title: Reinstate Centrifuge DAO Governance Under CP171
authors: Psilinvestments
uses-component: cp4
technical-proposal: no
requires-onchain: no
impacts/modifies: cp171, cp172
status: rfc
date-proposed: 2026-08-29
date-ended:
## RFC: Reinstate Centrifuge DAO Governance Under CP171
### Summary
I am submitting this RFC to ask the Centrifuge community to begin the process of restoring DAO governance under the mechanism contemplated by CP171.
This proposal is **not an attempt to defeat CP172**, nor is it opposition to Centrifuge pursuing tokenized equity.
In fact, I strongly support the concept of tokenized equity and the possibility of Centrifuge equity ultimately becoming usable within DeFi. I believe that could be an extremely powerful outcome for Centrifuge and for the broader tokenization industry.
What concerns me is the process by which such a fundamental restructuring is being undertaken, particularly while important questions from CFG holders remain unanswered.
The purpose of decentralization is precisely to ensure that when decisions of this magnitude are made, the community has meaningful governance, transparency and the ability to participate before those decisions become irreversible.
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## Why I Am Proposing This
I have supported Centrifuge since the very early Tinlake days.
I came into this ecosystem because I believed in the principles that originally brought many of us into crypto:
- Decentralization
- Transparent governance
- Open participation
- Community ownership
- Accountability
- Building financial systems that do not depend entirely on centralized decision-makers
CP171 described a governance structure intended to improve execution while preserving ultimate community control and providing a mechanism for governance to be restored.
That safeguard matters most when the protocol is considering a fundamental change.
CP172 proposes exactly that kind of change.
The proposed transition from CFG-based value accrual toward an equity-based structure could ultimately be extremely positive. However, CFG holders are being asked to evaluate that transition without having complete information regarding matters that could materially affect the economic outcome.
These include questions around valuation, capitalization, ownership, dilution, governance rights, conversion mechanics and the economic position of CFG holders following the restructuring.
This RFC is therefore not about stopping Centrifuge from evolving.
It is about ensuring that Centrifuge evolves according to the decentralized principles upon which this ecosystem was built.
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## Support for Tokenized Equity
I want to make this particularly clear.
I **support the idea of tokenized Centrifuge equity**.
If Centrifuge equity can eventually be tokenized, transferred onchain and integrated into DeFi, I believe that could create something genuinely important: ownership in a major real-world-asset infrastructure company represented and usable within decentralized financial markets.
That vision is completely compatible with the reasons many of us became involved with Centrifuge in the first place.
Employees, builders, partners, investors and CFG holders should ultimately be on the same side.
Many people working inside this industry chose crypto precisely because they believed financial infrastructure could be built differently.
This RFC should therefore not be interpreted as opposition to the team, Centrifuge’s partners, tokenized equity, or the long-term direction of the company.
It is opposition only to completing a fundamental governance and economic restructuring without sufficient transparency and meaningful participation from the community that helped build Centrifuge.
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## The CP171 Safeguard
CP171 was presented as a governance structure in which ultimate community control would remain and the arrangement would be reversible.
I am asking the community to use that safeguard.
Governance authority contemplated by the CP171 reinstatement mechanism should be restored to the DAO and CFG-holder governance.
Centrifuge should also clearly document the precise technical, legal and governance steps required to implement that restoration so that the community understands exactly what authority would return to the DAO.
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## Relationship to CP172
This RFC is intentionally separate from the question of whether CP172 itself is ultimately good or bad.
The community may ultimately decide that CP172 is the best path forward.
I may ultimately vote for it myself if sufficient information demonstrates that the structure is fair to CFG holders and beneficial to Centrifuge.
But that decision should be made from an informed position.
I therefore respectfully request that the CP172 vote be deferred until CFG holders have had the opportunity to complete the CP171 DAO-reinstatement process.
Proceeding with a vote that materially modifies CP171 while CFG holders are seeking to exercise a governance safeguard contemplated by CP171 could undermine the practical value of that safeguard.
A temporary delay does not prevent CP172 from proceeding.
It simply allows governance and transparency to occur first.
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## Information Requested Before an Irreversible Restructuring
Before the community is asked to approve a fundamental restructuring, I believe CFG holders should receive sufficient information to understand the transaction.
At minimum, the community should receive clear answers regarding:
1. The capitalization structure relevant to the proposed equity conversion.
2. Existing share classes and material economic rights attached to them.
3. Outstanding options, warrants, SAFEs or other instruments that could cause dilution.
4. The fully diluted share count used when assessing CFG’s prospective ownership.
5. How CFG holders would rank economically relative to existing shareholders and other security holders.
6. The methodology by which Centrifuge’s equity value will be determined.
7. Whether future financing could materially dilute former CFG holders immediately following conversion.
8. The governance and voting rights attached to the shares CFG holders would receive.
9. Transfer restrictions, jurisdictional limitations or other restrictions affecting those shares.
10. The expected pathway, if any, toward making Centrifuge equity transferable or tokenized onchain.
11. What happens to CFG holders who do not or cannot participate in a conversion.
12. The precise governance powers that remain with CFG holders before, during and after the restructuring.
This is not a demand for commercially sensitive information to be unnecessarily disclosed.
It is a request for enough information for the people surrendering an existing governance and economic asset to understand what they are receiving in return.
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## Proposed Governance Action
I propose that the Centrifuge community begin the process contemplated by CP171 to restore DAO governance.
The eventual governance question should be simple and separate from CP172:
**YES — Reinstate DAO governance under CP171.**
**NO — Keep DAO governance paused under the current CP171 structure.**
If the community votes YES, the relevant parties should publish the technical and governance steps necessary to restore the DAO’s authority.
CP172 could then be considered through that restored governance framework with the benefit of greater transparency and community participation.
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## Why This Matters Beyond CP172
This question is larger than one proposal.
Centrifuge is attempting to become one of the foundational institutions of the tokenized financial system.
If decentralized governance can be suspended during ordinary periods but cannot meaningfully be restored when the most consequential decisions arise, then the safeguard has little practical value.
Conversely, demonstrating that Centrifuge can evolve into a major institutional business while still respecting decentralized governance would send an extremely powerful message to the industry.
It would show that decentralization and institutional scale do not have to be enemies.
We can have both.
We can support the Centrifuge team.
We can support Centrifuge’s partners.
We can support tokenized equity.
We can support the growth of a world-class RWA company.
And at the same time, we can insist that major changes affecting the community occur transparently and through the governance principles that brought us here.
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## Conclusion
I am not submitting this RFC because I want Centrifuge to fail.
I am submitting it because I want Centrifuge to succeed in a way that demonstrates why decentralized systems were created in the first place.
The objective should not be **community versus team**.
It should be all of us working toward the same goal:
**building the strongest possible Centrifuge while preserving transparency, decentralization and meaningful community governance.**
I therefore ask CFG holders, contributors, employees, partners and the wider Centrifuge community to discuss this proposal openly and constructively.
**Let the community decide.**