Centrifuge and what CFG is for

Centrifuge is building infrastructure for onchain asset management, with products that look a lot like fund and securitization plumbing dressed in DeFi interfaces. The V3 protocol is explicitly multi-chain and uses a hub-and-spoke model, where the “hub” handles accounting and operations and “spokes” handle token issuance and user interaction across supported networks.

CFG is positioned as the ecosystem’s coordination asset. Post-migration, it is a single Ethereum-native ERC-20 token, as described in the token summary, created to consolidate legacy CFG (from Centrifuge Chain) and wrapped CFG on Ethereum into one representation.

From a TradFi realist lens, that framing matters because CFG does not represent a legal claim on cash flows. What it clearly represents in public documentation is governance influence over the protocol’s rules and over the treasury that accumulates resources (stablecoin fees in earlier designs, and inflationary CFG issuance today).

Supply, inflation, and the post-V3 cap table

The defining structural event for CFG tokenomics is the V3 token migration. CP149 passed on March 20, 2025, approved launching a new EVM-based CFG with a 1:1 swap for holders of legacy CFG and wCFG, and proposed expanding total supply by minting an extra 115,000,000 CFG to the Centrifuge Network Foundation.

The V3 token contract address is published as 0xcccCCCcCCC33D538DBC2EE4fEab0a7A1FF4e8A94.

Centrifuge’s own tokenomics page states that, as of January 2026, total CFG supply is 691,800,000 and that this includes the 115,000,000 CFG minted under CP149.

The same page specifies the release constraints on the CP149 mint: 15,000,000 CFG unlocked upon minting in May 2025, with the remaining 100,000,000 CFG vesting linearly through April 2029.

CFG is explicitly inflationary. Centrifuge Docs describe 3% annual inflation based on total supply, and state that all inflationary tokens accrue to the Centrifuge Treasury.

On third-party trackers, this inflationary reality is often reflected as “Max Supply: ∞,” and supply/circulating metrics can conflict with issuer-reported figures. Treat this mismatch as a live data-quality risk when you build models. We track similar integrity issues in our research reports.

Centrifuge Docs also provide a simplified, current allocation snapshot “as of January 2026.” The breakdown is given as percentages and category definitions.

What value actually accrues: fees, treasury, and who gets paid

The most investable question for CFG is simple. Does protocol usage create cash flows that are (1) measurable, (2) durable, and (3) credibly directed in a way that benefits CFG holders?

Historically, Centrifuge governance designed protocol fees to accrue in stablecoins to an onchain treasury. CP28 specifies that protocol fees were to be accrued into the on-chain treasury, and that the protocol fee currency was intended to be a stablecoin (the pool currency) to avoid native-token volatility.

CP28 also documents concrete fee parameters by pool type. For example, it lists 0.4% for “Open Pools” private credit & securities and 0.075% for “Open Pools” public securities & equities. It also specifies a tiered schedule for “Portfolio(Prime) Pools,” including 0.35% p.a. up to $50M, 0.2% p.a. between $50M and $100M, and 0.1% p.a. above $100M.

That is the clean version. Fee revenue accrues to a treasury. Governance decides spending. CFG is the governance weight.

The V3 reality, per later governance discussions, is messier, with onchain fee capture and operational routing not always lining up cleanly during the migration period.

Even without a perfect onchain fee loop in V3, you can see a core tension in the Anemoy fee stack. Prior governance changes reduced a pool’s protocol fee to zero while increasing the management fee (calculated via daily NAV).

For CFG holders, this is the uncomfortable but necessary translation. A management fee is an operating expense paid by fund investors to the asset manager and service providers. A protocol fee is the one that might plausibly be “platform revenue.” Turning protocol fees down to zero can be strategically rational for distribution, but it weakens any near-term “CFG as cash flow proxy” narrative.

On the token side, the only guaranteed, always-on “fiscal flow” described in current docs is inflation. It is 3% per year, and it flows to the treasury. That is not yield. It is treasury funding via dilution, with all the usual second-order effects.

Governance and control surfaces (and why that matters for valuation)

Post-V3, Centrifuge’s governance structure shifted materially. CP171 was approved on November 3, 2025, and active DAO governance was paused, shifting execution under Centrifuge Network Foundation supervision.

The governance docs describe a streamlined structure where the Centrifuge Network Foundation (CNF) provides “board-led oversight” and “manages treasury,” while Centrifuge Labs handles operations, development, growth, and adoption.

CP171’s own framing is explicit about the intent. It states that Centrifuge Labs is a wholly-owned subsidiary of CNF, and claims “there is a single value accrual mechanism: CFG,” alongside the statement that there is “no equity business.” These are important statements, but they are not the same thing as an enforceable distribution policy or a contractual claim.

Centrifuge’s governance docs also define a reinstatement path for token holders. Re-activating the DAO requires an offchain Snapshot vote with a quorum of at least 4,000,000 CFG after a forum process and proposal finalization.

As an analyst, I treat that quorum number as a real governance KPI. It is not just “governance trivia.” It is the difference between a token that can credibly enforce constraints on treasury policy and one that mostly signals sentiment.

Modeling CFG like a financial instrument

If you want to value CFG without self-deception, you need to separate three layers.

If you want a checklist view of the moving parts, our design components guide maps the primitives you’re implicitly modeling.

Layer 1: Governance power over assets. CFG governs (directly or indirectly through the current CNF structure) a treasury that accumulates resources: inflationary CFG issuance and, where enabled, protocol fee revenue. CP28’s design makes the treasury a recipient of stablecoin-denominated fees. Current docs make the treasury the recipient of inflation.

Layer 2: Business performance that is not automatically token performance. Centrifuge can have real revenue, real institutional adoption, and real TVL, while CFG remains a weak cash flow proxy if (a) protocol fees are waived, (b) fees are handled offchain, or (c) treasury assets are spent without a disciplined capital-return policy.

Layer 3: Capital structure drift. CFG supply is inflationary at 3% annually and public trackers often label max supply as effectively infinite. If your valuation framework is “FDV times some multiple of revenue,” you are implicitly assuming a stable token count. That assumption is structurally false here unless governance later changes emissions.

For a comparison case, see how we assess ZRX tokenomics when governance influence and fee capture do not automatically translate into per-token cash flow.

So what is CFG, economically?

In practice, it behaves like an option on future monetization discipline. If protocol fees become programmatic and onchain again, if fee rates become sticky, and if treasury policy becomes legible and credibly aligned with tokenholder outcomes, CFG can start to resemble an equity-like residual claim in spirit. Until then, it is a governance asset with inflation funding, plus a narrative that management wants to harden into “value accrual.”

One more practical point. Migration events create technical and custodial risk that looks like corporate actions in TradFi. Centrifuge’s migration began May 20, 2025, used a 1:1 conversion, and had a deadline of November 30, 2025 that was extended to December 3, 2025 per the forum announcement.

If you are advising projects on these transitions, this is where token economy design stops being theoretical and starts being operational. The best tokenomics in the world still fails if the “corporate action” layer is confusing, costly, or lossy for holders.

Risk register

The main risks in CFG are not “crypto market volatility.” They are governance enforceability, fee capture plumbing, and dilution policy.

Top 3 risks

  1. Value accrual gap (dominant risk). Trigger: protocol fee mechanisms remain waived, offchain, or inconsistently applied across flagship products, while emissions continue at 3% annual inflation. Mechanism: CFG holders absorb dilution but do not receive a countervailing, programmatic claim on fee revenue, since fees (where they exist) either route to treasury without a binding return policy or are operationally managed outside onchain controls. Who bears it: long-term CFG holders, especially those valuing CFG as a proxy for protocol revenue. Measurable indicators: (i) emissions staying at 3% with no compensating burn or distribution policy; (ii) protocol fee rates set to 0 on major pools; (iii) recurring reliance on discretionary, offchain fee handling because onchain protocol fees are not yet supported.

    This is dominant because it is the whole ballgame for valuation. In TradFi terms, CFG is asking the market to price an entity with (a) growing operating activity and (b) a capital structure that can dilute to fund operations, but (c) no hard dividend, buyback, or profit-sharing rule. The treasury receiving inflationary issuance is not a shareholder return. It is retained capital, controlled by whoever has effective governance control.

    CP28 shows a coherent path. Stablecoin fees accrue to an onchain treasury controlled by governance, and governance can decide what to do once fees accumulate.

    But the V3 transition introduces a timing mismatch. During the migration window, fee capture can be either delayed or operationally routed through CNF-managed processes.

    Then governance participation itself becomes a constraint. A key signal is the practical difficulty of reaching quorum on complex, finance-native economic proposals.

    Finally, there is a narrative risk hiding inside CP171’s “CFG is the single value accrual mechanism” statement. It is directionally reassuring, but it is not a financial instrument term sheet. If the foundation can credibly publish recurring financial reporting and tie treasury policy to measurable per-token outcomes, CFG becomes modelable. Without that, CFG is mostly a bet on management judgment and competitive positioning.

  2. Governance centralization and policy instability. Trigger: continued “paused” DAO governance with operational decisions executed through CNF and Centrifuge Labs, plus low participation rates that make reversal difficult in practice. Mechanism: tokenholders have theoretical control, but execution authority concentrates, and parameters that matter for valuation (fees, emissions, treasury spend) can change with limited effective constraint. Who bears it: CFG holders who price in decentralized checks and balances, and institutional counterparties doing diligence on predictability. Measurable indicators: (i) governance remaining paused under CP171; (ii) repeated failures to reach quorum on key economic proposals; (iii) treasury assets transferred and managed under CNF with limited onchain enforcement.

  3. Migration and supply reporting risk (data integrity risk). Trigger: contract migrations, deprecations, and indexer differences produce inconsistent “total supply” and “circulating supply” across sources. Mechanism: investors and integrators misprice dilution, miscompute FDV, or apply incorrect risk limits, especially when using automated trading and treasury systems. Who bears it: exchanges, market makers, treasury managers, and tokenholders using third-party dashboards. Measurable indicators: (i) persistent divergence between issuer-stated supply (e.g., 691,800,000 as of January 2026) and third-party displayed totals; (ii) large step changes around migration windows and deadlines; (iii) ongoing migration update notices from major aggregators and exchanges.

Verdict, as a TradFi realist: CFG is not “bad tokenomics.” It is incomplete tokenomics. The docs clearly describe supply, emissions, and governance control. They do not yet provide an equally hard, programmatic bridge from protocol revenue to per-token value. Until that bridge is built and enforced, CFG remains a governance-weighted claim on a treasury whose capital formation is meaningfully inflation-funded. If you need an audit-style review of links between incentives, cash flows, and control, our tokenomics services can help.



This article is part of our Tokenomics Deep Dive series.