Why Has Centrifuge’s CFG Been Pumping in the Last Two Days? This Strategic Partnership Plays a Big Role

Cryptocurrency Centrifuge (CFG) has seen its price surge by more than 45% over the last 48 hours and 20% today alone. This comes on the heels of a strategic collaboration between the decentralized finance protocol Centrifuge and the stablecoin platform MakerDAO.

The Power of Partnership
According to crypto analyst James Tolan (@JxTolan on Twitter), the partnership with MakerDAO has been “vital” to Centrifuge’s recent success. He outlines how the two products work together to create a new liquidity stream for real-world assets:

“Centrifuge allows users to create digital tokens that represent real-world assets like invoices or real estate. The asset owners can get a loan on the blockchain backed by their real-world asset tokens.”

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Expanding Access to Capital
Here’s how the partnership connects these real-world asset-based tokens to MakerDAO’s decentralized credit capabilities:

“Centrifuge assets can be locked in Maker Vaults as collateral to generate DAI. The stablecoin is backed by the underlying real-world asset tokenised with Centrifuge.”

This gives asset holders a new way to access capital against their property or unpaid invoices. It also diversifies the collateral behind DAI, the largest decentralized stablecoin.

Tolan summarizes the benefits for each protocol: “For Maker this diversifies the collateral type in the Vaults, extending beyond crypto assets. Traditional collateral makes DAI more resilient. For Centrifuge, it provides a source of liquidity for the borrowers on the platform, allowing Centrifuge to onboard more originators.”

What’s Next for Centrifuge?
Tolan believes this is just the start, saying: “The next step for Centrifuge is to expand this approach to protocols like Aave and Frax Finance.”

With CFG up over 45% in the last two days, the market clearly likes the potential for Centrifuge to bring more real-world assets on-chain through collaborations. As Centrifuge themselves said recently: “this is the evolution of the RWA [real-world asset] x Stablecoin saga.”

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Felix Küster
Felix Küster

Felix Kuester works as an analyst and content manager for Captainaltcoin and specializes in chart analysis and blockchain technology. He is also actively involved in the crypto community - both online as a central contact in the Facebook and Telegram channel of Captainaltcoin and offline as an interviewer he always maintains an ongoing interaction with startups, developers and visionaries. The physicist has couple of years of professional experience as project manager and technological consultant. Felix has for many years been enthusiastic not only about the technological dimension of crypto currencies, but also about the socio-economic vision behind them.