Figure - The Blockchain Enabled Loan Originator

Executive Summary

Figure represents one of the more operationally mature applications of blockchain within regulated credit markets. Its primary advantage does not stem from consumer-facing innovation or decentralization, but from using a permissioned ledger to compress reconciliation, settlement, and custody functions between origination and institutional capital.

Blockchain in Figure’s model functions as an inter-institutional coordination layer, enabling shared verification across regulated counterparties rather than end users. The resulting efficiencies—faster settlement, improved capital velocity, and reduced operational friction—primarily benefit Figure and its capital providers, with limited direct impact on borrower outcomes unless savings are intentionally passed through.

Strategically, Figure’s long-term trajectory and continued success centers on accelerating loan mobility, reducing capital friction, and positioning its platform as financial infrastructure rather than solely a lender. The sustainability of this approach depends on continued asset volume, institutional participation, and regulatory continuity under oversight bodies such as the SEC, CFPB, and FinCEN.

Figure is best understood not as a tokenization startup, but as a financial infrastructure company using blockchain as an efficiency layer. Its success reinforces a broader sector insight: in RWAs and tokenized real estate, durable scale may be more likely to emerge from compliant credit infrastructure than from experimental ownership models.

Project Overview & Business Description

Figure is a U.S.-based financial technology company that originates, services, and finances consumer and real estate–backed loan products using blockchain-based infrastructure. Its core offerings include home equity lines of credit (HELOCs), cash-out refinances, debt service coverage ratio (DSCR) loans, and crypto-backed loans. These products are distributed directly to borrowers and financed through a combination of balance sheet activity and institutional capital participation.

Operationally, Figure integrates blockchain technology into the loan lifecycle, using a permissioned ledger to record loan state, ownership, and transfer events. The company also operates Figure Markets, which provides institutional participants access to lending pools, yield products, and tokenized financial instruments tied to Figure-originated assets.

Figure positions blockchain not as a consumer-facing feature, but as a regulated financial infrastructure layer designed to improve efficiency, transparency, and capital mobility within credit markets.

Business Model & Economic Design

Figure’s business model centers on originating and financing credit products, while using blockchain infrastructure to reduce friction in capital formation and loan transfer.

Primary revenue sources include:

• Loan origination and servicing fees

• Interest income across secured lending products

• Marketplace-related activity via Figure Markets

• Capital markets spread capture enabled by faster loan financing and transfer
  

Borrowers are consumers and real estate investors seeking secured credit. On the funding side, institutional capital providers—including lending pool participants and financing counterparties—supply capital for loan origination and ongoing activity.

Blockchain functions as an inter-institutional coordination layer, supporting faster settlement and capital reuse rather than serving as a standalone profit center.

Analytical limitation: Sources do not disclose unit economics or quantify the cost-of-capital impact attributable to blockchain usage, limiting assessment of long-term margin advantages.

Intermediaries Cut, and Beneficiaries

Figure’s blockchain-enabled model reduces or compresses several intermediaries commonly involved in lending and capital markets workflows, including:

• Reconciliation and data intermediaries

• Settlement and transfer agents

• Certain custodial and trustee functions related to loan transfer and financing

These efficiencies primarily benefit Figure and its institutional capital providers through faster settlement, improved capital velocity, and lower operational friction. Loan recipients do not directly benefit unless savings are intentionally passed through. Importantly, Figure does not remove capital providers from the system; the blockchain replaces coordination and settlement functions, not the role of lenders or investors.

Market Context & Strategic Positioning

Figure operates at the intersection of regulated consumer lending, real estate finance, and blockchain-enabled financial infrastructure. Unlike many RWA platforms focused on fractional property ownership or tokenized investment products, Figure targets core credit markets, where scale, compliance, and operational reliability are prerequisites.

Strategically, this positions Figure as:

• More institutionally aligned than crypto-native RWA platforms

• More technologically ambitious than traditional lenders
  

This hybrid positioning enables access to large addressable markets but constrains experimentation. Regulatory compliance, licensing requirements, and consumer protection standards impose structural limits on decentralization and composability, shaping Figure’s technology choices and product design.

Traction, Adoption & Available Metrics

Figure discloses materially higher activity levels than most RWA or tokenized real estate platforms:

• Over $19B in blockchain-based loan originations to date

• More than $1B in monthly on-chain loan originations

• $2.5B in loan volume in Q3 2025

• Over $16B in home-equity lending completed

• $15.3B in tokenized assets reported by third-party coverage

  
  

These figures indicate production-scale deployment rather than pilot activity. Notably, disclosed metrics emphasize loan origination and financing volume rather than token market capitalization or retail participation.

Missing data: Borrower counts, default rates, loan performance by vintage, and investor return metrics are not publicly disclosed, limiting risk-adjusted performance analysis.

Operational Assessment

Strengths

• Demonstrated scale in blockchain-enabled lending

• Deep regulatory engagement and licensing footprint

• Vertical integration across origination, servicing, and markets

Weaknesses

• Limited public transparency into protocol-level economics

• Business complexity spanning lending, markets, and infrastructure

Opportunities

• Expansion of tokenized credit within institutional capital markets

• Increased infrastructure leverage as loan volume and mobility scale

Threats

• Regulatory reinterpretation of blockchain-based lending activity

• Housing and interest rate volatility affecting collateral performance

  
  

Figure is not disintermediating lenders or capital providers. It is compressing reconciliation, custody, and settlement layers while maintaining a regulated, lender-centric model.

Product, Technology & Token Design Notes

Figure’s technology stack integrates blockchain at the loan lifecycle level, including origination records, servicing events, ownership changes, and financing transactions. Documentation emphasizes secure data handling, encrypted payloads, and API-based integrations with partners.

The blockchain is permissioned and role-based, designed for regulated participants rather than open public access. Tokenization functions primarily as a representation and settlement mechanism for loans and credit instruments, not as a governance or speculative token model. This design prioritizes auditability, reliability, and compliance over decentralization or composability.

Regulatory & Compliance Considerations

Regulation is a foundational pillar of Figure’s strategy. Relevant oversight bodies include:

• State banking and lending regulators

• Consumer Financial Protection Bureau (CFPB)

• Securities and Exchange Commission (SEC)

• FinCEN

• State mortgage and real estate regulators

  
  

Figure’s permissioned blockchain architecture supports regulatory objectives by providing immutable, time-stamped records of loan activity and ownership. Such a ledger can simplify supervisory review, improve auditability, and reduce compliance ambiguity relative to fragmented legacy systems. Scalability, however, remains gated by regulatory acceptance rather than technical capability.

Long-Term Ambition

Figure’s long-term strategy appears oriented around four interrelated objectives:

1. Accelerate loan mobility Enable faster transfer, financing, and reuse of loans across institutions

2. Reduce capital friction rather than borrower friction Optimize funding velocity, settlement speed, and balance sheet efficiency more than consumer accessibility and UX.

3. Position as financial infrastructure, not just a lender

   Build reusable rails that could support broader credit markets beyond Figure.

Their success depends on sustained asset volume, institutional adoption, and regulatory continuity.

Strategic Recommendations

• Strengthen reporting on loan mobility, including transfer speed, financing velocity, and secondary market activity

• Operationalize capital efficiency KPIs, tying reductions in settlement, reconciliation, and securitization friction to cost-of-capital and balance sheet outcomes

• Clarify the economic contribution of blockchain infrastructure as these efficiencies scale

• Define criteria for infrastructure extensibility, including when and how third-party participation would be supported
  

Key metrics and variables to track over time:

• Loan mobility and secondary market activity

  • Average time from origination to financing or transfer

  • Volume and frequency of secondary loan transfers

  • Percentage of originated loans reused or refinanced through Figure Markets

• Cost-of-capital trends and balance sheet efficiency

  • Funding spread relative to benchmark rates

  • Warehouse line utilization and turnover rate

  • Average duration loans remain on balance sheet before financing

• Institutional participation and concentration within Figure Markets

  • Number of active institutional counterparties

  • Concentration of capital among top counterparties

  • Repeat participation rates across lending pools or products

• Regulatory signaling from the SEC, CFPB, and other regulators

  
  

Access to internal data in these areas would materially improve external analysis and strategic decision-making.

Key Takeaways for the RWA / Tokenized Real Estate Sector

• Blockchain adoption may scale faster in credit infrastructure than in property ownership models

• Efficiency gains primarily accrue to capital markets participants, not end borrowers

• Permissioned blockchains can enhance compliance rather than undermine it

• For Figure, operational execution and regulatory alignment matter more than decentralization narratives

Blockchain Realty Report

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https://www.bitcoinlandlords.com/post/blockchain-realty-report-12

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