Image default

Decentralized Lending Protocol Centrifuge Accrues $6M Unpaid Debt

Facebook iconLinkedin iconTwitter iconWikimedia Commons

(Wikimedia Commons)

Consensus 2023 LogoJoin the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.Secure Your SeatFacebook iconLinkedin iconTwitter iconConsensus 2023 LogoJoin the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.Secure Your Seat

Some $5.8 million of loans in two lending pools are overdue on the decentralized lending protocol Centrifuge, according to data by blockchain credit analytics platform

The distressed debt includes consumer loans and invoice and trade receivables financing, per Centrifuge’s loan dashboard.

Centrifuge, led by a decentralized autonomous organization (DAO), acts as a credit marketplace between lenders and borrowers and relies on blockchain technology and decentralized finance (DeFi). Asset originators can turn their traditional, non-crypto assets such as mortgages, invoices or consumer credit into non-fungible tokens (NFT) and use them as collateral to get financing from accredited investors for an interest payment. The protocol has grown to one of the largest blockchain-based real-world asset lending platforms with some $130 million of total value locked on it.

Centrifuge confirmed the distressed debt in an email, but the protocol’s representatives are not involved in discussions between investors and asset originators.

The unpaid loans on Centrifuge stand out among other debt-ridden lending protocols in that loans originated on the platform are supposed to be separated from crypto market turmoil.

Rival lending platforms such as Maple and TrueFi accrued bad debt last year because primarily digital asset trading firms and market makers used the protocols to borrow cryptocurrency without minimal collateral to finance their operations. As the crypto market crashed in 2022 taking some high-profile casualties, including hedge fund Three Arrows Capital and FTX-corporate sibling quant shop Alameda Research, multiple borrowers became insolvent and defaulted on loans.

Read more: The Risks and Benefits of On-Chain Credit Protocols

The most distressed lending pool on Centrifuge provides capital to 1754 Factory to buy bonds backed by short-term capital advances and microloans to French customers on the Bling fintech application. All 16 active loans in the pool worth some $5.1 million are past the deadline to repay, with some loans being more than 150 days late on payment, data on shows.

1754 told CoinDesk that it “is currently liquidating its assets off-chain and engaged in negotiations with borrowers for repayments.” The lending pool is set to unwind, and investors may redeem “in the near future,” the firm added.

Another pool, which payments firm Alternative Payments uses to finance invoices and accounts receivable for businesses, has some $650,000 of loans with missed payment out of the $6.4 million outstanding. Alternative has not returned CoinDesk’s request for comment by press time.

Centrifuge’s loan dashboard also shows there are four loans worth $3.3 million late with payment in its REIF pool, which provides capital to finance commercial real estate mortgages. However, REIF Financial Investments, which is an investment company that focuses on commercial real estate acquisitions, said in an email that all loans had an option to extend with an additional 12 months, thus avoiding default. The firm added that it contacted Centrifuge to update the dashboard.


Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.

Trending1Markets Daily Podcast CoverMarkets Daily Crypto RoundupWeekend Story | Better Policy Can Turn NFTs Into an Intellectual Property PowerhouseFeb 5, 20232CDCROP: The HASH Podcast GraphicCoinDesk Podcast NetworkHeadlines: Top Stories of the Week 01-30-23Feb 4, 20233(Malcolm P Chapman/Getty Images, modified by CoinDesk)The Breakdown, With NLWThe Tragedy of Lebanon’s Currency DevaluationFeb 4, 20234Markets Daily Podcast CoverMarkets Daily Crypto RoundupWeekend Story | Regulatory Clarity? Financial Watchdogs Could Not Be More ClearFeb 4, 2023


Related posts

Pepe Coin’s Top Bull Also Has Millions in Shiba Inu, but Holdings Suggest Risk for Traders

Blake Goodwin

Ether’s Post-Shanghai Rally Knocks Bitcoin Dominance From 21-Month High

Blake Goodwin

Ethereum’s Upcoming Shanghai Upgrade Powers Lido DAO, SWISE, RPL Tokens Higher

Blake Goodwin

Leave a Comment