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Tokenization

Tokenization in Centrifuge V3 is the process of representing assets or strategies as onchain tokens. These tokens are issued through smart contracts and reflect ownership in a vault, governed by rules set at the pool and share class level.

Each tokenized asset is created and managed through a pool, which contains one or more vaults, and each vault issues share tokens to investors. These tokens may be held, transferred, and used across supported EVM-compatible networks, depending on how the pool is configured.

Learn more:

Why tokenization?​

Tokenization enables assets to become:

  • Transferable (when permitted): Users may hold or move share tokens based on pool-level permissions
  • Composable: Tokens can integrate into DeFi if designed to follow standards like ERC-4626 or deRWA
  • Auditable: All transactions, balances, and ownership records are transparently recorded onchain
  • Programmable: Rules and strategies are enforced using smart contracts
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Not all tokenized assets are freely transferable. Pools define permissioning rules that control who can hold, invest in, or redeem share tokens.

What gets tokenized?​

Centrifuge can tokenize many types of assets and strategies, including:

  • Real world assets: US Treasuries, real estate, credit, carbon, or consumer finance
  • Onchain assets: Tokens, staked positions, or DeFi strategies
  • Structured products: Combinations of both onchain and offchain exposures

Tokenization is flexible. Products can range from direct credit exposure to complex multi-asset vaults or portfolio strategies.

How tokenization works in Centrifuge​

  1. Create a pool
    A manager launches a pool on a selected hub chain. The pool defines capital flow, share classes, and permissioning.

  2. Configure vaults
    Vaults are deployed to accept specific currencies and invest in target assets. They define whether flows are synchronous or asynchronous.

  3. Deploy tokens
    Each share class issues a share token (ERC-20 compatible), optionally including modules for compliance, multi-asset handling, or async workflows.

  4. Distribute to investors
    Investors deposit into vaults and receive share tokens that represent their claim on the strategy.

Token standards used​

Centrifuge builds on Ethereum token standards to support flexible, compliant tokenization:

  • ERC-20: Base standard for share tokens and vault balances
  • ERC-1404: Enables permissioning and compliance rules
  • ERC-4626: Vault standard for synchronous investing
  • ERC-7540: Request-based standard for asynchronous flows
  • ERC-7575: Allows pooled vaults with multiple investment assets

Examples​

  • A tokenized real estate fund issues permissioned share tokens to accredited investors
  • A DeFi-native strategy wraps staked ETH and LSTs into a vault, offering a token to DeFi protocols
  • A curated portfolio combines several Centrifuge vaults into one share class backed by diverse assets

Key takeaways​

  • Tokenization connects assets and strategies to onchain liquidity using programmable, standard-based tokens
  • Pools define the rules and permissions, vaults define the investment flows, and tokens represent the user’s ownership
  • Once issued, share tokens can be held, redeemed, or integrated across DeFi and institutional platforms