FIGURE: Using blockchain to tap into the $12 trillion market

The U.S. financial market is currently shaped by two major structural forces: First, expansive policy support—through rate cuts and relaxed credit—has been focused on bolstering the real estate sector, which makes up almost 20% of U.S. GDP. Second, the tokenization of real-world assets (RWA) is bringing mortgage and credit instruments onto blockchain rails, directly challenging the $12 trillion legacy market.

Figure is strategically leveraging both dynamics: taking advantage of “Made in USA” policy incentives while building foundational blockchain infrastructure to redefine transparency and efficiency in mortgage and real estate finance. The central question remains: Can Figure’s model scale from pilot programs into the mainstream, or will it be constrained by fundamental issues such as liquidity, governance, and regulatory hurdles?

Team and Investment Background

CEO Mike Cagney

Mike Cagney, co-founder of SoFi, played a pivotal role in scaling SoFi’s lending volume to over $50 billion, pioneering the digital transition of student and mortgage loans from traditional banks. He holds a bachelor’s from UC Santa Barbara and is a Sloan Fellow at Stanford Graduate School of Business, specializing in applied economics and management. For Cagney, Figure isn’t a typical startup—it’s an extension of his vision to mainstream digital asset origination and on-chain finance, a path unfinished at SoFi.

COO June Ou previously served as SoFi’s Chief Operating Officer, overseeing risk management and compliance, and directly navigating the most challenging regulatory landscapes. An alumna of UC Berkeley, Ou bridges engineering and regulatory frameworks by translating technical code into compliant financial products.

Figure’s backers include leading venture capital firms like Ribbit, DST Global, and a16z. a16z notably launched a $7.5 billion blockchain fund in 2018, investing in Coinbase, Solana, Uniswap, and OpenSea—driving the RWA on-chain narrative. a16z’s support gives Figure not only capital but also a strategic bridge to Silicon Valley, Wall Street, and the Web3 ecosystem.

Core Pain Points in Traditional Real Estate Mortgages

Figure’s entrance into this market is driven by deep-rooted structural problems in the $12 trillion U.S. mortgage ecosystem—still dominated by paper-based processes and layers of intermediaries.

Limited Liquidity and Low Efficiency

A typical mortgage requires 30–60 days from application to closing, involving extensive document review, credit assessment, asset registration, and multiple approvals. Borrowers face long wait times and high fees; investors suffer from delayed capital deployment and inefficient allocation.

Excessive Intermediation

While banks are the front-line intermediary, the stack includes rating agencies, custodians, investment banks, and secondary market investors—each taking a cut and extending settlement timelines. This results in a cycle of costly, opaque, and inefficient operations.

Transparency Deficits

Investors rarely have real-time insights into collateral quality, relying instead on third-party reports or bank disclosures. Historical crises have demonstrated that such information asymmetry is a significant systemic risk.

Figure’s Solution and Challenges

To address inefficiencies and opacity in mortgages, Figure proposes to reconstruct workflows using blockchain. Their approach doesn’t discard legacy financial processes but aims to bridge compliance and operational efficiency.

Figure builds its proprietary blockchain using Cosmos SDK, operating a Proof-of-Stake (PoS) validation model that compresses settlement cycles from 30–60 days to mere hours or days. Mortgage origination, collateral, payments, and other processes are standardized as smart contracts, enabling automation and modular secondary market activities such as packaging, trading, and splitting—giving institutional investors a toolkit far more flexible than traditional securitization.

Open source is another cornerstone. Figure’s protocol, built on Cosmos SDK, is fully auditable and verifiable—a critical feature in blockchain finance:

• Trust shifts from regulatory oversight and intermediaries to code and consensus. Without open source, third parties can’t verify fairness or security.
• Open source attracts developers, institutions, and network effects, ensuring technology isn’t locked in a single entity’s hands.
• Regulators and auditors can directly examine open code, enhancing transparency and mitigating black-box risks.

Versus Bitcoin’s Proof-of-Work (PoW), Figure’s PoS model offers clear advantages in efficiency and sustainability:

• PoW ensures security through computational competition—highly decentralized but energy-intensive.
• PoS awards validation rights based on token staking, enabling faster transaction processing and reduced energy usage, making it suitable for financial enterprise use cases.

Still, these innovations come with challenges:

• Governance risk: PoS can concentrate decision-making among large token holders, raising centralization concerns through “money voting.”
• Validator centralization: A limited number of institutional nodes cast doubt on blockchain’s promise of decentralization.
• Regulatory transparency: Despite a strong team and investor profile, Figure’s on-chain disclosures aren’t yet at the level of traditional public markets.

Despite these challenges, Figure’s model offers a disruptive, market-driven “best of breed” solution. By combining smart contracts, open protocols, and PoS, Figure improves transparency and efficiency. Its primary challenge: earning durable institutional and market trust amid governance centralization and regulatory scrutiny.

Competitors and Differentiation

“Reinvent finance” platforms are proliferating, and RWA remains a major industry focus. To understand Figure’s position, view it in both the traditional finance landscape and the DeFi/RWA sector.

In the U.S., Fannie Mae and Freddie Mac dominate the mortgage market, packaging loans into MBS for secondary investors. This system, despite its size, suffers from inefficiencies and lack of transparency—poorly suited to the market’s need for real-time flows. Figure’s disruptive approach digitizes this pipeline, moving operations onto blockchain, with instant verifiability.

Within Web3, several protocols are focused on RWA and DeFi:

• Ondo Finance
  Standardizes assets such as U.S. Treasuries and money market funds (e.g., OUSG, USDY), creating institutional-grade on-chain liquidity. Ondo leads in scale but focuses on short-duration, liquid instruments, not mortgages—which are longer-term, higher-volume, and operationally complex.
• Maple Finance
  Provides institutional loans via on-chain pools for crypto-native companies, with outstanding loans in the hundreds of millions to billions. Borrowers are largely within the crypto ecosystem, not traditional finance.
• Centrifuge
  Tokenizes receivables and small business loans, supplying non-volatile collateral for DeFi. With TVL in the hundreds of millions, it demonstrates tokenization viability but is limited to niche assets, far from mainstream mortgage integration.

Asset management giants are also pushing on-chain products:

• BlackRock｜BUIDL (USD Institutional Digital Liquidity Fund)
  Issued via Securitize on public blockchains, with over $1B AUM by 2025-03-13; accepted as collateral by major crypto exchanges from 2025-06-18; mid-year AUM reached $2B, and as of 2025-09-18 hovered near $1.9B, establishing it as a benchmark for on-chain U.S. money market funds.
• Franklin Templeton｜BENJI (Franklin OnChain U.S. Government Money Fund, FOBXX)

The first U.S.-registered money fund with on-chain share recording; invests ≥99.5% in government securities, cash, and fully-backed repos. As of September 2025, AUM stood at $730–740 million; on 2025-09-18, Franklin Templeton, DBS, and Ripple launched sgBENJI in Singapore, enabling trading and lending on DBS Digital Exchange and exploring its use as tokenized collateral.

Common traits among these protocols include full DeFi workflows—open governance, transparency, regulatory arbitrage—and a technical approach of wrapping existing legal rights (fund shares, debt securities, notes) into compliance-limited tokens, linked to institutions via KYC, oracles, and transfer restrictions. Their strengths are verifiability and automation; weaknesses include legal complexity, asset diligence difficulty, and a gap to core mainstream assets.

Key differentiators for Figure:

• Positioning and scope:
  Figure standardizes the mortgage process end-to-end—origin, onboarding, contract, servicing, settlement, and secondary trading—using open smart contracts, targeting long-term, operationally intensive U.S. mortgages.
• Asset focus:
  Figure is built for core assets like mortgages; Centrifuge/Maple emphasize private credit and receivables; Ondo focuses on government debt and money market funds—centered on liquidity and allocation.
• Compliance and integration strategy:
  Figure is institutionally embedded (custody, KYC, service provider integrations); most DeFi-RWA platforms focus on community governance and token wrapping, with limited touchpoints to legacy financial systems.
• Infrastructure depth:
  Figure aims to overhaul both primary and secondary mortgage markets; Ondo and peers mainly optimize existing products for on-chain flow, with little engagement on origination or servicing.
• Technology and auditability:
  Figure delivers open source, fully auditable infrastructure—akin to a transparent factory with observable workflows—while many RWA solutions resemble outsourced assembly, with process details scattered among multiple service providers.

In summary, while most competitors remain at “$100 million to multi-billion, crypto-native or liquidity management” scales, Figure stands out in its ambition to build on-chain infrastructure for core assets like U.S. mortgages. Its uniqueness hinges on regulatory acceptance and institutional adoption, but in terms of asset breadth and infrastructure depth, Figure is clearly differentiated from mainstream DeFi protocols, and operates closer to an “on-chain infrastructure platform” than a standalone product competing with Fannie/Freddie.

Put simply, Figure is “building roads”—not just “selling cars.” Its future depends critically on compliance and institutional traction.

Market Size and Prospects

Structural Scale & Cycle Upside

• Mortgage market size
  U.S. household mortgage balances are $13–14 trillion; annual MBS issuance in the secondary market reached $1.19 trillion (+21.7% YoY), with average daily agency turnover of $345.1 billion—a clear recovery in liquidity.
• Interest rate cycle
  30-year mortgage rates fell to 6.39% (week of 2025-09-12), with markets anticipating Fed rate cuts, triggering a jump in refinancing applications and benefiting HELOC/second lien lending.
• Annual origination (MBA)
  2025 total originations are forecasted at $2.1–2.3 trillion, a strong rebound from 2024. Each 50–100 basis point decline in rates significantly boosts second lien flexibility, fueling new issuance and trading.

Figure’s growth metrics

• Revenue: For H1 2025, Figure posted net revenue of $191M (+22.4% YoY), turning profitable with net income of $29M.
• Lending: Over the 12 months ending June 30, 2025, Figure originated $6B in home equity loans (including HELOCs), up nearly 30% YoY; $1.3B was sourced via the Figure Connect marketplace.
• Market validation: In June 2025, Figure completed $355M of on-chain HELOC securitization (FIGRE 2025-HE3), earning AAA ratings from S&P for several tranches and broadening its investor base.
• IPO milestone: Figure listed on Nasdaq on September 11, 2025, raising $787.5M and reaching a $5.29B IPO valuation.

Efficiency → Cost → Gross Margin: The “On-chain Math”

• Settlement speed: Traditional secondary transfers are T+30–60 days; blockchain standardization and smart contracts compress timelines to same-day/few days, cutting idle capital and manual costs.
• Cost savings: Official sources and case studies show per-loan cost savings of hundreds of dollars or 100+ basis points are achievable, with further automation potential in origination, servicing, and refinancing.
• Interoperability gains: When debt tokens are whitelisted and transferable, they can be pledged against on-chain funds like BUIDL/BENJI/OUSG, creating “capital efficiency stacking” that converts idle cash to T+0/T+1 liquidity, improving gross margins.

Valuation scenarios: 1-Year / 5-Year Outlook

• Revenue baseline: Annualizing H1 2025’s $191M, estimate full-year at $380–420M; use the midpoint of $400M for modeling.
• Share count: Based on IPO valuation ($5.29B) and price ($25/share), float is ~212M (pre-dilution).

A) 1-Year Target (by end-2026) Revenue Scenarios (rate cuts and share gain):

• Bear: +15% ($460M)
• Base: +25% ($500M)
• Bull: +35% ($540M)

EV/Sales multiple methodology, reflecting FinTech/RWA growth premiums:

• Bear: 9×; Base: 14×; Bull: 18×
• Calculated on 212M shares: Bear ($4.14B → $19.5/share), Base ($7.00B → $33.0/share), Bull ($9.72B → $45.9/share)
• After dilution to 230M shares: Bear $18.0, Base $30.4, Bull $42.3

B) 5-Year Target (by 2030E) Revenue Scenarios (on-chain adoption × product expansion):

• Bear: +15% CAGR ($804.5M)
• Base: +25% CAGR ($1,220.7M)
• Bull: +35% CAGR ($1,793.6M)

At later-stage multiples (de-risked): Bear 6×, Base 8×, Bull 10×

• 212M/230M shares: Bear ($4.83B → $22.8/$21.0), Base ($9.77B → $46.1/$42.5), Bull ($17.9B → $84.6/$78.0)

Key takeaway: Rate cuts drive origination volume; blockchain boosts efficiency. If Figure can deliver auditable, composable smart contracts across origination, servicing, securitization, and trading, and institutions embrace BUIDL, BENJI, OUSG as collateral, efficiency and gross margin will drive higher multiples. If rates remain sticky or compliance/adoption slow, multiples will compress toward the low end.

This model is based on peer-multiple and business cycle context; it excludes temporary multiple inflation from media hype or capital surges, which are observable but not reliably predictable and therefore not baseline assumptions.

Strategic Focus and Risk Management

Dual Policy and Infrastructure Tailwinds

• Policy direction: The federal GENIUS Act for stablecoins is now law, enabling compliant, whitelisted tokenization; the SEC’s new chair, Paul Atkins, advocates clear and predictable enforcement, supporting institutional on-chain adoption within regulatory boundaries. These factors move blockchain-enabled finance from feasibility to regulatory reality.
• Cross-platform collateral expansion: BlackRock BUIDL is accepted at Crypto.com and Deribit; Franklin Templeton, DBS, and Ripple launched sgBENJI, allowing investors to trade, lend, and use as collateral on DBS Digital Exchange. These milestones build the “compliant fund↔on-chain collateral” infrastructure, crucial for Figure’s secondary liquidity and capital efficiency.
• Strategic narrative: Figure embodies “Made in USA × RWA × FinTech.” Under a Republican administration prioritizing domestic financial innovation and dollar digitalization, Figure sits squarely at the convergence of policy and industry narrative.

Structural Opportunities

While real estate is a massive market, much of its upside is already priced in. The true potential lies in future expansion—such as enabling loans against Bitcoin or allowing BTC collateral to increase borrowing power.

Risks: Blockchain does not shield from macro forces

1. “Hard liquidity” for real estate is governed by legal process and market depth; blockchain compresses operational flow, not disposition cycles. In Q2 2025, the average U.S. foreclosure still took about 645 days. If the housing market declines, Figure’s efficiency may accelerate asset turnover, but cash recovery could lag liabilities—a risk that established incumbents are better equipped to manage.
2. Regulatory path dependence: GENIUS Act provides a foundation, but other legislation (e.g., CLARITY Act) is pending; the SEC, despite a more predictable tone, can shift with leadership and events, introducing short-term volatility. Narratives alone aren’t cash flow—valuation durability hinges on regulatory details and pace of adoption.
3. Technical governance and concentration: PoS delivers performance but risks centralized staking and governance; financial-grade applications require a careful balance between throughput, decentralization, and operational risk, with open source and continuous external audit essential for trust.

Personal Perspective

I’ve been involved with blockchain from the early days and remain a believer. That said, aside from buying/selling property and studying mortgage rates, I have little exposure to real estate equities—an acknowledged blind spot.

One bias: I tend to view blockchain markets on four-year cycles. During the last wave (Mara, Coinbase, Riot IPOs), I exited crypto holdings, which made me more cautious later—I keep asking, “Is this time really different?” This caution helped me avoid some sharp downturns but may have made me overly conservative on new opportunities.

Figure has prompted deep reflection. It’s not about hype or “air narratives”—it’s fundamentally rewriting financial workflows, offering a user experience indistinguishable from traditional banking. Without digging beneath the surface, most users wouldn’t recognize its blockchain foundation. That’s the “invisible tech, normal UX” that signals true market adoption, not just education. I remind myself: Blockchain isn’t just crypto. It should be judged by cash flow, efficiency, and scale, not merely cycles and sentiment.

My chief concern is the regulatory volatility highlighted earlier. Repeated SEC statements about ETH have led to roller-coaster price action and a prolonged slump—missing much of the last bull run. With Figure, I’m inclined to take a small starter position and monitor for stronger conviction signals.

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