Centrifuge Protocol Fees

I agree, I think the protocol needs to have sustainable revenues and treasury to support long term growth, perhaps initiate token burns, etc. I believe charging issuers a percentage of AUM would be fair, I think a technology intermediary could charge 50bps or so. I dont believe most issuers are set up like funds (at least we are not), so we make our revenue on the originations and spread.

Could LPs also pay a small fee taken off their top of their gains?


Would be great to receive more feedback from issuers.

Thank you prankstr25 for your feedback.

Good day!
We would like to hear the opinion of our Issuers about Protocol Fees.

Some of the questions:

  • What currency of the fee we should implement in your opinion?
  • Structure of the initial fee implementation? Any ideas, or suggestions?
  • Who is the fee charged to (Issuer, Investor or both)?
  • What is the fee based on? Is it a fixed fee or variable?
  • Fees are paid into the on-chain treasury?
  • Should we have an insurance pool or some supply set aside to cover pool losses?

@Fabien @AleG @JeremyKim @FortunaFi @REIF @SAM226

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Here are my thoughts on this topic:


Agreed. Fees should somehow be tied to AUM as opposed to transactions… reason being, shorter dated tenors will always have granularity in the portfolio and higher transaction volume. I acknowledge that we are biased in this regard given asset tenors and liquidity in trade finance.

We 100% support the implementation of protocol fees.


Hi All,

My thoughts below:

  1. If the circulation of CFG continues to increase then it will continue to be debased.
  2. Asset Originators (of which we are one) should be paying CFG fees now for minting NFTs
  3. Those fees should have a minimum and then be related to consideration / monetary value of drawn down funds on each NFT as this will volume weight the costs fairly vs the utility derived
  4. The fees should not be sent to the on-chain treasury but instead be sent to a warehouse which is then burnt on a regular basis.
  5. Fees in aggregate should be larger than issuance, constricting the supply of CFG
  6. Only the issuer need pay fees, as funders will be paying indirectly as the spread between issuer income and issuer rewards to funders will widen to cover the cost of transactions.
  7. $80M TVL is tiny in the world of finance. Many of the A/O’s can deploy multiples of that amount of capital on their own (eg Amazon seller financing for just the top 20% of sellers is many billions of dollars) so fees will be able to drop over time.
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Good evening prankstr25!
Thank you for you full and detailed answer.

Hm… If the fees should be paid in CFG this is mean that you can not predict the value of the token in near future for 6-9 months and as a result, you can not plan your future developing, hiring, partnerships and etc.

I’m not sure if still possible to pay the fees in the on-chain treasury in Polkadot in DAI,USDC, USDT (maybe Devs could provide some information).

Anyway, thank you again for your input. :pray:

Good evening Harbor !
Thank you for your feedback!

Hello Stu!
First of all, thank you for your feedback and for providing answers for all questions!

So would be better to pay fees in DAI, USDC, USDT or?

Any indicative value could you provide, please?

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Good day @Will_Coleman
We would like to hear your opinion about Centrifuge Protocol Fees!
Please provide your feedback, thoughts, or concerns that you might have :hugs:
Thank you in advance.

The goal of the fees should be to produce value while maintaining Centrifuge as a competitive option against TradFi alternatives. For this reason, I’d lean towards protocol fees being charged in a stable as the user experience will be simpler. This would shift the burden of acquiring CFG from the issuers to the DAO, which should be trivial for the DAO and could be challenging overhead for the issuer.

With the fees, the DAO can then choose to purchase (buy-back) CFG, or to fund operations, without the concern of having to sell CFG - selling governance tokens is something I’ve found to be extremely challenging for most DAOs.

As far as I understand, from an economic standpoint, the “cost of servicing” would be a fixed cost. Regardless of the size of the pool, the costs are fairly similar. However, strictly using a fixed cost could reduce the upside for the DAO. I’d opt for a max(x,y) solution whereby x is the cost of servicing a pool with an additional margin, and y is some function with a variable rate based on the size of the pool or the credit utilized.

Softly held opinions here, but I believe the issuer would be in the best position to shoulder this cost.

No downside in setting this up and setting it at 0% to start.

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Good day lakejynch
Welcome to our forum!

Thank you for your elaborate feedback! :hugs:

I appreciate the welcome.

Some background - I am part of the L1 Digital investment team and led our recent investment in the protocol. We’re excited to be joining the community and hope that our input here is helpful and constructive.


We are happy to see investors who are directly involved in governance and who could provide important and relevant feedback.

At this moment we also collecting feedback about Founding Documents:

Hello @ImdioR,

Thanks for the mention! Let me do some research and thinking and I will follow up with my thoughts on the protocol fees :+1:

Are there any other resources outside of this thread you would recommend I look through to make sure I am fully understanding the fee discussion up to this point?

I will aim to give you my in depth thoughts by Monday or Tuesday next week!


Good day Will_Coleman and thank you for your comment and for your time.

You can find some more info here:

and something more here:

This is the reason why we, GCG, decided to reopen a post with 1 topic to discuss, otherwise, commenting on two different proposals could dissipate focus and attention.

Thank you! I will review these over the weekend and send my thoughts next week.


I would agree that it makes the most sense to charge this fee in a stable coin, most likely Dai since that is the stable coin used currently by the protocol. It sounds like that may cause some complexity with the treasury however in my opinion having a relatively predictable income in Dai and having a strong Dai reserve will put the protocol in a better position of longevity.

As I am still new to the ecosystem I’m not sure I have much insight here, apologies.

I would vote to only charge the Issuers and not charge the investor. In my experience from raising capital investors really don’t like fees charged to them in order to invest. For our current TradFi Debt Fund we don’t charge any fees to our investors. While most funds do charge a 1% management fee they still pay a preferred return based on 100% of their investment so as long as the fund hits it’s returns it is almost as if a fee was never charged.

With this being said the only reason for Issuers to join the protocol is going to be one of two reasons 1. Access to more capital or 2. Lowering the cost of capital. For us (we are wanting to be an issuer) we have plenty of access to capital in TradFi, so we are interested in Centrifuge in order to lower our cost of capital. I think the protocol fees should be charged only to the issuer but the fees should be low enough so that the protocol can still provide a lower cost of capital than TradFi.

I would say a fixed % of funds borrowed from the pool. So maybe .25% - .50% of funds borrowed from the pool. Also, me as an issuer, I would rather pay these fees when the loan is paid back to the pool rather than when the funds are borrowed from the pool. I’m not sure if that’s an option or not.

Yes I think this is a great idea.

Yes I also think this is a great idea.

I hope this is a helpful contribution! @ImdioR


Good day, Will_Coleman!
You can not even imagine how your feedback is important and helpful!
Thank you.

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  • What currency of the fee we should implement in your opinion? - CFG
  • Structure of the initial fee implementation? Any ideas, or suggestions? - up-front fee covered 100% by the issuer
  • Who is the fee charged to (Issuer, Investor or both)? - 100% covered by the issuer
  • What is the fee based on? Is it a fixed fee or variable? - variable, a % of the transaction
  • Fees are paid into the on-chain treasury? - it makes sense for the fees to be paid to the on-chain treasury and be burned
  • Should we have an insurance pool or some supply set aside to cover pool losses? - an insurance pool based on the risk would made sense. It should be paid by the issuer

Good day scytale and welcome to the forum!
Thank you for providing your feedback.

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Good day @BlockTower and welcome to the Centrifuge Forum! :hugs:
I`m very excited about your POP process!
We will be very grateful if you could provide your expert feedback about Centrifuge Protocol Fees and the questions asked in the first message.