CFG Renaissance: Token Utility Research Report 2025 by TAG

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Good day, Community!

TAG - Treasury Advisory Group @Kate_Bee , @theoyster , @0xjulcaesar , @ImdioR would like to share with you CFG Renaissance: Token Utility Research Report 2025.

What is this CFG Renaissance Research Report about:

  • A comprehensive research analysis conducted over three months investigating potential pathways for CFG token performance enhancement through targeted initiatives across DAO Marketing, Revenue Generation, and Utility Enhancement

  • In-depth analysis of CFG’s current liquidity constraints and strategic opportunities to improve market position within the Centrifuge ecosystem

  • Research findings from market analysis, competitive benchmarking, tokenomics modeling, and strategic planning sessions to provide evidence-based recommendations for community consideration

Objective:

Provide the DAO with rigorous research and analysis on seven key strategic initiatives that could address CFG’s liquidity challenges, expand the token holder base, and create sustainable value accrual mechanisms while supporting the broader CFG Renaissance movement.

Key Research Areas Covered:

  • Governance Staking Rewards Program

  • Strategic Exchange Listings

  • Community Growth Campaigns

  • TVL-Based Incentive Programs

  • Solana Integration Analysis

  • Market Making Enhancement

  • Buy-and-Burn Mechanism Research

The full report is available here: CFG Renaissance: Token Utility Research Report by TAG :page_facing_up:

If you have any feedback or comments, feel free to post them here or to contact any member of the TAG directly.

Note: The TAG is an expert group mandated to steward the Centrifuge Treasury and our reports should not be considered binding. This research is presented to stimulate community discussion and gather input on strategic directions for CFG token enhancement.

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My recognition for such comprehensive research.

From my perspective, it is important to approach the challenge holistically in order to improve the performance of the CFG token through different initiatives, just as you assessed in your research.
I am personally excited by each of the initiatives.

Nevertheless, research has found that CFG faces liquidity constraints that create a self-reinforcing cycle, preventing institutional adoption and sustainable growth. Likewise, centralized listings remain the primary catalyst for institutional token adoption. Therefore, the strategic listing of the CFG token on major exchanges could dramatically improve liquidity and provide institutional access, fostering positive effects across all venues—thus facilitating governance staking programs, community growth campaigns, and so forth.

The Syrup Protocol case study draws a lot of attention due to its performance thus far, showing pre-Binance and post-Binance results and the effects across all venues.

On the other hand, it’s understandable that meeting the requirements of major exchanges for listing a token represents a challenge in terms of budget, which should be taken into account. From my standpoint, it is worth taking the risk for the sake of improving the performance of the CFG token.

With respect to governance staking—considering there is no additional inflation, but rather that rewards come from the treasury—it seems to be an excellent alternative to incentivize governance participation without significantly impacting the CFG token’s long-term value.

Finally, to measure up to the task, governance staking programs, community campaigns, Solana integration, and the buy-and-burn mechanism are initiatives that can’t be overlooked. In due time, these initiatives could prove invaluable to the success of the mission.

Congratulations again on this great research.

Kind regards,
Luis

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Would really like to have more DEX liquidity, I can’t trade CEX USDT pairs as a European.
Can be on L1 like Ethereum or L2 like Base.
Uniswap is fine to me, maybe with a low trading fee.
Paired with stables/eth, same for me!

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I propose a method to raise on-chain governance participation and align the long-term interests of all Centrifuge stakeholders. In my view, burning can boost community confidence but cannot increase governance activity; locking can lift token yields but cannot guarantee a durable, positive source of returns. The protocol currently retains at least 70% of revenue, which I consider excessive, and these funds often sit idle; over time this easily leads to managerial moral hazard, and the protocol’s interests can trigger infighting among token holders, the management team, and anyone participating in Centrifuge. The fix is to reduce protocol retention, carve out a defined share of protocol revenue, and concentrate it in a pool that is permanently non-sellable.

As Centrifuge accumulates more capital over time, this pool could purchase AAA CLOs to earn yield, or participate in DeFi to earn yield. Most importantly, the right to allocate this liquidity belongs to $CFG stakers, and the returns generated also belong to $CFG stakers.

Even more compelling, as time passes the relationships among all participants will become tighter. Imagine 10 or even 100 years from now how much wealth Centrifuge will have accumulated; where that capital flows is decided by all $CFG stakers. Once the pool is large enough, other protocols will be eager to “bribe” Centrifuge so that liquidity flows to them. But all of this happens transparently in on-chain governance, so corruption is less of a concern.

A small design choice: avoid strict winner-takes-all majoritarianism. For example, if multiple proposals request access to this accumulated liquidity and Proposal 1 wins support from 50% of staked voting power, then 50% of the liquidity budget flows to it; if Proposal 2 gets 15%, then 15% flows to that proposal. This is only a rough idea—I am not a professional—but I believe that, with proper refinement, this approach could put Centrifuge ahead of most token designs.

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Hello TAG team!

First and foremost, thank you for such a thoroughgoing report that reviews the current challenges facing the CFG token, as well as a number of suggestions for how to remedy said challenges. While I’m sure I might be able to share more at our next governance call after further reflection, I wanted to at least share some initial thoughts based on the major categories outlined in the executive summary.

Community Expansion:
In my mind–and admittedly I am quite biased considering many see me as a “community guy”–I believe this is the easiest goal to achieve. During my one-on-one call with Jana, I shared a number of ideas about how key partnerships might broaden the awareness of the Centrifuge ecosystem among more retail oriented investors. Granted, while I understand that Centrifuge’s main audience would be larger institutional clients, the best way to expand community is by growing the awareness of Centrifuge among average folks like me.

Why? Because smaller investors like me who have a growing audience on X (formerly Twitter) provide a service by networking with their friends. Considering how hot the RWA narrative is right now, getting more accounts on X (especially high quality KOLs I know and would like to recommend) to educate others about what Centrifuge is building could broaden the base of the community and help cement Centrifuge’s legacy status about RWA protocols in Web3.

I had been chatting about this topic in particular with @ImdioR for the last few months, even suggesting a few ideas about how we can make this happen (which I also passed along to Jana). Hopefully the Centrifuge DAO grant program can usher in a new era with content creators and educators leading the way to help spread the news about Centrifuge and encourage others to join the community.

Supply Management:
I really like the idea of governance staking, because it is akin to what we use already via Polkadot governance insofar as those who are willing to lock up their tokens receive a greater share of voting power. I believe another interesting idea in this regard is something that Hydration does, which is those who lock up their tokens for governance get a staking boost. Granted, CFG has never had staking or staking rewards in the past, but if some small portion of fee generation could be shared with those who lock their tokens for governance for participation it may also help with supply management.

Liquidity Enhancement:
It would seem this could easily be handled via greater proliferation of the Centrifuge token on more exchanges, seeding liquidity pools on decentralized exchanges, as well as working with reputable market makers. I’d assume that @theoyster would have many connections in this industry considering his line of work and the relationships he has undoubtedly cultivated over the course of his career in Web3.

Revenue Sustainability:
It would seem there are a number of ways to create a revenue flywheel for Centrifuge: 1) teams permissionlessly launching deRWAs on V3 either must pay an upfront cost in CFG or, better yet, mint them for free by then CFG is earned on the margins by providing a deRWA dex that facilitates the trading of these novel tokens; 2) if such infrastructure were to be built, CFG could be the gas token for this deRWA dex and those gas fees could be sent to the treasury…alternatively, if the fees were captured in ETH or some other digital asset, that could be used to buy back CFG tokens. Not exactly revenue per se, but it would put buy pressure on the token and help grow the value of the treasury itself.

I realize these are only initial suggestions and may be half-baked. I will continue to think about them more and share additional ideas at our next governance call when we will likely discuss this report at length.

Thanks again for leading the way in this dialogue, TAG!

Gratefully,

Ryan / Phunky

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Thanks for the team’s efforts on this! I’m glad this conversation is happening. To address your questions posed:

Which of these research areas excite you most as potential opportunities for CFG and token holders?

In order:

  1. Buy-and-burn mechanisms to create direct value accrual from protocol revenue
  2. TVL incentive programs using options to generate treasury revenue while growing the platform
  3. Governance staking programs that could lock significant supply while improving participation
  4. Community growth campaigns to expand our holder base and ecosystem engagement
  5. Market making enhancements to achieve institutional-grade liquidity depth
  6. Strategic exchange listings to dramatically improve liquidity and institutional access
  7. Cross-chain expansion to tap into Solana’s active retail trading environment

What aspects of the current liquidity situation concern you most, and which solutions seem most promising for addressing them?

If you solve the tokenomics, liquidity will follow.

However, liquidity is less of a concern for me as a tokenholder. It matters more to me as a trader, so the question becomes: is liquidity really the problem?

Liquidity is a consequence of a more fundamental issue. That said, focusing primarily on exchange listings and liquidity may improve market conditions short-term, but does not solve for long-term liquidity and market depth. You want market participants to be incentivized to hold and acquire CFG for the long-term; therefore the tokenomics should be designed to accrue value to tokenholders.

Solve this (which is the real problem) and you will solve CFG liquidity issues (the consequence of the problem).

How do you view the balance between short-term initiatives (like exchange listings) versus longer-term value creation mechanisms (like buy-and-burn programs)?

Long-term value is more important to solve for. I understand the need for liquidity and market depth, but liquidity on major exchanges is sufficient for 95%+ of market participants.

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What questions do you have about any of these research findings that would help inform your thinking about potential next steps?

How deeply has the evaluated tokenomic designs that incorporate revenue creation and value-accrual to tokenholders (directly or indirectly)?

Are there other strategic areas not covered in this research that you believe deserve investigation for CFG token enhancement?

I feel as though a more well-defined relationship between Centrifuge and CFG should be defined to establish a proper incentive model for CFG tokenholders. Obviously the needs of the asset originators, corporate entity, and tokenholders would need to be considered, but I would welcome looking more closely at AAVE, ETHFI, MKR, etc. for inspiration on how to design a token model that incentivizes long-term ownership.

Thanks!

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Hi EtherFuture
Thank you for your detailed answer.

I should disagree with this.

  • Centrifuge has the lowest value in ±2 Depth among all competitors.
  • The daily trading volume is also is the lowest one.

That is one of the biggest issues for big institutional players to get into CFG and also to get out.
They literally can not buy or sell CFG without moving the price.

None of the big VCs or institutional players want to buy illiquid assets.

I am 100% percent on the same page with you.

Right now, 83% of the tokens are in circulation, which in my opinion should be removed or locked.
We should look at what other RWA protocols (and not only) provide for retail users.

Maple, for example, has locked 38.3% of its circulating supply through simple staking:

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Together with the strong governance process, these tokens could not only be locked, but also participate in governance and earn rewards from block rewards.

:heart_eyes:

What are the exchanges you have in mind?

This is partially already happening right now:

I would love to expand this more broadly, of course.

About this i guess @itsbhaji already mentioned something. However, in order to do a significant buy-back and/or burn mechanism, the Protocol Revenue should be substantial.

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I really like how this discussion is evolving, especially the combination of staking mechanisms, revenue allocation, and liquidity improvements. Building on what’s already been shared, I’d like to suggest a few integrated directions:

1. Governance Staking + Non-Sellable Fund

  • Stakers could govern a non-sellable treasury fund invested in yield-bearing assets.

  • Returns flow back to stakers, aligning incentives without inflation.

  • Boosts for longer lock periods (3/6/12 months) would help reduce circulating supply.

2. Dual Revenue Flywheel

  • Split protocol revenues between:

    • Buy-and-Burn (direct value accrual).

    • The non-sellable fund (ongoing yield for governance participants).

3. Liquidity via SwissBorg (instead of pure CEX strategy)

  • CEX listings bring visibility but also high costs and regulatory risk.

  • SwissBorg could be a strong alternative/complement: EU-regulated, community-driven, already retail-focused on yield products and RWA exposure.

  • This seems very aligned with CFG’s mission and community base.

4. Community Growth

  • Strengthen visibility with KOLs, AMAs, and educational content.

  • Layer in participation incentives (airdrops tied to staking, governance NFTs).

Open questions for the group:

  • What % of revenue should go to Buy-and-Burn vs. the non-sellable fund?

  • What staking lock durations would be attractive yet impactful?

  • Do we see SwissBorg as a strategic gateway before going for larger CEX listings?

I look forward to hearing your views; this seems to be a promising path towards sustainable utility and harmonisation of governance.

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For the listing on Swissborg, there are some requirements that should be done.
That is the listing on the top-3 exchanges (ideally 2) and the integration on Solana.
Plus the integration cost + other expenses. Swissborg isn`t cheap at all.

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I see there’s still debate around burning, so I want to reiterate that I disagree with using protocol revenue to directly buy and burn $CFG. A better approach is to route that revenue into a non-sellable pool to acquire AAA CLOs or any other yield opportunities; the resulting profits can then be used either to burn $CFG or to reward stakers. I’ve outlined concrete steps for this earlier in the discussion.

Second, I’d like to focus on lockup terms. We can take a page from Liquity V2 and avoid rigid presets like 3/6/12 months, which create cliff risk at expiry. Instead, design a staking system where a user’s weight within the overall $CFG staking set accumulates over time to discourage premature unstaking. If a user unstakes, the weight associated with the unstaked portion is forfeited; if they don’t, their weight growth accelerates as time passes. This aligns incentives between retail and whales, preventing weight from concentrating with whales and preventing retailers from staking only for short-term rewards and then leaving CFG when those incentives fade or another protocol offers a higher APY. This issue may be less visible in the protocol’s early phase, but once the system matures and price stabilizes, it becomes crucial. At that stage, if I were a retail staker, I wouldn’t forgo my accrued staking weight for a short-term incentive elsewhere.

Lastly, there’s no need to overemphasize the token designs of protocols like AAVE or MKR. We should learn from them and absorb the lessons, but there’s no need to place undue weight on replicating their token designs.

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Interesting… :heart_eyes:

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I don’t disagree with you. I should have been more specific; by “95%” of market participants I meant “as measured by the # of participants” (i.e. those who trade <$10k daily). VCs, institutional players, prop trading shops, etc. would bring $ volumes to CFG and should definitely be part of the calculus. However, I subscribe to the maxim that if you “show me the incentive, I’ll show you the outcome” (Charlie Munger) and therefore if we solve the incentive mechanism for tokenholders, this would inevitably generate demand for the token, pushing market cap up, and attracting liquidity in the process.

Directly focusing on liquidity is important; I would just weight our efforts towards solving the tokenomics if the objective is to create sustainable demand and liquidity.

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Very much agree with this idea. The key is to balance the inflation rate of staking (if there is inflation -there are other ways to solve for this) such that this mechanism generates more net demand than supply for the remaining coins in circulation.

Making staking yield a function of time (time) and staked coins (amount) has been used in other protocols successfully (e.g. CRV, CAKE) as @ymarnier suggested. I like the idea of tying protocol revenue to “accretive activities” (e.g. a fund that invests in RWAs where the income generated is used to buy-and-burn). IMO some of the ways that other governance tokens fall short is that protocol revenues have limited or no restrictions attached to how the tokenholders allocate capital, resulting in funds getting directed activities that may not be accretive to the protocol.

I would want to think more deeply about how we could solve for this.

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The last time I negotiated exchange listings was in 2018, and I imagine pricing/requirements have changed dramatically since then, so I can only speak based on this experience.

Personally, I would put our efforts into DEXs and Top 5 CEXs (e.g. Binance, Bybit, Coinbase).

I would focus first on low-to-no cost efforts such as listing or supporting liquidity on high-volume DEXs. Listing on Coinbase’ Base DEX seems like an obvious next step for CFG: https://www.coinbase.com/en-nl/trade-crypto/dex This provides access to millions of users on Coinbase without having to pay for a formal listing on their CEX. Being on their DEX might help towards a CEX listing in the future as well (Coinbase Ventures is an investor in Centrifuge and has an incentive to support a CEX listing, so they offer us a listing at favorable terms).

There is certainly value in listing on as many CEXs as possible, but it’s largely a function of cost-benefit and there are diminishing returns. I don’t have a strong opinion on which exchanges are best for Centrifuge, other than the obvious “majors”, and my belief is that “1 major” is better than “n minors”, but cost being the major factor.

That said, if we want to have successful launches on new exchanges, I believe solving the tokenomics with a well-defined framework for value accretion/accrual is a helpful precondition for success.

Thanks!

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What are the top 3-5 DEXs that you can name (without Solana).

Top-3 CEXs is already happening right now:

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I like the idea of establishing a relationship between the pools and staking.

However, something to keep in mind is the cashflows in the non-sellable fund / staking pool (SP):

  1. With current Centrifuge pools (CPs) such as JAAA, cashflows are not distributed to tokenholders directly. The cashflows of the underlying assets (which could be monthly, quarterly, etc.) are used to calculate a NAV which is represented by a token price. To generate cashflow for “accretive activities” (to buy-and-burn, distribute to stakers, etc.), the SP must actively redeem tokens equal to the APY in the CPs to maintain its principal AUM.
  2. The CP must have sufficient liquidity to satisfy the redemption (which is not a guarantee), so there may be a delay between the periodic redemption requests (e.g. daily, monthly, quarterly) and the receipt of cashflows.

That said, this design limitation could be solved if a robust borrowing market emerges for CP assets such that the CP (or the SP) can generate liquidity by lending its collateral out to generate sufficient liquidity for redemptions (or in the case of the SP, “accretive activities”), but this inherently introduces leverage into model and we’d have to be comfortable with placing constant selling pressure on CPs, which could introduce systemic risk.

Another idea is to base the SP design on the “NAV of all CPs” instead of the “APY of invested capital in specific CPs” (which is more of an abstract concept that does not require the flow of funds) such that for each staking participant, the foundation mints CFG equal to the difference between the exit NAV and the entry NAV. In the case where this value is negative, stake CFG is proportionally burned. This design is similar to how the existing CPs operate, but instead creates a “synthetic financial instrument” that replicates the performance of CPs without putting protocol revenue “to work in pools”. Think of it like a “Centrifuge Index” that tracks the performance of all CPs. Stakers inherently take risk by staking (i.e. no free lunch) and are rewarded (or penalized) for it. In this case, protocol revenues are entirely freed up to buy-and-burn. This approach is interesting because: (i) if the Centrifuge Index produces a negative return, CFG supply decreases via the SP, and (ii) if the Centrifuge Index produces a negative return, CFG supply increases via the SP, and (iii) in both cases, protocol revenue is used to buy-and-burn, reducing supply.

Neither approach is perfect. I would want to think through this some more, but there is something novel we could adopt here given Centrifuge’s unique operating model.

Thanks!

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Great to see it (Bybit). Below are the Top 5 DEXs by volume. I’m not implying CFG isn’t already active on some of these (e.g. Uniswap); I was just making a general comment about DEX liquidity and expansion being low cost / effective areas of focus (notably Coinbase DEX, although CFG’s presence in Asian markets seems nascent as evidenced by PancakeSwap/Binance).

Rank DEX Name 24h Trading Volume (USD) Notes on Blockchain(s)
1 Uniswap $3.987 billion Multi-chain (primarily Ethereum, Base, Arbitrum, etc.)
2 PancakeSwap $1.811 billion Multi-chain (primarily BSC, Ethereum)
3 Hyperliquid $912.31 million Hyperliquid (Layer 1 for perpetuals)
4 Aerodrome $703.95 million Base
5 Fluid $647.85 million Ethereum (liquidity layer)
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流动性现在太差了，这个才是最关键的问题，应该把流动性增加作为第一目标

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Translation:

" Liquidity is too poor now, this is the most critical issue, increasing liquidity should be the first goal"

Hi there!
We kindly invite you to use English as a main language on the forum.
Thanks.

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You’ve thought this through in depth and surfaced technical challenges I overlooked. I’m not very strong on the technical side, but I believe this line of thinking is truly a next-generation token design. It can tightly unite people across all layers of the protocol through $CFG, giving the protocol strong cohesion. Over time, the protocol will accumulate a large non-sellable capital pool; at that point, people’s focus will be on finding prudent yield strategies for that pool, rather than endlessly trying to tap Centrifuge’s protocol revenues. If we don’t act now, once the new $CFG token model is up and running, making changes will be ten times harder than it is today.