Figure has completed $16 billion in blockchain native lending transactions since 2018. The data point was shared by founder Mike Cagney, who was responding to a LinkedIn post that said the world is five years away from broad-based utilization of tokenization having any volume or “product market fit.”
Christopher King, CEO of Eaglebrook Advisors, claimed there is no retail nor institutional demand for digital assets or tokenization. He also said there is a high cost and plenty of risk when tokenizing traditional assets – which typically means digital securities, which are highly regulated.
To quote Cagney:
“Figure has done $16B in blockchain native lending transactions since 2018 (increasing each year). Why? For starters, securitization costs. We reduce the scope and scale of audit by over $1M on a $250M securitization. We’re also the first to do AAA securitizations of blockchain assets, and yes – we just did a deal where the bonds are native on chain (not DTC) – more on that to come. We’re working on standing up the first private TBA market, native on chain. And that is today – not five years from now.”
Figure leverages Provenance Blockchain (all part of the same initiative) for various digital securities – starting with lending. Cagney’s experience at SoFi, another firm he founded that started with online lending, probably helped with the vision to launch Figure. The company focused first on institutional services, a decision which makes a lot of sense as it is easier to scale, and “retail” is really hard.
King does believe that in the long term, most assets will utilize blockchain technology as financial assets migrate to the digital realm, shaving cost and streamlining transactions.
It is an interesting read, available here.