Glossary

A glossary of terms related to Centrifuge and real-world assets onchain. For a more general glossary of blockchain and decentralized finance terms, see Consensys's Blockchain Glossary.

Asset

In a Centrifuge pool, assets are tokenized as NFTs and financed by the pool's issuer.

Asset Originator

Often (but not always) the issuer, responsible for sourcing and managing real-world assets to be financed.

Centrifuge App

The Centrifuge App is Centrifuge's interface for investors to invest in real-world assets and for issuers to manage their pools and assets as well as to draw financing from these assets.

Centrifuge Chain

Centrifuge Chain is a blockchain specifically designed for real-world assets. It powers pools, their assets, tranches, onchain governance, the treasury, and the CFG token.

Centrifuge Prime

Centrifuge Prime is our product that helps DAOs, protocols, and other crypto-native organizations invest in and scale a portfolio of real-world assets.

Collateral

Assets pledged by borrowers to secure a loan, ensuring the lender can recoup some value if the borrower defaults.

DROP / TIN

In previous iterations of Centrifuge (i.e. Tinlake), DROP was the name of the token representing the senior tranche in a pool, and TIN the token representing the junior tranche in a pool. Tranche tokens in pools on Centrifuge Chain can have any name as defined by the issuer.

Epoch

In Centrifuge's pools, an epoch is a fixed time period where investment and redemption transactions are temporarily locked and then executed at the end based on predefined rules. This system ensures coordinated and fair handling of funds, allowing for new asset financing while prioritizing investor redemptions.

Issuer

An entity that offers real-world assets for financing on Centrifuge. In many (but not all) cases, an issuer may also be the pool operator and/or the asset originator.

Liquidity Pools

Centrifuge Liquidity Pools are smart contracts deployed on EVM chains (like Ethereum and its L2 networks) that allow for users to invest in pools on Centrifuge. For example, Liquidity Pools deployed on Ethereum allow Ethereum users to invest in a Centrifuge pool without leaving Ethereum.

NAV (Net Asset Value)

The total value of a pool's assets. This valuation is typically required when an asset or portfolio of assets is being sold, or when investors want to enter or exit an existing pool. In such cases, the portfolio's value ultimately determines the investment or redemption price.

NFT

NFTs are a unique digital identifier that, unlike the dollar or ERC-20 tokens like CFG, are unique and "non-fungible." In the case of Centrifuge, NFTs are used to represent real-world assets onchain.

Onchain

Like being online, but on a blockchain.

Pool

A collection of assets bundled and financed onchain on Centrifuge.

Pool Reserve

Funds in a pool not actively financing assets.

Pool Value

The total value of assets within a specific pool on Centrifuge. This also includes the reserve.

Real-world Asset

Physical, tangible assets like real estate, treasuries, or commodities, as opposed to natively digital assets. In Centrifuge, these are tokenized for use in decentralized finance. Not to be confused with risk weighted assets!

SPV (Special Purpose Vehicle)

A separate legal entity created to isolate financial risk. In the context of Centrifuge pools, an SPV is typically used for holding real-world assets that are being financed. It allows these assets to be legally and financially separated from the main operating company, reducing risk and improving transparency for investors.

Tinlake

The first iteration of Centrifuge's decentralized application for investing in and financing real-world assets, deployed on Ethereum. Tinlake is now a legacy platform and has been replaced by the Centrifuge App.

Tokenization

The process of issuing a digital representation of an asset on a blockchain. In the context of Centrifuge, tokenization is process of converting real-world assets into digital tokens onchain. Tokenization

Total Assets Financed

The cumulative value of all real-world assets financed through the Centrifuge platform, all time.

Total Value Locked (TVL)

The total amount of assets that are currently being staked or locked in a blockchain protocol, a common metric in DeFi to assess the scale of participation. In Centrifuge, TVL is measured as the sum of all pool values.

Tranche

Common in traditional finance, tranches are layers within a pool characterized by varying degrees of risk and return. Common examples are senior, mezzanine, and junior tranches, with senior being the lowest risk and junior being the highest (with differing returns to match).

Tranche Token

Digital tokens representing a stake in a specific tranche of an investment pool, entitling holders to returns based on the performance of that tranche.