Decoding Figure Q3: Why It Is the Undisputed Leader in RWA Stocks?

Author: @BlazingKevin_, the Researcher at Movemaker

1 Research Summary

Figure Technology Solutions (hereinafter referred to as "Figure") is at the forefront of transforming the financial services industry, committed 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 Line of Credit (HELOC) originator in the United States but also a key infrastructure provider in the real-world asset (RWA) tokenization space. As of December 2025, Figure has successfully completed its IPO, with a market capitalization stable in the range of $7.5 billion to $9 billion.

The core argument of this report is that Figure represents the third stage of fintech development: from "online" (e.g., Rocket Mortgage) to "platform-based" (e.g., SoFi), and now to "on-chain." Figure leverages its public chain, Provenance Blockchain, developed based on Cosmos SDK, to successfully address the most challenging "middle and back-office efficiency" issues in traditional finance. By directly creating, registering, and trading assets (such as mortgages and ownership records) on-chain, Figure can reduce loan origination and securitization costs by over 100 basis points and shorten processing time from the traditional 30-45 days to within 5 days.

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

This report will analyze Figure's Q3 financial report and evaluate whether its "blockchain-native" strategy constitutes a true moat and its long-term investment value in the increasingly crowded RWA space based on its recent revenue sources and business model updates.

2 Business Segments and Product Lines

After completing the merger with Figure Markets in July 2025, Figure's business structure has become more tightly integrated and vertically aligned. Figure's core competitiveness lies in digitizing the entire asset lifecycle (origination, registration, trading, financing, settlement) through the Provenance blockchain. **Based on this, we have organized Figure's four core business models: RWA Asset Origination and Distribution, Capital Guarantee and Securitization, DeFi Financing and Lending, and Interest-Bearing Stablecoins and Payment Settlement.** As shown in the figure below, we have connected these four businesses to clarify Figure's complete business model.

2.1 RWA Asset Origination and Distribution

2.1.1 HELOC

This is Figure's "core business," aimed at solving the pain points of manual operations, paper dependency, and high costs (industry average $11,230) in the traditional credit market. HELOC is the flagship product, but it is worth noting that DSCR loan transaction volume surged significantly in Q3. First, let's discuss HELOC.

Product Mechanism and User Experience: Traditional banks typically take 30 to 45 days to process HELOCs, involving cumbersome offline assessments and notarization. Figure leverages automated valuation models (AVM) and immutable records on the blockchain to achieve an extreme experience of "5-minute approval, 5-day funding." This speed advantage directly addresses market pain points, especially in a high-interest-rate environment where homeowners prefer to obtain liquidity through HELOCs rather than selling their homes to avoid losing their existing low-rate mortgages.

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

HELOC+ is the highest-grade premium loan pool in the protocol. Its underlying collateral consists of HELOC asset packages originated by Figure and its partners and tokenized on the Provenance chain. These assets are of the same credit quality as those receiving S&P's AAA rating.

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

• Borrowers (Individuals/Small Businesses):

  ◦ Apply for Home Equity Lines of Credit (HELOC) or small business loans (SMB) through Figure's 100% digital process.

  ◦ Authorize the system to automatically verify income, assets (AVM automated valuation), and credit scores, achieving "5-minute approval, 5-day funding."

• Origination Partners (Banks, Credit Unions, Independent Mortgage Lenders):

  ◦ Utilize Figure's white-label loan origination system (LOS) to produce standardized credit assets under uniform underwriting standards.

  ◦ Pay Figure technology processing fees based on transaction volume.

  ◦ Place the produced credit asset packages on the Figure Connect marketplace for bidding or sell based on forward commitments, achieving rapid capital turnover without long-term balance sheet occupation.

• Figure Connect Platform (Matching Party):

  ◦ Transform credit assets into "digital twin" tokens on the Provenance chain, ensuring uniqueness and immutability of ownership, composition, and performance history.

  ◦ Match 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, gaining transparent, data-rich credit exposure.

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

2.1.2 First Lien HELOC

In Figure's business model, the cash-out refinance business is being reshaped through its innovative product, "First Lien HELOC." This business is growing extremely fast, with transaction volume nearly tripling year-over-year in the first half of 2025. Next, we explain the core differences between cash-out refinance and HELOC businesses.

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

1. Loan Nature and Credit Structure: Open-End vs. Closed-End

• HELOC: Under legal and regulatory frameworks (such as the Truth in Lending Act - TILA), HELOC is defined as "open-end credit." Its core feature is that homeowners can repeatedly withdraw and repay funds during the specified draw period (usually 2 to 5 years). Figure's HELOC product allows borrowers to make multiple withdrawals as needed without incurring additional out-of-pocket costs or closing costs.
• Cash-Out Refinance: This is typically "closed-end credit." Homeowners apply for a new loan larger than the existing mortgage, pay off the old loan, and receive the remaining cash difference in a lump sum. It is not a revolving line of credit but a one-time debt restructuring.

2. Difference in Lien Priority

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

• Refinance Business: Necessarily involves a "first lien." Since it replaces the old loan with a new one, the new lender obtains the primary lien on the property. One of Figure's fastest-growing products in recent years is the "First Lien HELOC," which is essentially designed as a substitute for traditional cash-out refinance.

3. Efficiency and Cost Differences in Figure's Model

According to Figure's business data, it has achieved a drastic cost reduction in both types of businesses using blockchain technology:

• Cost Comparison: Figure's cost for processing first lien loans (refinance substitutes) is only $1,000, while the industry average cost is as high as $12,000. For traditional HELOCs, Figure's average production cost is only $730, far below the mortgage industry's average cost of $11,230.
• Funding Time: Whether for refinance or HELOC, through Figure's automated loan origination system (LOS), homeowners can typically get approved in 5 minutes, with a median funding time of 10 days, compared to the traditional industry median of about 42 days.

4. Capital Market and Securitization Logic

• HELOC Securitization: Figure has successfully issued multiple asset-backed securities (ABS) supported by HELOCs, with senior tranches repeatedly receiving AAA ratings from Standard & Poor's and Moody's. Since HELOCs are often second liens, rating agencies typically assume their default loss rates are higher than first lien assets.
• Refinance (First Lien) Performance: Since refinance business holds first liens, its assets are more attractive in the capital market, and risk pricing is usually more favorable. Figure's first lien business volume nearly tripled in Q3 2025.

Why are more and more American homeowners choosing First Lien HELOC, and what benefits can they obtain?

◦ Extreme Cost Savings: Figure's first lien production cost is about $1,000, while the industry average cost is as high as $12,000, saving users drastically on closing costs.

◦ Time Efficiency: Approval takes only 5 minutes, and median funding time is shortened from the industry average of 42 days to 10 days.

◦ Flexibility: Obtain lower interest rates than personal loans, and usually have the flexibility to extract equity again in the future.

From the data released in the Q3 financial report:

In Q3 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 transaction volume accounted for 17% of total consumer credit volume. Calculated accordingly, the quarterly transaction amount was approximately $425 million. Its share increased by 650 basis points compared to 10.5% in the same period of 2024.

◦ First Half 2025 Performance: Its transaction volume accounted for 15% of total origination volume. The corresponding transaction amount was approximately $480 million.

◦ Growth Rate: This business showed exponential growth, with transaction volume nearly tripling year-on-year in Q3 2025.

Open-End/Standard HELOC (Usually Second Lien):

◦ Since HELOC accounts for 99% of the total, the vast majority, excluding first liens, 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 held HELOC assets were still in non-first priority positions (i.e., existing as second or third liens).

2.1.3 DSCR Loans

Designed for real estate investors. This product does not look at the borrower's personal income but approves based on the property's rental return rate (DSCR).

DSCR loans are one of the core paths for Figure to expand its successful model沉淀 in the HELOC field to broader consumer credit asset classes.

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

Its participant structure, behavior patterns, and profit distribution logic are highly consistent with HELOC, but the underlying asset attributes focus more on the cash flow of investment properties. In terms of stakeholder profiles, aside from borrowers, it is basically consistent with HELOC.

DSCR loan borrowers are primarily financing rental properties. Borrowers submit applications through portals provided by Figure or its partners. The special feature of DSCR loans is that, in addition to常规 credit assessment, borrowers must provide proof of rental income (usually a lease) to calculate the debt service coverage ratio.

The core logic of DSCR loans lies in "replacing trust with facts (data)." Similar to HELOC, it transforms highly illiquid real estate claims into standardized, homogeneous tokens on-chain, achieving a "Pareto optimization" for the asset side and the funding side: borrowers get money, institutions reduce friction costs, and ordinary DeFi users, originally on the periphery of finance, become co-beneficiaries of these high-quality RWA assets.

2.2 Capital Guarantee and Securitization

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

• Sixth Street (Strategic Joint Venture Partner):

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

• Fig SIX Mortgage LLC (Guarantor Vehicle):

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

  At the operational level, Fig SIX acts as a "standing buyer" on the Figure Connect electronic trading market. This mechanism solves the distribution concerns for origination partners such as banks, credit unions, and independent mortgage lenders, ensuring that the blockchain-native assets they produce receive certain execution and more competitive market pricing. This "always present" bidding mechanism essentially transforms原本 fragmented and opaque private credit trading into a standardized market with efficient price discovery.

  In the structured design of securitization products, Fig SIX's risk hedging function is more significant. When initiating securitization transactions, the vehicle actively retains and holds the "residual equity" or "first-loss portion" in the asset package. This arrangement makes Fig SIX the "chief absorber" of credit risk, bearing losses first in case of defaults in the underlying HELOC loans, thereby protecting the interests of upper-tier creditors.

2.3 DeFi Financing 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, they deposit tokenized credit assets (e.g., HELOC asset packages) generated through the LOS system or crypto assets into smart contracts as collateral. This model allows institutions to obtain real-time liquidity using their held RWA assets, often at a financing cost lower than warehouse lines provided by traditional banks.

  The protocol uses an hourly Dutch auction to determine the clearing利率. Borrowers set the maximum acceptable interest rate, and lenders bid for their target yield. Ultimately, incoming funds are all interest-bearing at the unified market clearing rate. This mechanism ensures instant and fair price discovery, allowing the market to dynamically adjust within a wide利率 range of 1% to 30%.

• Liquidity Providers:

  Figure has successfully "granularized" the private credit market, which was previously only accessible to top financial institutions.

  Ordinary DeFi users can participate in the financing of global credit assets through this protocol with just $100, which is unimaginable in the traditional financial system.

  As of mid-2025, lenders earned an annualized return of nearly 9% through this protocol, significantly higher than holding YLDS stablecoins or returns in traditional money market funds. This吸引力 prompted Figure to further expand this model to Layer 1 ecosystems like Solana and Sui, further amplifying the yield leverage of RWA by introducing PRIME, a liquid staking token.

• Democratized Prime Protocol:

  To ensure the safety of lender funds, Democratized Prime has established a robust risk management system based on code.

  • Asset Perfection: Utilizes DART technology to achieve perfect抵押 rights, ensuring lenders have indisputable legal and technical recourse to the underlying RWA assets.
  • Liquidation Logic: The protocol monitors LTV in real-time. When LTV triggers the 90% threshold, the smart contract automatically initiates an on-chain liquidation process, auctioning off the credit assets through weekly BWIC (Bid Wanted In Competition), with the proceeds优先 used to repay lender principal. Additionally, if market liquidity is insufficient to handle redemptions, the interest rate automatically jumps to 30% to force borrowers to deleverage or attract new capital.

2.4 Interest-Bearing Stablecoins and Payment Settlement

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

• Figure Certificate Company (FCC) (Issuer):

  Unlike most stablecoins in the market based on offshore entities, the core advantage of $YLDS lies in its transparent legal identity.

  FCC's Role: FCC is registered as an investment company under the U.S. Investment Company Act of 1940, specifically issuing face amount certificates, and $YLDS is the digital representation of these certificates.

  Underlying Asset Backing: $YLDS is 100% backed by a portfolio of high-quality, low-risk assets (primarily U.S. Treasury securities and securities held by prime money market funds) held by FCC. This structure ensures asset stability and regulatory traceability, making it suitable for institutional-grade interest-bearing collateral.

• YLDS Holders (Primarily Institutions):

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

  • Yield Model: Holders receive a yield equivalent to SOFR (Secured Overnight Financing Rate) minus 50 basis points. In a macro high-interest-rate environment, this makes $YLDS a better asset choice than traditional non-interest-bearing stablecoins.
  • Payment and Settlement: $YLDS supports 24/7 on-chain peer-to-peer transfers and serves as the default settlement currency on Figure Exchange, allowing users to complete asset swaps within seconds. For example, users can directly use $YLDS to buy Bitcoin, and the system automatically handles underlying exchange rate hedging and clearing.

• Figure Payments Corporation (Funding Channel):

  Due to regulatory restrictions, FCC cannot directly hold general crypto assets like USDC or USDT. Figure introduced Figure Payments Corporation (FPC) to act as a key funding channel.

  • Mirror Order Mechanism: When users buy crypto assets on the exchange using $YLDS, FPC runs a mirror order process in the background. The system matches $YLDS holders with counterparties holding USDC through FPC's own liquidity pool, thereby bridging the boundary between compliant security tokens and the public crypto market.
  • Ecosystem Scale: This compliant architecture saw significant growth in 2025, with its balance rising from about $4 million in Q2 2025 to nearly $100 million in November, and it has expanded to Layer 1 ecosystems like Solana and Sui.

3 Q3 Revenue Breakdown

Figure's performance this quarter can be described as stunning. Its total net revenue reached $156.37 million, with a net profit of $90 million. This nearly 57% net profit margin is extremely rare among traditional financial institutions, fully demonstrating the efficiency重构 of traditional lending business by the blockchain underlying architecture. Behind this profitability is its highly diversified and complementary revenue structure, mainly composed of loan sales, technology fees, loan origination, and ongoing service fees and interest.

Net gain on loan sales, as its largest revenue engine, contributed $63.561 million, showcasing Figure's极强的 asset liquidity in the secondary market. Among this, whole loan sales accounted for $51.72 million. By transferring the complete ownership, risk, and cash flow of Home Equity Lines of Credit (HELOC) to institutional buyers, Figure achieves rapid capital回收. More noteworthy is its $8.266 million in securitized loan income. The company injects standardized loans into special purpose entities (SPEs), issuing bonds from AAA to B- grades. Figure's ability to help these securitization products obtain AAA ratings from agencies like S&P and Moody's is not easy and is entirely due to the data integrity provided by its LOS system and the traceability of the Provenance blockchain, which provides institutional investors with underlying transparency难以企及 in traditional financial markets.

Technology and ecosystem fees contributed $35.691 million this quarter, which is the core differentiator between Figure and ordinary financial companies. Among this, $15.548 million came from technology provision fees, while $16.248 million came from ecosystem fees, the latter essentially being a "market access" or "matching" premium. Figure uses blockchain technology to shorten the traditional, months-long settlement cycle to days or even seconds. This real-time settlement capability is its core asset for attracting ecosystem partners. Through standardized underwriting and document processing, originally non-standard loans are transformed into highly homogeneous, easily tradable digital assets, marking that Figure has successfully transformed from a loan originator to a financial infrastructure provider.

On the business front end, Figure's loan origination fees reached $21.415 million, which includes direct service fees for processing loans, miscellaneous fees at disbursement, and loan discount income. The explosive growth of this part of revenue is inseparable from its highly automated workflow. Figure completely abandons the inefficient model of traditional finance by connecting to borrowers' bank accounts for automatic income verification and using automated valuation models (AVM) to replace time-consuming on-site property assessments. Combined with digital lien matching, automated title search, and remote online notarization, Figure significantly reduces customer acquisition costs and improves user experience. All loan data, after stripping personal privacy, is stored as hash values on the Provenance blockchain, ensuring that assets possess immutable credit attributes from the moment of birth.

In addition to profiting from the "fast-in, fast-out" sales model, Figure also demonstrates deep asset management capabilities. Its interest income recorded $17.864 million, sourced from core HELOC portfolio yields, digital asset-backed personal loans, and approximately 5% risk retention收益 retained during asset securitization. Furthermore, Figure shows crypto-native acumen in cash flow management, optimizing capital efficiency through YLDS stablecoin interest and cash equivalent returns. This combination of "light asset operation" and "strategic risk retention" allows the company to maintain liquidity while also sharing the long-term appreciation红利 of high-quality assets.

The performance of Serviced Assets and Fees reflects the "long-tail effect" of Figure's profit model. The net gain on serviced assets was $9.332 million this quarter, reflecting the fair value of servicing rights retained by the company after selling loans. Although this value fluctuates somewhat 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 securitization trusts, including handling monthly repayments, account maintenance, and investor reports. In the third quarter, its weighted average service fee rate remained around 30 basis points (0.30%), providing a stable recurring income pillar for the company.

Finally, Figure's investment布局 also reflects its role as a deep participant in the crypto space. It recorded $620,000 in "Other" income this quarter, mainly involving share of profits from minority investments in unconsolidated entities. Notably, its holding in the Domestic Solana Fund, which holds SOL tokens acquired through the FTX bankruptcy auction.同时, the收益 from the joint venture Fig SIX with Sixth Street and the compliant investment advisory company Reflow also构建 a complete financial ecosystem闭环 covering credit, investment banking, and compliance consulting.

In summary, Figure's Q3 financial report not only shows strong financial data but also proves to the market that blockchain in finance is not just a gimmick but a productivity tool that can切实 reduce costs, shorten settlement cycles, and improve asset ratings. By哈希化存证 underlying loans and批量 changing asset package ownership on the Provenance blockchain, Figure has established a full-chain digital standard from asset origination, automated review, real-time settlement, to后期 services. This model improves the efficiency of traditional finance while paving the way for broader RWA asset on-chain in the future.

About Movemaker

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

Disclaimer:

This article/blog is for reference 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, is extremely risky, with high price volatility, and may even become worthless. You should carefully consider whether trading or holding digital assets is suitable for you based on your financial situation. For specific circumstances, please consult your legal, tax, or investment advisor. The information provided in this article (including market data and statistical information, if any) is for general reference only. Reasonable care has been taken in compiling this data and charts, but no responsibility is accepted for any factual errors or omissions therein.