Centrifuge Protocol

Our assessment

Centrifuge holds $1.64bn across 10 chains with two audits and reports linked. It tokenises private credit — invoices, trade receivables, structured lending — which is a harder problem than tokenising Treasuries and a more valuable one if solved.

Private credit is genuinely illiquid

Treasuries have a deep secondary market and a price anyone can check. A pool of receivables from a specific originator does not. Valuation depends on the originator's reporting, defaults are discovered slowly, and exiting before maturity may be impossible at any price. That illiquidity is the source of the yield premium, not a flaw in the implementation.

Tranching allocates the risk

Pools are typically split into senior and junior tranches, with junior holders absorbing first losses in exchange for higher returns. This is standard structured credit and it works — provided the tranche sizing reflects the real default distribution. Getting that wrong has caused significant losses in traditional finance repeatedly.

Read the originator, not the protocol

Centrifuge's own contracts are audited and well documented. Your outcome depends on the specific pool: who originated the loans, their underwriting standards, their track record, and their incentive alignment. That is credit analysis, and no amount of protocol quality substitutes for it.

Who it suits

Centrifuge fits investors who understand private credit, will read individual pool documentation, and can tolerate illiquidity. Users wanting liquid, low-risk on-chain yield should hold tokenised Treasuries instead.