Centrifuge Proposal Set To Introduce Protocol Fees Collected By Treasury

Centrifuge predicts it will accumulate $4M in fees this year.

By: Samuel Haig Loading...

Centrifuge Proposal Set To Introduce Protocol Fees Collected By Treasury

Centrifuge, a leading real-world asset credit protocol, appears poised to introduce a protocol fee charged on all loans matured from its pools.

The Centrifuge community is currently voting on a new roadmap proposal that includes the introduction of a 0.4% fee on the valuation of all completed loans. Voting began on Feb. 23 and is set to close on March 8, and has attracted unanimous support from 117 voters so far.

Centrifuge estimates that its TVL will grow from $532M to $1B by the end of 2024, suggesting that the project’s treasury will absorb $4M in fees this year.

“With projected TVL of $1B in 2024, $4M would be added to the Centrifuge treasury from protocol and Centrifuge Prime fees,” Centrifuge told The Defiant. “Fees are used to fund future development and innovation of the protocol, governed by Centrifuge token holders.”

The proposal follows Centrifuge’s community voting in favor of diverting a portion of fees from transactions executed on Centrifuge Chain — Centrifuge’s Polkadot parachain — to the project’s treasury in October. The project’s treasury will soon begin collecting Centrifuge Chain transaction fees should the latest proposal pass.

The proposal would also pave the way for deploying Centrifuge’s liquidity pools across multiple chains starting with Axelar, the introduction of new types of liquidity pools, and a future integration with the cross-chain bridge, Snowbridge.

Centrifuge taps Finoa for custody services

During an appearance at the ETH Denver conference on Feb. 28, Lucas Vogelsang, the co-founder of Centrifuge, announced that Centrifuge is partnering with Finoa, a regulated crypto custodian.

Finoa will custody the assets representing investments in Centrifuge’s real-world asset (RWA) pools on Centrifuge's platform. The partnership aims to facilitate an increase in institutional adoption of blockchain-based asset management by offering regulated custody services to Centrifuge users.

"We continue to see rapid, widespread growth of real-world assets," Vogelsang said. "2023 brought use case-market-fit for real-world assets. 2024 is about capturing that energy and channeling it into new products, markets and segments to drive the next wave of adoption.”

In June, the project also launched Centrifuge Prime, an RWA platform catering toward investment from DAOs. On Jan. 30, Gnosis DAO voted to invest $10M into U.S. Treasury Bills via Anemoy's Liquid Treasury Fund via Centrifuge Prime.

Centrifuge's CFG token is up 2% in the past 24 hours and 30.5% over 30 days, according to CoinGecko.