BlocksInform
Centrifugal, a decentralized protocol operating as a lender, would face a tightening of liquidity, with loans secured in the amount of about $5.8 million being followed as platform debt.
Whereas centrifugal is described as a chain ecosystem for structured lending with direct guarantee from real assets, the data of blockchain credit analytics platform real-world assets dashboard (rwa.xyz) reveal a rather worrisome signal: the debts on the centrifuge platform have accumulated, with assets including loans for consumption, invoices, and the financing of commercial claims.
Centrifuge's own dashboard details this, and the protocol's maintainers have also confirmed the crisis. However, taking into account how the centrifuge is constructed as an autonomous decentralized organization (dao), its representatives do not have any hierarchy and do not participate directly in transactions between investors and asset initiators.
The platform itself functions as a credit market for lenders and borrowers, performing transactions through an intelligent contract. Interested asset initiators are able to execute traditional assets such as mortgages, bills or consumer credit, allowing users to place them as security for financing with qualified investors. However, there is one problem: it is not free, and an interest payment is fixed in accordance with the general liquidity situation of the market. From the very beginning, centrifugal became a popular challenge platform with more than 130 million dollars registered for its tvl (total value locked), ranking among the largest of its competitors in the industry for blockchain lending in the real world.
These loans not repaid could constitute a major wind against the distrust, and centrifuge may need to return to its challenging roots if it wants to keep its platform liquid. The challenge space must remain vigilant to ensure that their protocols remain transparent and secure, especially when taking into account the financial value of the space.
The main competition for the centrifuge, sugar and truefi protocol, be indebted as well, in part because of the exposure and correlation with the now extinct FTX swap, as well as interlinked loans related to three capital arrows. Several well-known borrowers in the deficit sector have since declared their loans insolvent and defaulted.
Centrifuge loans are separate from other debt crisis loan protocols because of the platform's promise of immunity against crypto market volatility. But as these reports suggest, that may not be the case any more.
