Centrifuge to meet demand for Real World Assets with liquidity pools

Centrifuge, a protocol for decentralized financing, is launching real-world asset liquidity pool testnets on a pair of popular layer-2 networks.

The testnets will go live on Arbitrum and Coinbase’s Base, and the team says that discussions are underway with other layer-1s and layer-2s. The announcement was made during a company event held Tuesday in New York City.

The idea behind on-chain financing for RWAs is to provide borrowers with access to liquidity without the need to extensively interact with intermediaries.

This means that any RWA providers, or what the team calls Asset Originators, can tokenize their assets and use them as collateral in Centrifuge’s liquidity pools. Investors can then provide liquidity to these assets and earn yield.

Centrifuge’s liquidity pools can be deployed on any EVM-compatible blockchain.

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Lucas Vogelsang, co-founder and CEO of Centrifuge, told Blockworks that the company is “prioritizing launches based on ecosystem demand for RWA, committed TVL for Centrifuge pools, and their ability to offer unique value for RWA.”

At launch, these liquidity pools are designed only to support total-value-locked (TVL) on the network in which they are deployed, but bridging tokens across chains is not out of the question.

“RWA has long been an industry that caters to a different set of users than what crypto native traders have traditionally been interested in. We believe we will continue to see networks build towards offering unique advantages tailored to RWA,” he said.

Aside from launching pool testnets on Base and Arbitrum, three new RWA pools will go live on the Centrifuge app.

These include Anemoy Capital, a Web3 native asset manager that will bring tokenized T-bills onto the platform; New Silver, a real estate mortgage fund that will increase credit lines from Maker to $50 million; and Flowcarbon, an on-chain carbon credit tokenization platform that will launch its second pool on Centrifuge in collaboration with Celo.

Centrifuge’s pools will draw real-time price feeds from oracle provider Chronicle Labs. This is largely because of Chronicle Labs’ role as an oracle infrastructure provider for Maker, an existing partner of Centrifuge.

Pricing data will be sourced from markets where the underlying assets trade, Vogelsang told Blockworks.

“For liquid credits, such as Treasury bill pools, this data is virtually accurate 24/7, whereas less liquid instruments will offer less frequently available data,” Vogelsang said.

Institutional moves

Centrifuge says it’s building out RWA financing efforts with other companies in the industry as well.

For example, Centrifuge is working with Circle on on-and-off ramping for USDC onto Mauve — a permissioned, non-custodial exchange specifically designed for trading RWAs.

It is also working on a “Proof of Portfolio” project to provide collateral transparency for MakerDAO’s RWAs.

“Proof of Portfolio is a project that enables independent verification of a Centrifuge portfolio by integrating third-party attestations of off-chain and private data,” Vogelsang said. “This allows Centrifuge pools to offer the highest degree of transparency through improved auditability and accountability.”

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