Centrifuge Announces Lending Protocol for Real-World Assets on Ethereum Layer-2 Network
Centrifuge, a decentralized finance platform, is making waves in the industry with its latest announcement of establishing a lending protocol for real-world assets aimed at institutions on Base, an Ethereum layer-2 network developed by crypto exchange Coinbase.
In a Wednesday blog post, Centrifuge revealed its intentions to enable verified institutions to onboard RWAs and borrow against their RWA holdings. This move comes as part of the platform’s efforts to meet the growing demand from institutional clients for easier access to tokenization solutions on-chain.
Coinbase’s head of allocators and tokenization, Anthony Bassili, commented on the development, stating, “We continue to see significant interest from our institutional clients for easier access to tokenization solutions on-chain.”
The news of Centrifuge’s lending protocol for real-world assets coincided with the platform raising $15 million in venture capital investment in an “oversubscribed” fundraising round. ParaFi Capital and Greenfield led the investment, with participation from firms such as Arrington Capital, Circle Ventures, Gnosis, The Spartan Group, and Wintermute Ventures.
Following the announcement, CFG, the protocol’s native token, experienced a surge of up to 14% before moderating gains. Despite a slight pullback, the token remained up by 5% over the past 24 hours, outperforming the sector benchmark CoinDesk DeFi Index’s 1% decline during the same period.
This development comes at a time of intensifying competition in the RWA tokenization realm, as digital asset firms and global banks strive to migrate traditional financial products to blockchain infrastructure for enhanced efficiency, settlement speed, and transparency. Asset management firm 21.co projects the market for tokenized assets to reach $10 trillion by the end of the decade.
Centrifuge, known for bringing structured credit products to blockchain, has $270 million in active loans on the protocol, according to rwa.xyz data. Ben Forman from ParaFi Capital expressed confidence in institutional adoption of Centrifuge’s platform, highlighting the team’s leadership in real-world asset tokenization.
As the industry continues to evolve and innovate, Centrifuge’s latest developments are poised to make a significant impact on the decentralized finance space. Stay tuned for more updates on this exciting news.
