CP172: Exploring Token-to-Equity to Maximize Long-Term CFG Value

[hong]

I am extremely angry about this.

If this is really the level of criticism that resulted in a block, then instead of spending time silencing a major CFG holder, the team should be spending that time giving the community a meaningful answer to the questions that have been left unresolved for days.

And this is exactly why the current silence is becoming dangerous for Centrifuge’s credibility.

You introduced a proposal that potentially changes the entire economic structure of CFG, the token price has collapsed, holders are demanding basic information, and instead of providing substantive clarification, a holder raising serious concerns is apparently being blocked.

Whether the team intends it or not, this kind of behavior creates an extremely damaging perception.

It can make the situation look as though the equity conversion has already been substantially decided behind the scenes, while the token is being allowed to collapse and critical holders are being pushed out of the discussion.

[Novciu]

Subject: Formal Complaint: Systematic extraction of token liquidity and breach of utility promises

To the Management and Legal Team of Centrifuge Inc.,

I am submitting this formal complaint regarding the unacceptable proposals outlined in CP172.

The core goal of $CFG has always been to bridge traditional finance and DeFi. For years, you have subjected retail holders to token inflation and dilution, utilizing that very capital to pay your corporate salaries under the explicit promise that you would build and scale the ecosystem around the $CFG token to increase its utility.

By what legal and ethical right do you now attempt to discard years of public development and throw the token’s future into the trash?

It is highly apparent that after replacing the core founders, the new leadership is merely attempting to extract and drain liquidity from the public token market to benefit private corporate equity. What concrete actions were ever taken to restructure tokenomics for the benefit of token holders before deciding on this sudden escape mechanism?

Abandoning the community that funded and sustained your early growth is not a transformation into “new corporate quality”—it is a blatant corporate rug pull and market fraud.

Pushing CP172 forward without providing a guaranteed corporate buyback at historical entry prices for public holders is an invitation for severe international litigation and class-action lawsuits.

I expect a formal, written response from your compliance department regarding this matter.

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[geo1ee]

Has the team come up with a response to restore market confidence in the CFG? This is really frustrating. I’ve held CFG for over three years, and I kept buying more because I believed in its future, but right now the losses are so large that it’s very painful. I hope the team makes a good decision in the right direction, comes up with a solid solution, and helps restore trust among all CFG holders.

[blockpinned]

I checked one narrow part of CP172 on-chain: whether the current CFG token has ever seen treasury buybacks or burns, and what continues to dilute its supply. Numbers below are anchored at Ethereum block 25,788,346 (2026-08-19) and re-checked today.

Across the token’s 506-day history, for the treasury wallet tracked in our dataset (identified from mint and governance flows):

• market buybacks observed: 0
• treasury burns observed: 0
• all 2,080 historical burn events come from migration mechanics, not market purchases

Meanwhile CFG supply has an active inflation path of roughly 3.000065%/yr through InflationMinter.

The important part is not that mint() can be called by anyone — the caller does not receive the tokens. The important part is that the rate, period and recipient are immutable in the current minter: changing the 3% requires replacing and re-permissioning the contract rather than editing a parameter in place.

I rebuilt the balance ledger from 335,808 transfers and it closes to totalSupply() with a 0-wei difference, so the zero-buyback result is not coming from a missing transfer range.

CP172’s “Optionality for Non-Participating Holders” section (present since the original post) already states that non-participating holders may retain or sell CFG, and that Centrifuge will work to ensure market liquidity during the conversion period. That answers one part of the question this thread keeps raising.

What still seems unresolved is what retained CFG looks like after that period. Three questions for the team:

1. Will the 3% InflationMinter continue operating during and after the equity conversion, or is the intention to revoke or replace it?
2. After the conversion window closes, what governance or economic function will retained CFG have — and is liquidity support intended to continue beyond the conversion period?
3. What happens to CFG surrendered for shares — is it burned, retained by the company, or treated some other way?

These details materially affect the economics of “keep CFG” versus “convert to equity.”

Full methodology and transaction-level checks: Điều gì đứng sau cú sập 18% của CFG? — BlockPinned

If there is a treasury market-buyback transaction we missed, or if rate/period/recipient can be edited in place on the current minter, please point me to it and I’ll correct the dataset.

[sandbun]

CP172 should be judged by its stated goal: maximizing long-term CFG value

The title of CP172 is “Exploring Token-to-Equity to Maximize Long-Term CFG Value.” If maximizing long-term CFG value is the objective, then token-to-equity should be compared transparently with simpler, token-native alternatives such as revenue-funded buybacks and burns, which are already established value-accrual mechanisms across crypto.

Second, the market reaction should not be ignored. Price action cannot prove causation or tell us what every holder thinks, but CFG’s significant relative underperformance while the broader crypto market is strongly bullish is a meaningful signal that the market is not interpreting CP172 as clearly value-accretive. That deserves serious attention.

Third, before voting, holders need a concrete economic simulation. Saying 1 CFG = 1 share defines an exchange ratio, not the value of that share. Please provide at least several realistic company-valuation scenarios showing the implied value of one CFG / one share, together with the exact rights attached to it: voting rights, economic/distribution rights, dilution, liquidity/transferability, and what happens to holders who remain in CFG.

Finally, predictability itself has value. Governance can and should evolve, but the fundamental economic proposition of an investment cannot be redesigned every few months without creating a significant uncertainty—or governance—discount. Investors need a stable long-term framework for how CFG captures value.

Before making such a fundamental change, I believe the community deserves a clear answer to one simple question:

Why is CP172 expected to maximize long-term CFG holder value better than keeping CFG as the central value-accrual asset and implementing mechanisms such as buybacks and burns?

[344200zz]

[RFC Feedback] Counter-Proposal & Core Requirements for CP172: Preserving Token Utility, Value Accrual, and Dual-Track Flexibility

​Title: Feedback on CP172: Core Requirements to Protect Non-Converting CFG Token Holders and Align Long-Term Incentives

​Author: Long-term CFG Community Member / Token Holder

​Executive Summary

​While we recognize the team’s effort to expand institutional partnerships and navigate regulatory environments, CP172 in its current form introduces significant uncertainty for public token holders.

​To ensure that the transition to an institutional infrastructure does not undermine the foundational value of the CFG token, we request the inclusion and formalization of the following core principles into the CP172 proposal before moving toward any formal vote.

​Key Requirements & Proposal Adjustments

​1. Direct Revenue Accrual to the CFG Ecosystem

A clear and legally binding mechanism must be established to allocate a designated portion of all protocol and institutional deployment revenues directly back to the CFG ecosystem.

​2. Value Accrual via Buyback/Burn or Treasury Accrual

Protocol revenues must be utilized for financial value capture—specifically through automated/periodic CFG buyback-and-burn mechanisms or direct financial distributions—to reflect protocol growth directly in the market value of the token.

​3. Preservation of Core Protocol Utility

The CFG token must retain its fundamental utility across the Centrifuge infrastructure (including transaction settlement, gas/protocol fees, pool management, and staking). The token must not be reduced to a passive, vestigial asset.

​4. Maintenance and Restoration of Governance Rights

Governance rights for CFG holders must remain intact. Non-converting token holders must retain meaningful voting power over protocol parameters, fee structures, and critical ecosystem upgrades.

​5. Optionality of Equity Conversion

Converting CFG to Centrifuge Inc. equity must remain strictly optional. Under no circumstances should token holders be coerced into converting or penalized for opting to remain as token holders.

​6. Long-Term Economic Rights for Non-Converting CFG Holders

CFG token holders who choose not to convert to equity must be explicitly protected. Their long-term economic rights, liquidity access, and financial alignment with protocol revenue must be legally and structurally guaranteed.

​7. Anti-Dilution Safeguards Against Institutional Capital

To protect existing token holders and equity owners from unilateral dilution, robust anti-dilution provisions must be established regarding future institutional fundraises or equity issuances.

​Conclusion

​A healthy protocol requires alignment between equity growth and token utility (a true Dual-Track structure). We strongly urge the team to incorporate these safeguards into an updated draft of CP172 and provide the necessary financial disclosures (including valuation metrics, Cap Table details, and revenue-sharing mechanisms) prior to any on-chain governance vote.

​We invite fellow community members, delegators, and token holders to share their feedback below.

[jagx7]

I would like to see

1. Improved transparency (it’s good but can be better)
2. Cost control
3. Burn mechanism
4. Commitment to limit token sales with visibility that no further token sales are needed.

The current run rate fees are $500k/mo ramping up to $1.5m/mo. If CFG can control costs and start burning tokens it will almost certainly reduce short selling, help drive the token up towards its intrinsic value, and then create a currency (CFG) that can be better used for strategic purposes. Uniswap and others are good examples for implementing burn mechanisms. And Pyth is on its way…

Do the things above, wait until the Clarity Act passes, then decide. Make a commitment to not sell more tokens. Dilution has been a big negative for an otherwise very promosing outlook for growth.

[itsbhaji]

Thanks everyone for the thoughtful questions and feedback here.

We’ve been following the discussion closely, and many of the questions being raised are exactly the ones that need clear answers: the economics of the conversion, cap table, shareholder rights, eligibility, liquidity, what happens to CFG that isn’t converted, and the longer-term implications for holders.

We’re putting together a comprehensive FAQ addressing these directly. Noting this is proposal stage, and some of the information we don’t have yet, but we’ll do our best to share as much as we can.

The goal of the FAQ is to give everyone a much more complete picture before drawing conclusions about the proposal. There will be time to digest the information, ask follow-up questions, and debate the merits before anything moves forward.

[hong]

Bhaji, thank you for the update.

Could you please provide a more specific timeline for when holders can expect the FAQ?

The market is reacting to CP172 right now, and CFG holders are already bearing the consequences of the uncertainty surrounding the proposal. Given that CP172 directly raises fundamental questions about the economic value, shareholder rights, liquidity, eligibility, and ultimately the future of CFG itself, I believe holders deserve more than an open-ended assurance that an FAQ is being prepared.

I understand that some details may still be under discussion. However, even if every answer is not yet available, providing a clear date or at least a target timeframe for the FAQ would go a long way toward restoring some confidence and allowing holders to make informed decisions.

So, when exactly should we expect it?

[cfgcn]

You dropped a half-baked proposal out of nowhere — look at what your recklessness has done to CFG’s price.

[cfgcn]

If you’re going to do an equity conversion, first make sure the CFG token’s value is properly equivalent to the equity — don’t try to use equity to dilute the value of CFG. That would be fraud.
For CFG tokens that remain unconverted, the team should conduct phased buybacks. CFG tokens already converted into equity should be burned — this is the fairest solution. The 3% inflation allocation must also be addressed transparently; there should be no greedy attempts to capture excess value. The community has stood by you for years and endured through everything. We trust that you will not act like robbers, stripping the CFG community of everything it has.

[brave_rabbit_07255]

Thank you for acknowledging the community’s questions and preparing a comprehensive FAQ.

As a long-term CFG holder, I want to say that I understand the strategic reasoning behind exploring a transition from token to equity. Given Centrifuge’s evolution from a crypto protocol into infrastructure serving institutional finance, I can understand why equity may become a more suitable structure for attracting strategic capital and aligning long-term value creation.

My concern is not about whether the equity direction itself is correct. My concern is about existing CFG holders who supported Centrifuge before this transition and may not be able to participate due to eligibility or jurisdictional restrictions.

For holders like me who are willing to convert and continue supporting Centrifuge, but may not qualify under the final conversion requirements, I hope the team can clarify:

• Will all existing CFG holders have a fair opportunity to participate in the conversion?
• How will holders who are unable to convert due to eligibility restrictions be treated?
• Will there be any mechanism to preserve their long-term economic exposure to Centrifuge’s future value creation?

I personally do not necessarily require direct shareholder rights, voting rights, or immediate liquidity. My main concern is that a structural transition from token to equity should not unintentionally disconnect early supporters from the future value they helped build.

If direct equity ownership is not possible for certain holders, I hope the team can consider alternative mechanisms that preserve economic alignment, similar to how tokenized financial products can separate ownership rights from economic exposure.

I appreciate the team taking the time to engage with the community, and I look forward to learning more from the upcoming FAQ.

[344200zz]

​CP172 is a Regressive Betrayal: We Demand a Dual-Track Model and Enhanced Token Utility Like Maple!

​The current sentiment in this forum should be a severe wake-up call to the Centrifuge Foundation. Forced equity conversions, heavy lockups, and draconian KYC/trust structures for retail holders are not “progress”—they are an absolute betrayal of the crypto ethos and the foundational promise made to early backers who bought CFG at $0.36 on the open market.

​While competitors like Maple Finance and Morpho are aggressively capturing market share by empowering their token utility, sharing protocol revenues, and executing buybacks, Centrifuge is attempting to retreat into the dark, outdated world of traditional legacy equity. This is a complete regression.

​Why should long-term retail holders sacrifice liquidity and open transparency just because VC funds with 10-year lockups prefer traditional equity?

​If the Foundation wants to maintain any credibility, you MUST scrap this forced single-track model and immediately adopt a Dual-Track Framework:

1. ​For VC & Institutional Funds: Allow voluntary conversion to tokenized equity for those who want legal equity ownership.
2. ​For Public CFG Token Holders: Respect those who choose to remain on-chain by ENHANCING CFG Token Utility. Retain protocol fee burn/buyback mechanisms, governance power, and gas utility. Do NOT strip away token value!

​We do NOT accept a future where retail holders are pushed into illiquid, opaque trusts while VCs take all the equity upside.

​We expect the Foundation’s upcoming cumulative response to directly address this. Do not force us backward into legacy finance. Respect the crypto community, enhance CFG token utility, and implement the Dual-Track model!

[344200zz]

To the Foundation: Ignoring Retail Means Killing Network Effects and Handing Market Share to Competitors!

​The Foundation seems to mistakenly believe that pleasing a few institutional VC funds at the expense of retail token holders is a safe shortcut. This is a fatal strategic blunder.

1. ​Destruction of Network Effects: Centrifuge’s valuation was built on open-chain liquidity and community adoption. Stripping away token utility transforms CFG from a thriving Decentralized Finance protocol into just another closed, slow-moving legacy SPC.
2. ​Accelerated User & Capital Flight: Crypto liquidity moves instantly. If you force holders into illiquid trust structures, total value locked (TVL), active wallet activity, and community support will permanently migrate to transparent competitors like Maple, Morpho, and Goldfinch.

​Institutions do not build vibrant ecosystems; active crypto communities do. If you destroy retail trust, no institutional deal will save a protocol with zero on-chain liquidity.

​Reconsider CP172 immediately, protect CFG token utility, and implement the Dual-Track Framework before it is too late!

[Novciu]

Thank you for acknowledging the community. However, admitting that you published a proposal of this magnitude without basic answers regarding liquidity, shareholder rights, or compliance is incredibly unprofessional. You didn’t just drop a “proposal” for debate; you dropped a bomb that wiped out millions of dollars from public holders in days due to the chaos and uncertainty your team created. Was dropping a half-baked plan to crush the token value a deliberate move to serve your own needs? You knew exactly what the market impact of such a statement would be.

Let’s be transparent: for years, you enjoyed the benefits of the crypto market. You printed tokens, diluted retail holders, distributed them to your partners, and liquidated them for your own financial gain and corporate salaries. The token was nothing but a tool for you to extract wealth. By trying to abandon it now without delivering any value-accrual, you are proving that this was a calculated mechanism to systematically dump tokens for purely financial benefits.

Fortunately, every single move you made is permanently recorded on the blockchain, and your historical promises are documented on this forum. If you abandon the token now, it will be viewed as a blatant corporate fraud and a rug pull of the public market. We do not need a vague FAQ to “give us a picture” later. We need a clear commitment right now that the token will not be abandoned and that public holders will not be forced to take a loss for your corporate greed. If you want to move to a TradFi model, you must clear your public liabilities first.

[Novciu]

So the question about CP172 isn’t “if” but “when” it will be implemented? Do you even know what you are doing? So many questions, yet zero answers. What about CP171? Investors were buying $CFG based on your official promises – how can you just break them like this?

Furthermore, how can a company operating in the crypto space, aiming to bridge both worlds, think about abandoning its own token instead of finally developing it after all these years? It is completely incomprehensible how you are behaving. Throwing something like this on the forum without any prior explanation is a massive middle finger to the entire community.

And to end it all, you offer no concrete answers, just a generic corporate formula basically telling us to back off. All I feel right now is immense disappointment.

Your job was to figure out how to drive value to the token, not how to get rid of it! You want to be listed on a traditional stock exchange? Fine, then do it through the token. Connect your revenue mechanism with a buyback-and-burn model to reduce inflation and introduce deflationary mechanics.

For years, you were supposed to implement utility not just for the protocol, but for the token itself. You have done absolutely nothing on that front.
If your ultimate goal is traditional stock exchange exposure and institutional compliance, running away from the crypto market is not the only option. There are viable, legally compliant hybrid structures that integrate public tokens with legacy equity without destroying public market liquidity:

1. Tokenized Equity Structure: Mirroring traditional corporate shares 1:1 on a public blockchain as digital stock certificates. This allows legacy compliance while merging TradFi and DeFi liquidity instead of segregating them.
2. Corporate Buyback Integration: Operating Centrifuge Inc. as a standard publicly listed entity, but legally mandating a significant portion of corporate revenues to fund aggressive market buyback-and-burn programs for the $CFG token.
3. Dual-Asset Value Capture: Establishing a split revenue-share model via smart contracts where 50% of protocol fees capture value directly for $CFG holders via deflationary mechanics or staking, while the other 50% funds traditional equity dividends.

You chose the most hostile, lazy, and extractionary path possible: completely cutting off the token, moving 100% of the value capture to a private corporate entity, and leaving early believers with illiquid, restricted paper in the Caymans. Do not tell us that equity conversion is the only path forward when functional hybrid models exist.

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[sandbun]

I have not much experience with proposals like this, but one thing seems strange to me: although the market and 90% of the holders seem to be sceptical towards this move, you seem to be confident that in the end cp 172 will be passed. Then why are we discussing it? Why don’t you consider other value accrual mechanisms, such as automatic burns and buy backs (e.g. Maple Finance or Pendle models)? It seems that community opinion is eventually not important to you, at all

[Novciu]

Exactly. For you, this isn’t a discussion about “if” we should change, but “how” to force it. Meanwhile, none of us signed up to own legacy stock exchange equity. This project was built on crypto from day one, meant to bridge both worlds. Instead, we are being abandoned. Your explanation? “Longer-term development.” It just sounds like sweeping the real problems under the rug.

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[344200zz]

​Hi @jagx7, @Marcin, and fellow holders,
​I completely agree with your points regarding the Foundation’s critical flaw in ignoring retail holders and token utility. I also left comments (#54, #55) demanding a Dual-Track Framework to protect CFG value and force accountability on the team.
​Individual retail voices might be easy for them to ignore, but our unified opposition cannot be brushed aside. Let’s stand together and keep pushing the Foundation for a fair solution, transparent tokenomics, and actual token buyback/burn mechanisms before RFC closes.
​We need to hold the line together!

2026년 8월 21일 (금) 오후 2:41, Marcin <notifications@centrifuge1.discoursemail.com>님이 작성:

[Novciu]

The future of the project means tying it to traditional funds when the entire global market is moving toward digital tokenization? Are you moving backward to the Stone Age?

You spent years developing a Real World Asset (RWA) project within the crypto space, only for CP172 to announce a complete 180-degree reversal. What on earth is this?

And why is the community so quiet? People, do you see what is happening here? React! We cannot just allow these decisions to slide. Even if you think we have little power, we must at least show them that we are not as naive as they think. They are putting on white gloves and forcing $CFG into a state of dementia.

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