Centrifuge’s tokenized funds lost 40% of their assets in the third quarter of 2026, yet total fund fee income still rose 2.8% to $1.35 million, according to a report by Alea Research. The report said the increase did not benefit CFG holders, because the fees are paid in full to the funds’ management side rather than to the governance token.
The report, written by Alea Research and translated by TechFlow, examined Centrifuge’s assets under management, fee structure, institutional reallocations, and the governance debate around proposal CP172.
Fee income rose even as average fund size declined
Alea Research said Centrifuge funds generated more fee income per dollar of assets in the third quarter. Average total fund size fell 9% during the period, but aggregate fund fees still increased 2.8%.
The shift came from changes in the asset mix. USDe issuer Ethena had previously built up a large position in JAAA, an AAA-rated collateralized loan obligation fund. JAAA charges a 0.50% annual management fee, double the 0.25% charged by short-term Treasury fund JTRSY.
According to the report, the move toward JAAA added $145,000 in fee income, fully offsetting the $123,000 hit caused by lower asset balances. JAAA contributed 22 basis points to the overall fee rate in Q3, up from 15 basis points in Q2.
Measured by revenue per dollar of fund AUM, Centrifuge funds earned 39 basis points on average in the third quarter. That ranked second among six fund issuers in the report that generated revenue, well above the 23-basis-point median for the other five.
Withdrawals by Grove and Ethena pushed assets down to $931 million
The report’s key figures showed that Centrifuge fund assets fell to $931 million in the third quarter after Grove, the core capital allocator for the Sky stablecoin protocol, cut exposure to Treasury funds and Ethena redeemed most of its JAAA position.
For comparison, the median AUM change for 13 other tokenized fund issuers in the quarter was -0.2%. Centrifuge’s share of total AUM across seven issuers also dropped from 11.2% to 6.5% during Q3.
Excluding Grove and Ethena, holdings by independent external investors increased 45% to $131 million. The number of addresses with positions above $1,000 rose from 58 to 81. JAAA on Aave Horizon accounted for $32.9 million of that increase.
Grove kept JAAA while Ethena cut the higher-fee fund
Alea Research said the change in fee income closely tracked Grove’s portfolio rotation. Grove reduced Treasury fund exposure across issuers while keeping its credit allocation in place.
Between June 30 and Sept. 30, 2026, Grove retained only 36% of its original JTRSY position and 17% of its BUIDL position, while its JAAA holdings stayed at $394 million. Cash pulled from those positions was redirected into a warehouse lending facility with Galaxy and into a Morpho vault.
For Centrifuge, that meant lower-fee capital left while higher-fee capital remained.
Ethena’s move had the opposite effect on the fee mix. The report said Ethena redeemed a total of $200 million of JAAA on Sept. 21 and 22. From Sept. 23 onward, its position stood at $105 million.
During that period, USDe supply did not contract. The report said Ethena shifted the capital into institutional lending, where its backing size expanded from $508 million to $686 million between Sept. 14 and Oct. 20.
CFG holders still have no claim on fund management fees
The report said Centrifuge’s stronger unit economics do not translate into cash flow for CFG holders.
Anemoy, set up to develop Centrifuge’s fund business, acts as the investment manager for the largest funds. Janus Henderson serves as investment adviser for JTRSY and JAAA. All management fees go to those two entities, and the fund terms do not disclose any revenue-sharing ratio. CFG holders have no access to that income.
The report’s summary section stated that the full $1.35 million in third-quarter fund fees went to the management teams of the funds, with nothing allocated to CFG holders.
In peer comparisons, Treasury funds from Spiko, Superstate, and BlackRock’s BUIDL generated only 16 to 24 basis points, while Centrifuge’s higher fee rate was explained by its credit funds.
CP172 passed, but fee rights remain legally unclear
The community has approved restructuring proposal CP172. Alea Research said the measure passed with 98.5% support, and turnout reached 10.6% of CFG circulating supply. The proposal would allow 1 CFG to be exchanged for 1 share of Centrifuge, Inc.
According to the report, Centrifuge, Inc. is intended to wholly own all subsidiaries in the group. Even so, no legal document has yet confirmed that the company is entitled to receive fund management fee income.
The report also pointed to an earlier attempt. CP162, proposed in August 2025, sought to route Anemoy fees to the foundation, but it failed to reach quorum and expired on Sept. 18, 2025.
Replacing lost revenue would require new inflows
Based on asset balances as of Sept. 30, the report estimated current annualized fee income at about $3.81 million, down 29% from the third-quarter annualized run rate of $5.34 million.
To recover that gap, Alea Research estimated that Centrifuge would need about $307 million in new JAAA subscriptions, equal to 1.2 times Ethena’s June allocation size, or $614 million in new JTRSY subscriptions.
As of Oct. 1, Grove’s Basin liquidity pool held $100 million for instant redemptions by JTRSY holders. A later Grove governance vote approved a $1.5 billion cap. The report said Basin can provide immediate liquidity and retire repurchased shares, but it does not generate additional management fees.
Another change came from Aave. On Oct. 17, Aave raised the loan-to-value ratio for JAAA on Horizon from 81% to 87%. The report said that if JAAA yield remains above borrowing costs, the higher LTV can improve returns for looped leveraged holders.
Alea Research said its overall view remained constructive. Even after the exit of two major capital providers, total fund income still increased because the remaining capital stayed concentrated in credit assets with unit yields roughly double those of Treasury exposure. The report said the fourth-quarter picture will become clearer on Dec. 31: if the weighted average fee rate stays above the third-quarter level of 37 basis points, the shift toward higher-fee credit assets will have held.
