<p><span data-contrast="auto">Decentralized finance protocol Centrifuge has raised $4 million in a strategic round from backers Coinbase Ventures, BlockTower, Scytale and L1 Digital.</span></p> <p><span data-contrast="auto">The Berlin-based project enables real-world assets — such as real estate, consumer credit and invoices — to be tokenized and leveraged within DeFi services. </span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}">Such tokenization has been seen as one of the core use cases for blockchain technology, as it allows for more transparent and liquid markets.</span></p> <p><span data-contrast="auto">The startup’s most recent </span><span data-contrast="none">publicly announced</span><span data-contrast="auto"> raise <a href="https://www.coindesk.com/business/2021/02/23/galaxy-digital-iosg-lead-43m-funding-round-for-defi-bridge-centrifuge/">occurred</a> in February of last year and secured $4.3 million from investors that included Galaxy Digital, IOSG Ventures and Rockaway Ventures. It also <a href="https://www.accesswire.com/701860/Centrifuge-and-BlockTower-Announce-3-Million-Treasury-Sale-Under-New-Strategic-Alliance-To-Build-the-Future-of-Real-world-Assets-On-chain">announced</a> a </span><span data-contrast="none">$3 million strategic partnership</span><span data-contrast="auto"> with BlockTower in May.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="auto">"Tokenizing very liquid, very well-established assets is only a marginal increase in utility,” Lucas Vogelsang, CEO and co-founder of Centrifuge, said in an interview with The Block.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> Hence the startup focuses on </span><span data-contrast="auto">the private credit market because it's </span><span data-contrast="auto">“largely illiquid" and "very untransparent."</span></p> <p><span data-contrast="auto">Centrifuge is one of BlockTower’s first investments in its </span><span data-contrast="none"><a href="https://www.theblock.co/post/176654/blocktower-launches-150-million-fund-backed-by-bpi-france-and-mass-mutual">new</a> $150 million fund</span><span data-contrast="auto">.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span><span data-contrast="auto">BlockTower’s backing is more than just a simple VC investment, Vogelsang said. The BlockTower credit team has secured initial approval to be onboarded as a collateral provider to MakerDAO. BlockTower is set to provide $70 million in junior capital alongside Maker's contribution of $150 million to create a $220 million pool on Centrifuge.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <h2>What's next for Centrifuge?</h2> <p><span data-contrast="auto">Centrifuge has two core users, Vogelsang said. The issuers, which are a small group that do the heavy lifting and will bring the assets on chain, and the investors who will passively hold these assets.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p>Right now, investors interact with these assets through Centrifuge's marketplace Tinlake. This will likely be wound down at the end of the year, when users will begin to be switched to a multi-chain experience.</p> <p><span data-contrast="auto">“The Centrifuge parachain on Polkadot, that's what the issuers use to create these assets and then we're going to bridge them to wherever there is liquidity,” Vogelsang said. “Meaning the issuers can just go and put the assets where there’s the lower cost of capital.”</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="auto">“From a product perspective, if I told you that you have to change banks to buy Apple shares you wouldn't buy Apple shares, right?” he added.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="auto">Bridging helps to solve this problem but it's also a huge candidate for hacks. More than $2 billion in cryptocurrency been stolen across 13 different bridge hacks, according to <a href="https://www.theblock.co/post/163612/why-are-cross-chain-bridges-prime-targets-for-hackers-and-what-can-we-do-about-it">data from Chainalysis</a>. Most of these cross-chain thefts have taken place this year. </span></p> <p><iframe frameborder="0" height="420" src="https://embed.theblockcrypto.com/data/decentralized-finance/exploits/largest-defi-exploits/embed" title="Largest DeFi exploits" width="100%"></iframe></p> <p><span data-contrast="auto">Centrifuge will leverage Polkadot’s trustless Snowfork bridge as well as XCM to connect to parachains.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="auto">“I think in the long run, those bridges will be the only ones that survive,” Vogelsang said.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><i data-stringify-type="italic">This story has been updated to clarify the timing of user migration from Tinlake and the approval status of BlockTower's onboarding to MakerDAO.</i></p><br /><span class="copyright"><p>© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.</p> </span>