Centrifuge

Centrifuge is a protocol built to connect real world assets to decentralised finance. Its aim is to close the gap between businesses that hold illiquid assets, such as invoices or royalties, and investors looking for stable yield. The system enables companies to tokenise their financial documents into non-fungible tokens, called Business NFTs, which can then be used as collateral on lending platforms.

The protocol was designed to create a Global Business Graph, a network of interconnected buyers, suppliers, and financiers. By anchoring financial documents on chain and linking them to off-chain data, Centrifuge creates a single verifiable source of truth for business interactions. This helps reduce reliance on third parties, lowers costs, and makes financing more accessible.

Centrifuge operates its own blockchain, called Centrifuge Chain, which is based on Substrate. The chain anchors states from the peer-to-peer document exchange network and bridges them to Ethereum. This hybrid model provides private off-chain exchange of sensitive business data while preserving security and auditability on chain.

CFG is the native token of Centrifuge. It underpins the system through staking, governance, and transaction utility.

• Staking and validation: Validators stake CFG to secure the network, propose blocks, and anchor states of off-chain documents. Delegators can also stake CFG by assigning it to validators, sharing in rewards. Misbehaviour is punished through slashing of the bonded tokens.
• Transaction fees: CFG is used to pay fees on Centrifuge Chain. Validators may charge these fees for processing transactions and anchoring document states.
• Governance: CFG holders take part in the protocol’s governance by voting on upgrades, parameter changes, and the allocation of development funds. This ensures that those who use and secure the system guide its long-term evolution.

Rewards are distributed to validators and delegators for securing the network, while over time the system shifts toward fees as the primary incentive mechanism.

Centrifuge Chain uses a proof of stake model with a nominated validator selection algorithm. Blocks are proposed through BABE and finalised with GRANDPA consensus, creating fast and secure block production. Anchors record the state of off-chain document exchanges, allowing Business NFTs to represent assets like invoices directly on chain.

The network design allows operational nodes to exchange documents privately while publishing their verified states for use in decentralised finance. This architecture combines privacy, verifiability, and liquidity in a single system.