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Centrifuge, a decentralized finance platform, revealed its intentions in a Wednesday blog post to establish a lending protocol for real-world assets aimed at institutions on Base, an Ethereum layer-2 network developed by crypto exchange Coinbase.
According to the post, the protocol will enable verified institutions to onboard RWAs and borrow against their RWA holdings.
Anthony Bassili, Coinbase’s head of allocators and tokenization, remarked, “We continue to see significant interest from our institutional clients for easier access to tokenization solutions on-chain.”
This development coincides with Centrifuge’s announcement of raising $15 million in venture capital investment in an “oversubscribed” fundraising round. ParaFi Capital and Greenfield spearheaded the investment, with participation from multiple firms including Arrington Capital, Circle Ventures, Gnosis, The Spartan Group, and Wintermute Ventures.
Following the announcement, CFG, the protocol’s native token, surged by as much as 14% before moderating gains, as per CoinGecko data. Despite a slight pullback, the token remained up by 5% over the past 24 hours, surpassing the sector benchmark CoinDesk DeFi Index’s 1% decline during the same period.
This development occurs amid intensifying competition in the RWA tokenization realm, as digital asset firms and global banks endeavor to migrate traditional financial products like bonds and credit to blockchain infrastructure to enhance efficiency, settlement speed, and transparency. Asset management firm 21.co projected the market for tokenized assets to reach $10 trillion by the end of the decade.
Centrifuge specializes in bringing structured credit products to blockchain, with rwa.xyz data indicating $270 million in active loans on the protocol.
Ben Forman from ParaFi Capital expressed confidence in institutional adoption, stating, “The Centrifuge team is a leader in real-world asset tokenization, taking a deeply thoughtful approach to design decisions around legal, regulatory, and smart contract architecture.”
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