RFC: AIR to CFG Token Swap Post-Altair Chain Deprecation

Altair Governance
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Title: Proposal for AIR to CFG Token Swap Post-Altair Chain Deprecation
Authors: TheMarcus
Date Proposed: July 23, 2025
Status: Request for Comments (RFC)
Related Proposals: CP149, CP141, Altair Chain Deprecation Proposal

Short Summary

This proposal outlines a fair and equitable mechanism for swapping Altair (AIR) tokens to Centrifuge (CFG) tokens as part of the deprecation of the Altair chain on Kusama and the migration of Centrifuge’s governance and operations to Ethereum. The goal is to protect AIR token holders’ value, maintain community trust, and align with Centrifuge’s transition to an EVM-based protocol. The proposed exchange rate is 100 AIR to 1 CFG, based on market data, token utility, and community feedback, with the assumption that Treasury-held AIR tokens will be burned.

Background

Centrifuge has successfully migrated its governance token (CFG) to Ethereum as part of CP149, consolidating legacy CFG and Wrapped CFG (WCFG) into a single ERC-20 CFG token with a post-migration total supply of 675,000,000 CFG (including 115M newly minted tokens for strategic initiatives). The Altair chain, operating on Kusama, is proposed for deprecation, rendering the AIR token obsolete in its current form due to its primary use for transaction fees and governance on the Altair chain. This creates significant sell pressure on AIR and negligible buy pressure, risking value loss for AIR holders.

The community has expressed interest in an AIR to CFG token swap to preserve value for AIR holders, as discussed in the RFC for an AIR to CFG Token Swap. This proposal builds on that discussion, incorporating market data, token economics, and community sentiment to propose a fair exchange rate.

Proposed Exchange Rate: 100 AIR to 1 CFG

The proposed exchange rate of 100 AIR to 1 CFG is derived from a combination of market-based valuation, token utility analysis, and community considerations. Below is the rationale:

  • Market-Based Valuation:

    • As of July 23, 2025, the price of CFG is approximately $0.24 USD (CoinMarketCap,), while AIR’s price is approximately $0.0024 USD (CoinGecko, Altair). This results in a market price ratio of approximately 100:1 (AIR:CFG).

    • Historical price ratios from CoinGecko data (2023–2025) show AIR trading at 1–2% of CFG’s value, supporting a 100:1 exchange rate as a fair reflection of market dynamics.

    • The market cap of AIR is significantly lower than CFG’s due to its limited utility and smaller ecosystem. As of recent data, AIR’s circulating supply is approximately 495,000,000 AIR (CoinGecko, Altair), with a market cap of ~$1.19M, compared to CFG’s ~$162M market cap (675M CFG at $0.24).

  • Token Utility and Ecosystem Role:

    • CFG is the governance and utility token for the Centrifuge protocol, now fully EVM-based, used for transaction fees, governance, and incentivizing liquidity providers on Tinlake. Its utility spans the entire Centrifuge ecosystem, including Centrifuge V3’s multi-chain capabilities (CP141).

    • AIR’s primary utility was tied to the Altair chain for transaction fees and governance. With the Altair chain’s proposed deprecation, AIR’s utility is effectively nullified, justifying a swap to CFG to maintain holder value.

    • The 100:1 ratio accounts for CFG’s broader utility and higher demand in the EVM ecosystem, while ensuring AIR holders receive a fair portion of the new protocol’s governance and utility token.

  • Community Feedback:

    • Comments on the RFC for an AIR to CFG Token Swap (https://gov.centrifuge.io/t/rfc-air-to-cfg-token-swap-post-migration) highlight community concerns about fairness and the need to protect AIR holders. Suggestions included ratios ranging from 50:1 to 200:1, with some advocating for a market-based approach and others emphasizing simplicity.

    • A 100:1 ratio was frequently mentioned as a balanced compromise, aligning with market prices while being easy to communicate and implement.

  • Treasury Burn Consideration:

    • Per the proposal’s assumption, Treasury-held AIR tokens will be burned and excluded from the swap. This reduces the circulating AIR supply, potentially increasing the value of remaining AIR tokens and simplifying the swap process. Assuming ~50% of AIR tokens are held by the Treasury (a conservative estimate based on typical Polkadot/Kusama project distributions), the effective circulating supply for the swap is ~247,500,000 AIR.

  • Impact on CFG Supply:

    • Swapping 247,500,000 AIR at a 100:1 ratio would result in ~2,475,000 new CFG tokens issued (0.37% of the post-migration CFG supply of 675M). This is a minimal dilution, ensuring the swap does not significantly impact CFG holders’ value or governance power.

    • The 115M newly minted CFG tokens for strategic initiatives (CP149) provide a buffer for such integrations, supporting the feasibility of this swap without additional minting.

Swap Mechanism

  • Eligibility:

    • All AIR token holders, excluding Treasury holdings, are eligible to participate in the swap.

    • Holders must verify ownership of AIR tokens via a Kusama-compatible wallet (e.g., Polkadot.js, Subwallet).

  • Swap Process:

    • A dedicated EVM-based smart contract will be deployed on Ethereum, similar to the CFG/WCFG migration contract (address: 0xacf3c07bebd65d5f7d86bc0bc716026a0c523069,).

    • Users connect their Kusama wallet holding AIR and an EVM-based wallet (e.g., MetaMask) to receive CFG.

    • The swap ratio is fixed at 100 AIR = 1 CFG, with no fees charged to participants.

    • The process will be atomic, ensuring instant CFG delivery upon AIR submission, with a processing time of up to 1 hour (similar to CFG migration).

  • Timeline:

    • Swap window opens 30 days after governance approval and closes 6 months later to allow ample time for participation.

    • Unswapped AIR tokens will become obsolete upon Altair chain deprecation (expected Q4 2025).

  • Treasury Burn:

    • Treasury-held AIR tokens will be burned prior to the swap window to reduce circulating supply and prevent governance manipulation.

    • A transparent on-chain transaction will verify the burn.

  • Support:

Benefits

  • For AIR Holders: Preserves value by converting obsolete AIR tokens into CFG, enabling participation in Centrifuge’s EVM-based governance and ecosystem.

  • For CFG Holders: Minimal dilution (0.37% of total supply) ensures existing governance power is largely unaffected.

  • For the Centrifuge Ecosystem: Strengthens community trust by addressing AIR holders’ concerns, aligns incentives with the EVM transition, and simplifies tokenomics by consolidating to a single token.

  • For Governance: Maintains decentralized control by allowing AIR holders to transition into CFG-based governance, ensuring broad participation in Centrifuge V3.

Risks and Mitigations

  • Risk: Market volatility could alter the perceived fairness of the 100:1 ratio.

    • Mitigation: The ratio is based on a 6-month average price ratio (2025 data) to smooth out short-term fluctuations. A review mechanism can be included to adjust the ratio if significant price divergence occurs before the swap window opens.

  • Risk: Low participation could leave some AIR holders with obsolete tokens.

    • Mitigation: Extensive community outreach, clear instructions, and a 6-month swap window will maximize participation.

  • Risk: Technical issues with the swap contract.

    • Mitigation: Leverage the proven CFG/WCFG migration contract framework, with audits and testing prior to deployment.

Community Feedback Requested

  • Is the 100:1 ratio fair, or should alternative ratios (e.g., 50:1, 150:1) be considered based on additional metrics?

  • Should the swap include a vesting period for CFG tokens to prevent immediate sell pressure?

  • Are there additional support mechanisms needed to ensure a smooth transition for AIR holders?

Conclusion

The proposed 100 AIR to 1 CFG swap offers a fair and equitable solution for AIR holders, aligning with market valuations, token utility, and community sentiment. By implementing a transparent, EVM-based swap mechanism and burning Treasury-held AIR, Centrifuge can maintain trust, minimize dilution, and fully transition to its Ethereum-based future. This proposal invites community feedback to refine the approach before moving to an on-chain vote.

References:

This proposal aims to balance fairness, simplicity, and ecosystem alignment. Please provide feedback on the Centrifuge Governance Forum to refine this RFC before it proceeds to an on-chain vote.

1 Like
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Hi @TheMarcus
Thank you for posting this proposal.
I have a question:

  • Is this proposal for Altair Community and AIR token holder or this is a proposal for Centrifuge Token Holders and Centrifuge DAO?
3

Both?

I mean it involves AIR token (thus Altair Community) and CFG token (thus Centrifuge community/DAO). So presumably everyone would have to agree on such a proposal.

4

Hi @TheMarcus
Just for your information. AIR token holders can not decide on behalf of CFG DAO and CFG token holders.

If this proposal is intended for AIR token holders, I have nothing to say, as Altair has never approved the Altair Gov Process.

Best.

1 Like
5

Thank you for putting this together. It would be great if we came to an agreement and make use of the AIR token.

6

Makes sense. As such, this proposal (once RFC ends) should be submitted to the CFG DAO for voting.