Centrifuge (CFG) declined more than 14% in the past 24 hours, extending the double-digit decline in market cap over the past week. According to reports from AMBCrypto, the daily trading volume increased, supporting the selling pressure experienced across multiple altcoins. However, the sharper decline in CFG points to coin-specific weakness within its real-world asset (RWA) niche, compounded by recent governance developments that have introduced fundamental uncertainty into the project's future direction.
As per data from Token Terminal, Centrifuge's RWA activity declined significantly across multiple metrics. The Monthly Asset Transfer Volume on the chain fell by 10%, with this week alone decreasing from a peak of $11.67 million to $281K, indicating very low usage of the ecosystem in the RWA sector. Additionally, the Monthly Asset Transfer Count lost more than 58% of its share, with this count plummeting from 6.7K to 2.2K since the start of August, representing a 67% loss.
On August 18, Centrifuge released governance proposal CP172, exploring a significant reversal from its previous token-centric model. The proposal allows eligible CFG holders to convert tokens into shares of Centrifuge Inc. at a 1:1 ratio, marking a fundamental shift from the traditional token utility model. This governance process remains in the RFC stage until around September 1, 2026, ensuring continued debate and potential price swings as the community weighs the implications of this equity conversion proposal.
According to reports from AMBCrypto, the Centrifuge ecosystem saw net USD outflows of more than $2.25 million. The Total Value Locked (TVL) was flat at around $1.709 billion after a sharp drop from its highs when the RWA narrative was thriving. In April, CFG's TVL was above the $2 billion mark, highlighting the significant decline from peak performance levels. Despite positive ecosystem developments like the recent launch of Liquid Lane on August 19, which provides instant USDC redemptions for $1.6B in tokenized funds, the negative sentiment from the equity conversion proposal has overshadowed these fundamentally positive developments.
