# Centrifuge - ELI5
**URL:** https://gov.centrifuge.io/t/centrifuge-eli5/618
**Category:** Community
**Created:** [January 3, 2021, 7:16pm UTC](https://gov.centrifuge.io/t/centrifuge-eli5/618 "2021-01-03T19:16:45Z")
**Posts on this page:** 8
**Page:** 1
### Author:  [@darkbluechain](https://gov.centrifuge.io/u/darkbluechain)
#### Post date: [January 3, 2021, 7:16pm UTC](https://gov.centrifuge.io/t/centrifuge-eli5/618/1 "2021-01-03T19:16:45Z")
Hello everyone,
I try to understand the ecosystem but Centrifuge has so many layers. I think we need an ELI5 for starters like me.
I’ll probably miss some stuff here or maybe make some mistakes but I’ll give it a try. With your contributions we can make it complete imho.
ELI5 on Centrifuge:
- Centrifuge helps bringing real world assets to decentralized finance. How?
- With two products: Tinlake and Chain
- Chain or Centrifuge Chain is the gateway for real world assets. Businesses or asset originators tokenize the said real world assets on Chain. Now what?
- Now, Tinlake comes in. Tokens on Chain are transferrable to Tinlake via brigde.
- Tinlake’s set of smart contracts let asset originators pool their said tokens (NFTs) and borrow stablecoins in return. This lets businesses to reach the liquidity of DeFi. Who gives them stablecoins?
- Investors. Investors can come and lend their stablecoins. But why?
- For interest bearing tokens namely TIN and DROP. Both tokens accrues interest over time.
- TIN is a risky one that takes the risk of default but it receives a higher return. While DROP is protected against defaults by the TIN token and receives stable (but usually lower) returns.
- Lastly, RAD (Radial Token) is the token that powers Centrifuge.
- RAD provides the framework needed to run the platform without reliance on a single point of failure, including the Centrifuge team or company, and to accelerate its utility.
- It is more than a network token but since this is an ELI5 I’ll not get into that: [For more info on RAD](https://ir.centrifuge.io/static/rad-executive-summary-8e1bfe96bbae3981fe43e4bf1fbcec70.pdf)
- Pools on Tinlake now receives RAD rewards. I think that’s all most of you need to know anyways 🙂
That’s all. I hope I managed to keep it simple and avoided mistakes. If not, please correct me.
Thanks all!
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### Author:  [@Dedi](https://gov.centrifuge.io/u/Dedi)
#### Post date: [January 4, 2021, 2:31pm UTC](https://gov.centrifuge.io/t/centrifuge-eli5/618/2 "2021-01-04T14:31:58Z")
Great eli5 🙂 I think this will help people get a basic understanding of how Centrifuge system works
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### Author:  [@darkbluechain](https://gov.centrifuge.io/u/darkbluechain)
#### Post date: [January 4, 2021, 7:46pm UTC](https://gov.centrifuge.io/t/centrifuge-eli5/618/3 "2021-01-04T19:46:01Z")
thanks, that’s the goal! 🙂
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### Author:  [@Berry](https://gov.centrifuge.io/u/Berry)
#### Post date: [January 6, 2021, 12:33pm UTC](https://gov.centrifuge.io/t/centrifuge-eli5/618/4 "2021-01-06T12:33:25Z")
Cool stuff. Also I would like to know if centrifuge will be a parachain on polkadot or kusama network ? I believe polkadot but I couldn’t find the answer yet… auctions for a spot on polkadot chain are on jan 11. However, kusama is the canary network for polkadot so a few good projects will go on kusama first.
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### Author:  [@Berry](https://gov.centrifuge.io/u/Berry)
#### Post date: [January 20, 2021, 5:35pm UTC](https://gov.centrifuge.io/t/centrifuge-eli5/618/5 "2021-01-20T17:35:17Z")
Update: NOT on Polkadot parachain auction.
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### Author:  [@danger\_dave](https://gov.centrifuge.io/u/danger_dave)
#### Post date: [January 20, 2021, 9:31pm UTC](https://gov.centrifuge.io/t/centrifuge-eli5/618/6 "2021-01-20T21:31:13Z")
What does that mean? Is there another way, apart from auciton, to get allocated a parachain spot?
And what if centrifuge doesn’t ever get a spot? Would it access Polka ecosystem via another (accepted) parachain?
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### Author:  [@Berry](https://gov.centrifuge.io/u/Berry)
#### Post date: [January 20, 2021, 10:13pm UTC](https://gov.centrifuge.io/t/centrifuge-eli5/618/7 "2021-01-20T22:13:53Z")
yes probably on kusama parachain but you could ask @lucasvo
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### Author:  [@patr](https://gov.centrifuge.io/u/patr)
#### Post date: [January 20, 2021, 10:32pm UTC](https://gov.centrifuge.io/t/centrifuge-eli5/618/8 "2021-01-20T22:32:16Z")
nice and clear , plain and simple !