Figure Technology Solutions, Inc. has introduced Figure Forge, a financial structuring platform designed to move pools of private credit loans onto blockchain infrastructure by converting them into standardized participation tokens.
Figure Forge gathers loans with differing credit profiles into uniform $1 participation tokens. The company’s capital markets desk is responsible for pricing the loans, while a limit order book maintained on Provenance Blockchain is intended to provide a trading venue and liquidity for those tokens. Holders of participation tokens have the option to redeem them at any time for fiat currency or stablecoin.
Figure operates as a direct-to-consumer lender and reports that it has previously originated, priced, structured and securitized billions of dollars in loans on Provenance Blockchain. The firm will also act as a liquidity provider through its balance sheet, enabling a two-way flow in the token market: it can buy tokens when they trade at discounts, redeem them for the underlying loans and securitize the assets, or originate loans and sell tokens when market prices are comparatively higher.
The platform’s first external partner is Agora Data, a fintech that specializes in auto loans. Under the initial arrangement, Agora’s auto loan receivables will be converted into participation tokens, forming a new Democratized Prime pool. The underlying collateral for that pool is expected to yield more than 8%.
Figure also reports that auto loan pools facilitated through Forge are producing yields above 10%, supported by consumer payment streams. The company anticipates that Figure Forge will broaden its coverage into multiple additional loan categories over the next year and says several more partners have committed to participate.
Context and mechanics
The Figure Forge structure aims to standardize heterogeneous private loan exposures into fungible $1 tokens, enabling them to serve as collateral within decentralized finance (DeFi) systems. Liquidity is facilitated by a Provenance Blockchain limit order book and by Figure’s willingness to provide capital market support and balance-sheet liquidity. Redemption options for token holders include conversion to fiat or stablecoin at any time, a feature the company highlights to maintain access to traditional payment rails.
Outlook
Figure expects to expand Forge beyond auto loans into other loan categories during the coming year, backed by commitments from additional partners. The first partner deployment with Agora Data establishes an initial product offering and a yield reference for future pools.