How does Centrifuge break through the cognitive bottleneck of DeFi: A look at the present from ETF history

DeFi is at a historic turning point. This is not just wishful thinking from industry insiders, but a calm judgment from seasoned professionals who have been deeply involved in traditional finance for 20 years. Centrifuge’s new Chief Operating Officer Jürgen Blumberg uses an interesting analogy to explain everything—DeFi is like ETFs in the early 1990s; it may seem risky, but it actually contains the power to rewrite the entire financial system.

Misunderstood DeFi: Finding Answers in History

What is the impression of DeFi among many traditional finance professionals? High volatility, high risk, untrustworthy. But how accurate is this assessment?

Blumberg’s career experience provides a reference framework. He has personally witnessed the entire process of ETFs moving from the fringe to the mainstream—from Goldman Sachs and Invesco to BlackRock, he has seen how this new trading instrument surpassed mutual funds in 15 years to become a dominant force in global capital markets. ETFs also faced skepticism in their early days. Dispersed trading, complex mechanisms, difficult-to-control risks—these were common complaints about ETFs.

Isn’t DeFi similar today? Most misconceptions about DeFi products like P2P lending stem from a lack of understanding of new mechanisms. Some say token prices are highly volatile, but ignore the continuous growth of TVL (Total Value Locked). Others claim DeFi lacks transparency, but overlook the fully auditable on-chain data.

Ending Misconceptions About P2P Lending and DeFi

A deeper look into how DeFi operates reveals that its underlying principles are actually consistent with traditional finance. Liquidity pools are just trading venues, derivatives exist in DeFi just as they do elsewhere, only with different names. The concept of TVL corresponds to AUM (Assets Under Management), and risk control mechanisms are just as rigorous—only the participants’ identities have changed.

“24/7 market access without interruption, transparent and controllable costs—these are not gimmicks but genuine structural advantages,” Blumberg points out. This is the biggest misconception about DeFi—that it is a strange opponent to traditional finance, rather than an evolved version.

Tokenization Layers: Not All Tokens Are the Same

Another key misconception involves the quality differences among tokenized products. Just as the early ETF market had its good and bad players, the token world has also differentiated—derivative structured tokens (bearing risk) versus fully backed fund-type tokens (directly mapped to assets).

Centrifuge’s approach is the latter—completely backed by real assets, RWA (Real-World Asset) tokens. This means holders gain direct ownership of the underlying assets, not some financial derivative. This distinction is crucial but often confused.

Regulatory Race and DeFi’s Geopolitical Landscape

Regulatory attitudes worldwide are shifting. The US remains a leader, but Europe is not to be outdone—Luxembourg, the EU’s MiCA framework, Switzerland are all vying for the high ground of innovation policies. Asia’s Hong Kong and Singapore are also cautiously but firmly advancing.

This “controlled innovation” competition sends a signal: DeFi has evolved from an object of regulatory caution to an emerging industry worth competing for. For platforms like Centrifuge, this creates unprecedented expansion opportunities.

Data Speaks: Centrifuge’s Growth Trajectory

Real data supports this optimism. Centrifuge is approaching the $1 billion TVL milestone. The CFG token is currently trading at $0.13, with a circulating market cap of $75.15 million. More importantly, collaborations with institutions like S&P Global are about to launch, signaling the official entry of traditional financial giants.

From this perspective, Blumberg’s move from traditional finance giants to a DeFi startup is not gambling but a well-founded choice at a historic turning point. True disruptive innovation often comes from the entrepreneurial ecosystem, not vested interests.

The “ETF moment” for DeFi has arrived, and many misconceptions about it are being shattered by reality.