Apr 17, 2024 - Business

Exclusive: Centrifuge raises $15 million in oversubscribed funding round

Illustration of a pattern of hands trading tokens.

Illustration: Gabriella Turrisi/Axios

Centrifuge, a platform dedicated to turning real world assets (RWAs) into loans, has raised $15 million in Series A funding led by ParaFi Capital and Greenfield.

Between the lines: The company is doubling down on delivering decentralized finance (DeFi) to institutions, a plan announced Wednesday at Token2049 in Dubai.

  • The Series A was oversubscribed by $5 million, according to co-founder Lucas Vogelsang. Other investors included Circle Ventures, IOSG Ventures, Arrington Capital, the Spartan Group, and Wintermute Ventures.

Zoom in: The fundraising news comes with a proposal, penned by Vogelsang, to build a lending market called Centrifuge Pools.

  • Centrifuge Pools wants to deliver the utility on-chain that real-world assets like Treasuries have in traditional financial ecosystems.
  • "Users can't hedge, speculate, borrow, or service liquidity needs with or on RWAs today," Vogelsang's proposal reads. "If DeFi wants to expand to institutions, the key infrastructure they already enjoy needs to be here first."

One key piece of the proposal is that the lending market would be built on Coinbase's Base network. The exchange's attestations will allow users to prove they are Coinbase account holders, or "are not sanctioned," Vogelsang said in messages exchanged with Axios.

Between the lines: That's a ready cohort of potential platform users as opposed to having to conduct manual know-your-customer checks with each new sign up.

  • The initiative would be funded and built by the DAO, an important governance feature, Vogelsang said.
  • "We want to use the Cayman foundation structure, because it gives token holders a lot of control."

The big picture: When asked why he's doubling down on DeFi at a moment when U.S. regulatory authorities don't seem very keen on the industry, he said:

  • "The proposal to launch this structure with a legal wrapper is to ensure it is compliant and it's a big part of our focus."
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