[FIP - 308] Onboard Frax to Centrifuge Prime

The Centrifuge team would like to present the following proposal for feedback from the Frax community.

WIth the upcoming launch of FXBs in 2024, we see a huge a opportunity to leverage RWAs to maximum benefit of the protocol. We believe Centrifuge Prime could be a strong complimentary structure to existing RWA efforts through FinRes.


Centrifuge team

Executive Summary

This is a proposal to onboard the Frax protocol to Centrifuge Prime, for the purposes of contributing to a differentiated and resilient RWA capability within FraxDAO. Onboarding to Centrifuge Prime will create a dedicated pipeline of resources and assets to serve the Frax protocol. If accepted, this proposal will establish a debt ceiling of $20M to be established for the Anemoy LTF, a BVI registered and regulated US Treasury fund.

Centrifuge has a long track record of working with DAOs to bring RWAs on as collateral. Notable firsts include minting MakerDAO’s first real-world asset, structuring the first on chain securitization, launching the RWA Market with Aave, and partnering with BlockTower to bring the first credit fund operations on chain. Centrifuge Prime is built for the needs of large decentralized organizations. It provides the infrastructure and services to quickly and easily onboard and scale a fully diversified portfolio of real-world assets. Through Centrifuge Prime, decentralized organizations can get access to an institutional ecosystem of RWA partners and service providers to curate a portfolio of assets across their desired risk profiles.

Centrifuge is a DAO-governed protocol. k/factory contributes to the Centrifuge protocol by providing development, and infrastructure, and working with users to ensure adoption.


This proposal will:

  1. Work with FraxDAO to establish a legal conduit for RWA investments
  2. Allocate to $20M of collateral to the Anemoy Liquid Treasury Fund
  3. Facilitate diversified and relevant investment opportunities for Frax

The Legal Conduit

Centrifuge Prime utilizes a legal framework to provide an effective and resilient setup for RWA investments. We have collaborated with Frax community members on this framework, and this proposal will seek to use the protocols existing infrastructure for facilitating these investments.

A descriptive diagram of the Centrifuge Prime legal framework is included below for reference.

This framework is based on our extensive experience in MakerDAO setting up similar structures. There, the same structure supports a >$1B in deployed capital.

Anemoy LTF

The Anemoy LTF is a purpose-built onchain offering combining lowest possible credit risk with fast liquidity and low fees. Centrifuge as the tokenization and issuance protocol offers a programmable DeFi-native integration.

The LTF provides an onchain RWA product that offers:

  • Real-time transparency: Each position in the portfolio is tokenized and represented onchain, allowing for near real-time transparency into the portfolio’s overall status. Integrations with price oracles, onchain verifications, and programmable execution will allow this to be the most transparent product in the market today.
  • Legal recourse and investor protection: The offered token is an actual fund share using the ability to tokenize a fund under BVI law. The token itself represents ownership and not only the accompanying legal framework. Token holders have direct claims to the underlying assets in the fund, (US Treasury bills) and an ability to request a redemption in-kind to receive actual T-Bills. The combination of owning a share of a BVI-regulated fund with all AUM held with a regulated US custodian and traded through a registered US prime broker offers investors the highest-quality recourse and protection. Low fees: Unlike most other offerings, the fund holds T-Bills directly in its own account, saving investors fees charged by the ETF issuers or other intermediaries.

More information on Anemoy and the LTF can be found here.

Diversified Investment Opportunities

Centrifuge Prime also provides dedicated access to the Centrifuge ecosystem and community. As part of this proposal, the Centrifuge team will work directly with the community to ensure that the available RWA portfolio meets Frax’s needs.

The Centrifuge Credit Group, a DAO entity setup to provide risk and credit analysis, can be utilized to provide general-purpose reporting for the assets invested. This provides an additional level of ongoing monitoring and independent analysis that Frax can utilize.

Beyond US treasuries, the Centrifuge Prime setup would also allow the Frax DAO to allocate into the following asset classes:

Bucket Focus Description Targeted Returns Liquidity Thresholds
Liquidity Lowest risk while maintaining US Treasuries, MMF, AA+ rated short term bonds 5-6% Daily
Preservation Investments in senior secured loans such as real estate, corporate bonds etc. 6-8% 3-6 months
Acceleration Trade finance, non-bank originators, emerging markets 8-20% 3-24mo

Pricing and payment

The pricing for this proposal is structured to streamline fees. The usage of FXS as a reward helps to align incentives towards long-term interests versus short-term benefits. The fee structure is as follows:

Portfolio Fee 0.35% p.a. on assets in Prime up to $50M, 0.2% $50-100M, 0.1% >$100M Paid on an ongoing basis to Centrifuge
Frax Rewards 5000 FXS, paid incrementally over 12 months into the Centrifuge treasury, starting with the first $1M Deployment into Centrifuge Prime To cover costs of resource and facilitation time. Centrifuge DAO intends for this to create better alignment with strong skin in the game incentives for success.


  • For: Support for onboarding the Frax protocol to Centrifuge Prime with mentioned fees and rewards.
  • Against: Do nothing.

Snapshot voting: [FIP - 308] Onboard Frax to Centrifuge Prime


Not concerning Centrigure specifically but what will Frax do with such a conduit to RWA operations? Things that can’t be done through FinResPBC? I presume the vision of Frax is not to invest in more risky RWA such as real estate.

They are simply tools that the protocol can take advantage of. The conduit is specifically an offshore company so would be able to access non-US investment opportunities. Depending on the specifics of the structure as its established or developed, there can be additional comparative differences as well.

Ultimatley, Frax will need to build out adaptive and resilient infrastructure, and I see the conduit as a successful means of adding to it’s capabilities.

We’ve been putting a lot of thought into what the best assets and approach for Frax should be, especially when cosnidering the mechanics of FXBs. For now, we see that the goal for Frax should be to allocate to the best risk-adjusted yields within the spectrum of low-risk asset classes. Depending on the lock-up and market treatment of upcoming FXB issues, there is some variety that can be considered outside of treasury bills as well.

As the market environment changes as well, Frax will need an RWA capability that can access a diverse source of assets and managers in order to react effectively. We believe Centrifuge can contribute most to this latter point.


The Centrifuge team is excited to push this proposal to a vote.

We are looking forward to hearing from the community and the chance to collaborate together!


Stake Capital is highly supportive of this proposal. To us, this is more about bringing into Frax a capital market rail necessary to building further financial utility around asset and flow operations built and to be built on top of Frax, than it is about bringing a “yield pool”.

1 Like

Hi everyone! We have been working hard with the Centrifuge team to enable the next wave of onchain solutions. With this proposal live, we’re excited to further engage the Frax community and explore opportunities in RWAs together.

Please refer to our full disclaimers here

1 Like

A big thanks to the Frax community for the support shown in our proposal! We are incredibly excited to start building here together.

We will begin working on next-steps and will share regular updates with the community as we go!