Tokenize, Trade, Expand: The Figure Thesis

Overview

Figure Technologies is a fintech lending platform founded in 2018 by Mike Cagney (former CEO of SoFi) and June Ou. The company’s mission is to “change capital markets with blockchain” by bringing real, measurable use cases to market. Figure began by focusing on home equity lines of credit (HELOCs) and has since expanded into broader consumer, insurance, and real estate credit products. Its platform leverages the Provenance Blockchain, which Figure created, to reduce costs and increase speed in lending and loan trading.

There is a need for a one-stop capital markets platform that provides solutions from asset origination to asset exchange. The industry currently operates via disparate, legacy approaches to consumer credit asset origination and funding and trading of those assets. These approaches are manual, time-consuming, expensive, error-prone, and are unable to fully access market funding potential. Similarly, the legacy asset transfer process is paper-intensive, presents several burdens associated with manual assignments and document management, and relies heavily upon conventional loan-tracking databases, which are also error-prone. In this arena, Figure’s value proposition is speed, convenience, and better pricing, enabled by its cost advantages. On the back end, Figure is a platform for loan investors, offering whole loans and securitizations through a blockchain marketplace. Over 170 banks, credit unions, and fintechs have partnered with Figure, and it has tokenized over $17.5B of real-world assets. Its broader mission is to become the “premier vertically integrated capital markets trading platform for consumer assets”. 

Provenance

All loans and transactions on Figure’s marketplace are recorded on Provenance, and HASH, the blockchain’s native token, is used to pay transaction gas fees. Figure covers these fees on behalf of users to simplify the experience, and all fees are quoted in USD. Figure doesn’t control Provenance, though it holds 20% of the HASH supply, and continues to support the protocol development. There are currently 100 validators securing the chain with ~15.5% of the total HASH supply bonded (staked). Below we show the share of the top 10 validators on the network.

The Blockworks report on Provenance can be reviewed here.