Centrifuge, a decentralized finance platform, has announced its plans to establish a lending protocol for real-world assets on Base, an Ethereum layer-2 network developed by Coinbase. The protocol aims to cater to institutions, allowing them to onboard and borrow against their RWA holdings.
According to Anthony Bassili, Coinbase’s head of allocators and tokenization, there is a significant interest from institutional clients for easier access to tokenization solutions on-chain.
This announcement comes after Centrifuge’s successful fundraising round, where they raised $15 million in venture capital investment. The round was oversubscribed and was led by ParaFi Capital and Greenfield, with participation from other firms such as Arrington Capital, Circle Ventures, Gnosis, The Spartan Group, and Wintermute Ventures.
Following the news, the protocol’s native token, CFG, saw a surge of 14% before moderating gains. It remained up by 5% over the past 24 hours, outperforming the sector benchmark CoinDesk DeFi Index, which saw a 1% decline during the same period.
This development occurs in a highly competitive environment, as digital asset firms and global banks strive to tokenize traditional financial products like bonds and credit. This move is aimed at increasing efficiency, settlement speed, and transparency. Asset management firm 21.co predicts that the market for tokenized assets will reach $10 trillion by the end of the decade.
Centrifuge specializes in bringing structured credit products to the blockchain, with active loans on the protocol valued at $270 million, according to rwa.xyz data.
Ben Forman from ParaFi Capital expressed confidence in institutional adoption, stating that the Centrifuge team is a leader in real-world asset tokenization and takes a thoughtful approach to design decisions around legal, regulatory, and smart contract architecture.
It is worth noting that this announcement coincides with the featured image being credited to Freepik, and a disclaimer being included. With the competition in the RWA tokenization realm intensifying, it will be interesting to see how Centrifuge’s lending protocol for real-world assets will fare in the market.
