Interpreting Figure Q3: Why is it the undisputed first RWA stock?

Author: @BlazingKevin_ , the Researcher at Movemaker

1 Research Abstract

Figure Technology Solutions (hereinafter referred to as "Figure") is at the forefront of the transformation of the financial services industry, dedicated to reshaping traditional lending and capital markets through blockchain technology. As a vertically integrated fintech company, Figure is not only the largest non-bank Home Equity Credit (HELOC) originator in the United States, but also a key infrastructure provider in the field of Real-World Asset (RWA) tokenization. As of December 2025, Figure had successfully completed its IPO, with a stable market capitalization between $7.5 billion and $9 billion.

The core argument of this report is that Figure represents the third stage of fintech development: from "online" (such as Rocket Mortgage) to "platform" (such as SoFi), and now to "on-chain". Figure, leveraging its Provenance Blockchain public chain built on the Cosmos SDK, has successfully solved the most challenging "middle and back-office efficiency" problem in traditional finance. By minting, registering, and trading assets (such as mortgages and ownership records) directly on-chain, Figure can reduce the cost of loan origination and securitization by more than 100 basis points and shorten processing time from the traditional 30-45 days to less than 5 days.

2025 was a turning point for Figure. The company not only achieved GAAP profitability, with Q3 net profit approaching $90 million, but also completed its strategic merger with Figure Markets, reintegrating its lending business and digital asset trading platform. This move created a closed-loop ecosystem: consumers can obtain funds by mortgaging their homes, with the funds issued in the form of interest-bearing stablecoins ($YLDS), which can be directly invested on the Figure Markets exchange or re-staking through the Democratic Prime protocol. This integration of the "asset side" and the "funding side" demonstrates the ultimate vision for the RWA (Retail Asset Wafer) sector.

This report will analyze Figure's Q3 financial report and assess whether its "blockchain-native" strategy constitutes a true moat, as well as its long-term investment value in the increasingly crowded RWA sector, based on recent updates to its revenue streams and business model.

2. Business Segments and Product Lines

Following its merger with Figure Markets in July 2025, Figure's business architecture became more tightly integrated and vertically aligned. Figure's core competitiveness lies in digitizing the entire asset lifecycle (origin, registration, trading, financing, and settlement) through the Provenance blockchain. **Based on this, we have summarized Figure's four core business models: RWA asset origination and distribution, capital protection and securitization, DeFi financing and lending, and interest-bearing stablecoins and payment settlement.** As shown in the diagram below, we have linked these four businesses together to clarify Figure's complete business model.

2.1 RWA Asset Initiation and Distribution

2.1.1 HELOC

This is Figure's core business, designed to address the pain points of traditional credit markets: manual operations, paper-based reliance, and high costs (an industry average of $11,230). Primarily based on HELOC, it's worth noting the significant surge in DSCR loan transaction volume in Q3. Let's start with HELOC, Figure's flagship product.

Product Mechanism and User Experience: Traditional banks typically require 30 to 45 days to process HELOCs, involving cumbersome offline assessments and notarizations. Figure leverages an Automated Valuation Model (AVM) and immutable records on the blockchain to achieve an exceptional experience of "5-minute approval and 5-day disbursement." This speed advantage directly addresses a market pain point, especially in a high-interest-rate environment where homeowners tend to obtain liquidity through HELOCs rather than selling their homes, thus avoiding losing their existing low-interest mortgages.

Market Position: Since its inception, Figure has disbursed over $19 billion in loans, becoming the largest non-bank HELOC originator in the United States. It holds a dominant market share among non-bank institutions.

HELOC+ is the highest-tier premium lending pool in the protocol. Its underlying collateral consists of a package of HELOC assets initiated by Figure and its partners and tokenized on the Provenance chain. The credit quality of these assets is comparable to that of assets that have received an S&P AAA rating .

From another perspective, regarding the HELOC business, from loan origination to the final securitization of RWA assets, the stakeholders involved and their objectives are as follows:

• Borrower (Individual/Micro-enterprise):

  Apply for Home Equity Credit (HELOC) or Small Business Loan (SMB) through Figure’s 100% digital process.

  ◦ The authorization system automatically verifies income, assets (AVM automatic valuation) and credit score, achieving "5-minute approval and 5-day loan disbursement".

• Initiating partners (banks, credit unions, independent mortgage lenders):

  • Utilize Figure’s white-label loan origination system (LOS) to produce standardized credit assets according to uniform underwriting standards.

  Pay Figure a technical processing fee based on transaction volume.

  • Produced credit asset packages can be auctioned on the Figure Connect market or sold according to forward commitments, enabling rapid capital turnover without tying up the balance sheet for extended periods.

• Figure Connect platform (matching party):

  ◦ Convert credit assets into “digital twin” tokens on the Provenance chain to ensure the uniqueness and immutability of ownership, composition, and performance history.

  ◦ Facilitates transactions between originating banks and capital market buyers (institutions), providing real-time, atomic on-chain settlement services.

• Institutional buyers (asset management companies, insurance companies, sovereign wealth funds):

  Purchase homogeneous credit asset packages with AAA rating potential through the platform to gain transparent and data-rich credit exposure.

  Enjoy settlement speeds several times faster than traditional secondary markets (from months to days/seconds).

2.1.2 First Lien (HELOC)

In Figure's business model, cash-out refinancing is being reshaped through its innovative "HELOC" product. This business is growing extremely rapidly, with transaction volume nearly tripling year-on-year in the first half of 2025. The following explains the key differences between cash-out refinancing and the HELOC business.

While both traditional finance and Figure's blockchain-native credit model are means for homeowners to extract home equity, they differ significantly in loan nature, lien priority, and capital market performance.

1. Loan Nature and Credit Structure: Beginning and Revolving Credit

• HELOC: Under legal and regulatory frameworks (such as the Loan Honesty Act (TILA)), HELOC is defined as "open credit." Its core feature is that homeowners can repeatedly withdraw and repay funds within a specified withdrawal period (typically 2 to 5 years). Figure's HELOC products allow borrowers to withdraw funds as needed without incurring additional out-of-pocket expenses or settlement costs.
• Cash-out refinancing: This is typically a type of "closed-loop credit." Homeowners take out a new loan larger than their existing mortgage, pay off the old loan, and receive the remaining cash difference in a lump sum. It's not a revolving credit line, but rather a one-time debt restructuring.

2. Differences in the priority of liens

• HELOC: Typically exists as a "second lien." This means it is an additional liability on top of the homeowner's existing first mortgage. In liquidation, it ranks after the first mortgage and therefore typically carries a higher risk weight.

• Refinancing transactions inevitably involve a "first lien." Because it involves replacing an old loan with a new one, the new lender acquires a primary lien on the property. Figure shows one of the fastest-growing products in recent years: the "first lien HELOC," which is essentially designed as an alternative to traditional cash-out refinancing.

3. Efficiency and cost differences in the Figure model

According to Figure's business data, it has achieved groundbreaking cost reductions in these two business categories using blockchain technology:

• Cost Comparison: Figure's cost to process first lien loans (a refinancing alternative) is only $1,000 , while the industry average is as high as $12,000 . For traditional HELOCs, Figure's average production cost is only $730 , far below the mortgage industry average of $11,230 .
• Loan disbursement time: Whether it's refinancing or HELOC, homeowners can typically get approval within 5 minutes through Figure's Automated Loan Origination System (LOS), with a median disbursement time of 10 days, compared to a median time of about 42 days in the traditional industry.

4. Capital Markets and the Logic of Securitization

• HELOC Securitization: Figure 1 has successfully issued multiple asset-backed securities (ABS) backed by HELOCs, with the senior debt repeatedly receiving AAA ratings from Standard & Poor's and Moody's. Because HELOCs often represent a second lien, rating agencies typically assume a higher loss-of-default rate than the first lien asset.
• Performance of refinancing (first lien): Because refinancing transactions involve a first lien, the assets are more attractive in the capital markets, and risk pricing is typically more favorable. The volume of first lien transactions in Figure 3 increased nearly threefold in the third quarter of 2025.

Why are more and more American homeowners choosing HELOC (Helium First Lien) and what benefits can they gain?

◦ Extreme cost savings: The first lien production cost of Figure is approximately $1,000 , while the industry average cost is as high as $12,000 , saving users a significant amount of settlement costs.

◦Time efficiency: Approval takes only 5 minutes, and the median loan disbursement time has been reduced from the industry average of 42 days to 10 days .

◦ Flexibility: Obtaining lower interest rates than personal loans, and typically having the flexibility to withdraw net worth again in the future.

The data released in the Q3 financial report shows that:

In the third quarter of 2025, the total transaction volume of Figure's consumer credit market reached $2.5 billion , a year-on-year increase of 70%.

First lien HELOC performance:

◦ Q3 2025: First lien HELOC transactions accounted for 17% of total consumer credit. Based on this, the transaction value for the quarter was approximately $425 million . This represents a 650 basis point increase from 10.5% in the same period of 2024.

◦ First half of 2025 performance: Its trading volume accounted for 15% of the total origins. The corresponding transaction value was approximately US$480 million .

◦ Growth rate: The business is experiencing exponential growth, with transaction volume nearly tripling year-on-year in the third quarter of 2025.

Open/Standard HELOC (usually a second lien):

Since HELOCs account for 99% of the total, the vast majority of them, except for the first lien, fall into this category.

Despite the rapid growth of first liens, Figure's balance sheet shows that as of September 30, 2025, 80% of its HELOC assets were still in non-first lien (i.e., as second or third liens).

2.1.3 DSCR Loans

Designed specifically for real estate investors, this product does not consider the borrower's personal income but is approved based on the property's rental yield (DSCR).

DSCR lending is one of the core pathways for Figure to expand its successful model from the HELOC space to a broader range of consumer credit asset classes.

In Q3 2025, new product categories, including DSCR loans, contributed over $80 million in transaction volume, demonstrating strong growth momentum.

Its participant structure, behavioral patterns, and profit distribution logic are highly consistent with HELOC, but it focuses more on the cash flow of investment properties in terms of underlying asset attributes. In terms of stakeholder profile, apart from borrowers, it is basically the same as HELOC.

DSCR loan borrowers primarily seek financing for leased properties. Borrowers submit applications through Figure or its partners' portals. A unique aspect of DSCR loans is that, in addition to a standard credit assessment, borrowers must provide proof of rental income (usually a lease agreement) to calculate debt servicing coverage.

The core logic of DSCR lending lies in "replacing trust with facts (data)". Similar to HELOC, it achieves "Pareto optimization" on both the asset and funding sides by transforming extremely illiquid real estate claims into standardized, fungible tokens on the blockchain: borrowers get the money, institutions reduce transaction costs, and ordinary DeFi users who were originally on the periphery of finance become the common beneficiaries of these high-quality RWA assets.

2.2 Capital Protection and Securitization

To enhance market liquidity and act as a “buyer of last resort,” Figure has established strategic partnerships with top investment institutions.

• Sixth Street (strategic joint venture partner):

  ◦ Provide $200 million in equity capital to the joint venture entity Fig SIX Mortgage LLC.

• Fig SIX Mortgage LLC (Security Vehicle):

  The joint venture entity Fig SIX Mortgage LLC, jointly established by the two parties, is defined as a key “Guarantor Vehicle” in the Figure ecosystem and has received a $200 million recyclable equity capital commitment from Sixth Street.

  At the operational level, Fig SIX plays a key role as a "resident buyer" on the Figure Connect electronic marketplace. This mechanism alleviates the concerns of originating partners such as banks, credit unions, and independent mortgage lenders regarding asset distribution, ensuring that their blockchain-native assets receive guaranteed execution and more competitive market pricing. This "always-present" bidding mechanism effectively transforms the previously fragmented and opaque private lending transactions into a standardized market with efficient price discovery capabilities.

  In the structured design of securitized products, Fig SIX's risk hedging function is more significant. When initiating a securitization transaction, this vehicle actively retains and holds the "residual value" or "first loss portion" of the asset package. This arrangement makes Fig SIX the "chief absorber" of credit risk, taking the lead in absorbing losses when the underlying HELOC loan defaults, thereby protecting the interests of upper-level creditors.

2.3 DeFi Funding and Lending

This model democratizes the flow of funds by eliminating traditional prime brokers and warehouse financing intermediaries.

• Asset holders:

  Typically, banks or lending institutions deposit tokenized credit assets (such as the HELOC asset package) or crypto assets generated through the LOS system into smart contracts as collateral. This model allows institutions to obtain real-time liquidity using their RWA assets, and their financing costs are often lower than those offered by traditional bank warehouse lines of deposit.

  The agreement employs an hourly Dutch auction to determine the clearing rate. Borrowers set a maximum acceptable rate, while lenders bid on their target yields, with all funds ultimately earning interest at a uniform market clearing rate. This mechanism ensures immediate and fair price discovery, allowing the market to dynamically adjust within a wide interest rate range of 1% to 30%.

• Liquidity providers:

  Figure successfully transformed the private lending market, which was originally limited to top financial institutions, into a more granular market.

  Ordinary DeFi users only need $100 to participate in global credit asset financing through this protocol, which is unimaginable in the traditional financial system.

  By mid-2025, lenders were earning nearly 9% annualized returns through the protocol, significantly higher than the returns from holding YLDS stablecoins or traditional money market funds. This appeal prompted Figure to further extend the model to Layer 1 ecosystems such as Solana and Sui, amplifying RWA's yield leverage by introducing PRIME, a liquidity staking token.

• Democratized Prime Protocol:

  To ensure the safety of lenders' funds, Democratic Prime has established a robust, code-based risk management system.

  • Asset ownership confirmation: DART technology is used to achieve perfect mortgage rights, ensuring that lenders have indisputable legal and technical recourse to the underlying RWA assets.
  • Liquidation Logic: The protocol monitors LTV in real time. When the LTV triggers the 90% threshold, the smart contract automatically initiates the on-chain liquidation process, auctioning off the credit assets through weekly BWIC transactions . The proceeds are used to repay the principal to the lenders first. Furthermore, if market liquidity is insufficient to handle redemptions, the interest rate will automatically jump to 30% to force borrowers to deleverage or attract new capital.

2.4 Interest-bearing stablecoins and payment settlement

Figure leverages its SEC-registered compliance status to bring traditional money market yields into the on-chain payment system.

• Figure Certificate Company (FCC) (Issuer):

  Unlike most stablecoins on the market that are based on offshore entities, $YLDS’s core advantage lies in the transparency of its legal identity.

  The role of the FCC: The FCC is registered as an investment company under the U.S. Investment Company Act of 1940, which specializes in issuing certificates of face value, and $YLDS is the digital representation of these certificates.

  Underlying Asset Guarantee: $YLDS is 100% guaranteed by a portfolio of high-quality, low-risk assets held by the FCC (primarily U.S. Treasury securities and securities similar to those held by Prime money market funds). This structure ensures asset stability and regulatory traceability, enabling it to serve as institutional-grade interest-bearing collateral.

• YLDS holders (mainly institutions):

  $YLDS offers holders a "Pareto improvement" between traditional financial markets and DeFi.

  • Yield Model: Holders can earn a return equivalent to SOFR (Secured Overnight Funding Rate) minus 50 basis points . In a high-interest-rate environment, this makes $YLDS a superior asset choice compared to traditional non-interest-bearing stablecoins.
  • Payments and Settlement: $YLDS supports 24/7 on-chain peer-to-peer transfers and serves as the default settlement currency for Figure Exchange, allowing users to complete asset exchanges within seconds. For example, users can directly purchase Bitcoin using $YLDS, with the system automatically handling underlying exchange rate hedging and settlement.

• Figure Payments Corporation (Funding Channel):

  Because the FCC is subject to regulatory constraints and cannot directly hold common crypto assets such as USDC or USDT, Figure introduced Figure Payments Corporation (FPC) as a key channel for funds.

  • Mirrored Order Mechanism: When users purchase crypto assets using $YLDS on an exchange, FPC runs a mirrored order process in the background. The system matches $YLDS holders with counterparties holding USDC through FPC's proprietary liquidity pool, thereby bridging the gap between compliant security tokens and the public crypto market.
  • Ecosystem Scale: This compliance architecture saw significant growth in 2025, with its balance climbing rapidly from approximately $4 million in the second quarter of 2025 to nearly $100 million in November, and has expanded into Layer 1 ecosystems such as Solana and Sui.

3 Q3 Revenue Breakdown

Figure delivered a stunning performance this quarter, with total net revenue reaching $156.37 million and net profit soaring to $90 million. This net profit margin of nearly 57% is extremely rare among traditional financial institutions, fully demonstrating the efficiency restructuring of traditional lending businesses by the blockchain underlying architecture. Behind this profitability lies its highly diversified and complementary revenue structure, primarily composed of loan sales, technology fees, loan origination, and ongoing service fees and interest.

Net proceeds from loan sales, its largest revenue engine, contributed $63.561 million, demonstrating Figure's strong asset liquidity in the secondary market. Of this, $51.72 million came from full loan sales, enabling Figure to quickly recoup capital by transferring ownership, risk, and cash flow of Home Equity Credit Lines (HELOCs) entirely to institutional buyers. More noteworthy was its $8.266 million in securitized loan proceeds, where the company injected standardized loans through special purpose entities (SPEs) and issued bonds ranging from AAA to B- ratings. Figure's ability to help these securitized products achieve AAA ratings from institutions like S&P and Moody's is no easy feat, entirely thanks to the data integrity provided by its LOS system and the traceability of the Provenance blockchain, offering institutional investors a level of transparency unattainable in traditional financial markets.

Technology and ecosystem fees contributed $35.691 million this quarter, a core element that distinguishes Figure from typical financial companies. Of this, $15.548 million came from technology provision fees, while $16.248 million came from ecosystem fees, essentially a "market access" or "matching" premium. Figure leverages blockchain technology to shorten traditional, months-long settlement cycles to days or even seconds; this real-time settlement capability is a core asset attracting ecosystem partners. Through standardized underwriting and document processing, previously non-standard loans are transformed into highly homogeneous, easily tradable digital assets, marking Figure's successful transformation from a loan originator into a financial infrastructure provider.

At the front end of its business, Figure generated $21.415 million in loan disbursement fees, including direct processing fees, miscellaneous expenses during loan disbursement, and loan discount income. This explosive growth in revenue is inseparable from its highly automated operational processes. Figure has completely abandoned the inefficient models of traditional finance, achieving automated income verification by connecting to borrowers' bank accounts and replacing time-consuming on-site property appraisals with an Automated Valuation Model (AVM). Combined with digital lien matching, automated title search, and remote online notarization, Figure significantly reduces customer acquisition costs and enhances the user experience. All loan data, stripped of personal privacy, is stored in the Provenance blockchain as hash values, ensuring that assets possess immutable credit attributes from the outset.

Beyond its "quick in, quick out" sales model, Figure also demonstrated strong asset management capabilities. Its interest income reached $17.864 million, sourced from returns on its core HELOC portfolio, digital asset-backed personal loans, and approximately 5% of risk-sharing returns retained during asset securitization. Furthermore, Figure exhibited crypto-native acumen in cash flow management, optimizing capital efficiency through YLDS stablecoin interest and cash equivalents. This combination of "asset-light operation" and "strategic risk retention" allows the company to maintain liquidity while also sharing in the long-term appreciation of high-quality assets.

The performance of servicing assets and fees reflects the "long tail effect" in Figure's profit model. Net income from servicing assets this quarter was $9.332 million, reflecting the fair value of the servicing rights retained after the sale of loans. While this value is subject to fluctuations due to internal model valuation assumptions, the cash flow it generates is real. Service fees and other income totaled $8.502 million, of which $7.882 million came from managing loan portfolios for banks, insurance companies, or securitized trusts, including handling monthly repayments, account maintenance, and investor reporting. The weighted average service fee rate remained around 30 basis points (0.30%) in the third quarter, providing a stable pillar of recurring revenue for the company.

Finally, Figure's investment portfolio also reflects its role as a deep player in the crypto space. It recorded $620,000 in "Other" income this quarter, primarily from profit sharing on minority stake investments in unconsolidated entities. Of particular note is its holding in the Domestic Solana Fund, which holds SOL tokens acquired through an auction during FTX's bankruptcy proceedings. Meanwhile, earnings from Fig SIX, a joint venture with Sixth Street, and compliance advisory firm Reflow, further solidify Figure's position within a complete financial ecosystem encompassing credit, investment banking, and compliance consulting.

In conclusion, Figure's Q3 financial report not only showcased strong financial data but also demonstrated to the market that blockchain in the financial sector is not merely a gimmick, but a productivity tool that can genuinely reduce costs, shorten settlement cycles, and improve asset ratings. By hashing and storing underlying loans and batch-changing asset package ownership on the Provenance blockchain, Figure has established a complete digital standard for the entire chain, from asset initiation, automated review, real-time settlement to after-sales services. This model not only improves the efficiency of traditional finance but also paves the way for the wider on-chaining of RWA assets in the future.

About Movemaker

Movemaker is the first official community organization authorized by the Aptos Foundation and jointly launched by Ankaa and BlockBooster, focusing on promoting the construction and development of the Aptos ecosystem in the Chinese-speaking region. As the official representative of Aptos in the Chinese-speaking region, Movemaker is committed to building a diverse, open, and prosperous Aptos ecosystem by connecting developers, users, capital, and numerous ecosystem partners.

Disclaimer:

This article/blog is for informational purposes only and represents the author's personal views, not the position of Movemaker. This article is not intended to provide: (i) investment advice or recommendations; (ii) an offer or solicitation to buy, sell, or hold digital assets; or (iii) financial, accounting, legal, or tax advice. Holding digital assets, including stablecoins and NFTs, carries extremely high risk, with significant price volatility and the possibility of becoming worthless. You should carefully consider whether trading or holding digital assets is suitable for you based on your own financial situation. For specific questions, please consult your legal, tax, or investment advisor. The information provided in this article (including market data and statistics, if any) is for general informational purposes only. Reasonable care has been taken in preparing these data and charts, but we are not responsible for any factual errors or omissions expressed herein.