solvent.

Key takeaways

• Centrifuge is infrastructure for launching and operating tokenized financial products, not a single tokenized fund.
• Pools hold the product logic; share tokens represent pool-specific claims, while CFG serves the wider ecosystem.
• The hub-and-spoke model centralizes accounting and control at a hub while distributing investor access across spoke networks.
• Vaults can process deposits instantly or asynchronously, but redemptions remain request-based.
• CFG is an Ethereum ERC-20 governance and ecosystem token with documented treasury inflation, not a direct claim on every Centrifuge pool.
• Current execution is supervised by the Centrifuge Network Foundation after active DAO governance was paused under CP171.

Risks and open questions

• Pool-level administrators can control pricing, permissions, settlement and cross-chain configuration; key compromise or poor operational governance could harm investors.
• Tokenized asset value depends on offchain issuers, custodians, valuation methods, legal enforceability and redemption liquidity.
• Cross-chain operations depend on message-passing adapters and configuration choices made by each pool.
• Request-based redemptions can be delayed when managers, liquidity or offchain settlement processes do not perform as expected.
• CFG supply is inflationary under the documented 3% annual policy, and future governance or foundation decisions may alter its role or economics.
• The 2025–2026 migration to the Ethereum-native CFG token is documented as closed, creating an operational risk for holders of legacy CFG or WCFG.