How Figure’s HELOC Model Evolved Into an Ecosystem for Tokenized Home Equity Lending

Figure has turned the traditional HELOC, a home equity line of credit, into a fully digital product and then tokenized the entire loan portfolio on its own blockchain platform, building a broader ecosystem around it. The result is a multibillion-dollar digital asset that underpins a new infrastructure for private on-chain lending. This article explains how that ecosystem works, what makes it noteworthy, and why it’s been so successful.

Why HELOC Became Figure’s Starting Point

HELOC (Home Equity Line of Credit) is one of the most common consumer lending instruments in the United States. It is a credit line secured by a borrower’s home. The borrower receives access to an approved limit and can draw funds in portions, repay them, and borrow again.

Despite strong collateral and relatively large average loan sizes, the HELOC market remained technologically conservative for many years. Property valuation, document checks, and lien recording all happened offline. These steps often took weeks, required multiple intermediaries, and slowed the sector’s development.

At the same time, the combination of high demand and outdated infrastructure made HELOC an ideal candidate for digital transformation. Several features of the product reinforced this:

1. Record keeping and documentation requirements can be easily standardized.
2. The loan is secured by a real asset, which simplifies risk modeling.
3. The payment and collateral structure can be converted into a transparent digital asset tied to the principal balance, repayment terms, and portfolio quality.

For Figure, this market became the starting point. The company first set out to reduce HELOC processing times from weeks to a few days. It then moved loan accounting, servicing, and the transfer of rights to its own blockchain network. As a result, a traditional consumer lending product became the centerpiece of one of the first large-scale attempts to tokenize consumer debt in the United States.

From SoFi to Tokenized Lending and an IPO: The Story of Figure

Figure was founded in 2018 by Mike Cagney and June Ou, former senior executives at SoFi, one of the most prominent FinTech companies in the United States, with a strong focus on consumer lending. Their experience in a fast-growing lending business and in SoFi’s corporate infrastructure shaped Figure’s approach. From the beginning, the company set out to automate and reduce the cost of processes related to HELOCs.

The first versions of Figure’s product focused on digitizing the HELOC experience. The company introduced a fully online application process that reduced loan origination times to about a week. This was a meaningful differentiator in the market.

At the same time, Figure began building its own technology infrastructure. In 2019 and 2020, the company launched Provenance, a private enterprise blockchain platform designed to maintain loan registries and support transactions involving debt assets. Over time, the network became the foundation for recording loan rights, managing electronic lien documents, enabling securitizations, and supporting the full life cycle of digital assets. This allowed Figure to move a significant share of back-office functions into a digital environment, lower operating costs, and remove intermediaries.

Figure continued to expand rapidly:

1. In 2021, Provenance became a public blockchain network, allowing loan accounting and operations to run in a scalable on-chain environment.
2. In 2021 and 2022, the product suite grew quickly. New programs for extracting home equity, investor-oriented products, and tools for securitization appeared.
3. In 2023, the company completed its first deals with major Wall Street banks, signaling institutional confidence in the technology.
4. In 2023 and 2024, Figure began turning its infrastructure into a technology platform for external lenders.
5. In 2024 and 2025, the company launched new on-chain components, including the Figure Markets platform, the YLDS stablecoin, on-chain funding mechanisms, and the FIGR_HELOC token.
6. In September 2025, Figure Technology Solutions, Inc. completed a successful IPO and reinforced its status as an infrastructure provider operating at the intersection of traditional credit markets and blockchain technology.

The IPO raised $787 million, valuing the company at $5.3 billion. Around the same time, the FIGR_HELOC token, introduced shortly before the public offering, quickly moved into the upper half of the second tier of the largest crypto assets. Its market capitalization exceeded $14.5 billion and continued to grow.

Figure’s Ecosystem, Products, and Architecture

As it grew, Figure built a financial technology ecosystem that brings together tools for digitizing HELOCs and the on-chain infrastructure needed to tokenize loans and support the circulation of digital assets. All components of the Figure ecosystem form a single framework that covers the full life cycle of digital lending products.

HELOCs and Other Digital Lending Products

For borrowers, Figure’s HELOC remains a traditional credit product, but the entire process is delivered in a fully digital format:

• The application is submitted online
• Data verification is automated
• Property valuation is conducted remotely
• The closing is completed through electronic documents

The key feature is that the borrower receives the full initial loan amount upfront and can reuse repaid funds within the approved limit. In practice, it combines elements of a lump-sum loan and a flexible credit line while keeping the structure of a HELOC.

Every step, from the initial application to lien recording, runs through Figure’s Loan Origination System, or LOS, and is automatically logged on the Provenance blockchain network. This provides transparency for investors and allows the product to integrate into downstream on-chain processes.

Beyond HELOCs, Figure also develops other forms of secured lending, including cash-out refinancing, DSCR loans, and loans backed by crypto assets. All of them are processed through the same digital system and are recorded within the company’s unified infrastructure, which makes it possible to originate and fund them within a single technology framework.

Figure’s Technology Infrastructure

One of the core elements of Figure’s infrastructure is Provenance, a public blockchain network built on the Cosmos SDK and designed to manage loan obligations and transactions involving debt assets. It stores data on originated loans, supports the transfer of servicing rights, handles securitization workflows, and enables market participants to interact without intermediaries.

Another key component of Figure’s architecture is the Digital Asset Registration Technologies system, or DART. It performs several functions:

• It maintains the registry of collateral
• It records electronic promissory notes, or eNotes, and servicing rights
• It updates loan statuses based on on-chain data

Put simply, DART is a digital registry that automatically updates legally significant information related to a loan and its collateral. It is a hybrid system that works as an overlay on top of the blockchain network. It combines on-chain data, legal and operational documents, and information from Figure LOS and other internal systems.

The architecture also includes BlockVault, a multi-party operational layer that defines the rules for servicing tokenized loans and allocating rights among participants. BlockVault links the on-chain asset record with off-chain servicing processes, which ensures accurate cash flow management and the proper transfer of servicing rights.

This hybrid infrastructure allows Figure to standardize all documentation, eliminate manual operations, and ensure automatic status updates throughout the life cycle of each loan.

Loan Tokenization and Digital Assets

Each loan originated by Figure becomes a unique digital asset thanks to Provenance. The asset contains key loan parameters, including the balance, payment schedule, status, collateral information, and the movement of the principal. This on-chain record effectively replaces the traditional set of documents that make up a loan file.

Once the digital asset is created, the loan can be:

• Added to a securitization pool
• Used as collateral in funding transactions
• Included in Figure’s broader digital portfolio

Tokenization makes the loan suitable for automated accounting, fast transfers between investors, and integration into on-chain funding mechanisms.

FIGR_HELOC Token

FIGR_HELOC is a tokenized accounting unit tied to the portfolio of loans that Figure originates and tokenizes. Each token corresponds to one dollar of outstanding principal, which is why its market price naturally stays near that level.

The token is used to support on-chain loan funding. It functions as a digital representation of a share in the loan portfolio and serves as collateral within Figure’s trading infrastructure. As a result, FIGR_HELOC is a technical component of the architecture that enables private credit assets to move into an on-chain environment. It isn’t meant to be an investment product or a store of value.

DeFi Ecosystem Built Around FIGR_HELOC

Figure’s decentralized financial ecosystem, built around the FIGR_HELOC token, includes two core components:

1. Figure Markets. This is a trading platform for tokenized assets. It provides liquidity for FIGR_HELOC and offers tools for transactions between institutional and retail participants.
2. Democratized Prime. This is an on-chain lending and funding mechanism based on a collateralized borrowing model. FIGR_HELOC is used as collateral, and transactions are executed through short auction cycles that determine the market price of funding for lenders.

The ecosystem also uses YLDS, a dollar-denominated stablecoin registered with the United States Securities and Exchange Commission, or SEC, and backed by traditional financial instruments. YLDS serves as a settlement asset and a liquidity instrument for participants in on-chain funding. It complements an architecture in which FIGR_HELOC represents credit risk and YLDS functions as a low-risk settlement tool.

Figure Connect Platform

Alongside its DeFi ecosystem, Figure also develops Figure Connect, a B2B marketplace that facilitates interactions between lenders and institutional investors. The platform standardizes the sale and funding of tokenized loans and functions as a market where Figure’s digital assets can move from originating lenders to buyers and funding partners. More than 170 major credit market participants are connected to the platform.

For external lenders, Figure Connect provides access to Figure’s infrastructure without requiring them to build their own digital workflows, collateral management systems, or documentation processes. Standardized forms, unified data sets, and automatic loan status updates simplify transactions and shorten funding timelines.

For institutional investors, the platform offers access to uniform digital assets that can be used in securitizations, in prearranged forward purchase transactions, or as collateral in funding operations. As a result, Figure Connect creates a layer of liquidity and credit risk distribution that complements on-chain mechanisms and links the traditional credit market with Figure’s digital architecture.

Regulation of Figure’s Operations

Figure operates in full compliance with U.S. regulatory requirements at both the federal and state levels. The company is officially registered as a lender in the National Multistate Licensing System, or NMLS. By the end of 2024, its products were available to homeowners in 49 states and the District of Columbia, which means the company was operating across almost the entire country.

Figure’s compliance framework combines traditional lending licenses with the use of electronic documentation. Legally binding originals are represented by electronic promissory notes and lien records created in accordance with ESIGN and UETA requirements. Blockchain solutions serve as a technological layer for recording and routing servicing rights, while legal enforceability is ensured through full adherence to U.S. housing and consumer credit regulations.

Figure’s Scale and Its Impact on the Market

The scale of Figure’s operations is one of the clearest indicators of market confidence. According to the company, more than 200,000 families have used its lending services. The IPO prospectus noted that since the company’s founding, the total volume of on-chain home equity credit products has exceeded $16 billion, and the company’s blockchain infrastructure has processed more than $50 billion in transactions.

Deals with institutional investors and funding partners provide another strong signal of trust. In 2025, Figure and the investment firm Sixth Street created a joint venture. Sixth Street is committed to investing $200 million of its own capital and to providing more than $2 billion in liquidity for transactions involving non-agency mortgage assets on Figure’s infrastructure.

A major milestone was the $355 million securitization of Figure’s mortgage assets, completed in June 2025. It was the first blockchain-based pool to receive S and P Global Ratings across the full structure of bond classes, from AAA to subordinated levels.

The company’s filings for the first nine months of 2025 also show that the five largest loan buyers acquired a combined $2.7 billion of outstanding principal, and the total volume of securitized assets reached nearly $875 million. All of this highlights the active participation of institutional capital in the circulation of Figure’s digital credit products.

By 2025, Figure had become the largest nonbank provider in the U.S. HELOC market and one of the leading players in the tokenized private credit space. Overall, Figure’s trajectory is a clear illustration of how traditional credit markets are rapidly transforming under the influence of digitization and blockchain technology. The sector is shifting from fragmented and outdated processes to a more unified, dynamic, programmable, and transparent financial framework.