Mike Cagney has been right here earlier than, simply not with blockchain.
In the early 2010s, he helped reshape client lending with SoFi by connecting debtors instantly with capital. Now, at Figure Technology Solutions (FIGR), he mentioned he’s attempting to do one thing related on a a lot bigger scale: rebuild the infrastructure of credit markets themselves.
The plan could also be working. Figure crossed $1 billion in month-to-month mortgage originations for the primary time in March, a part of a $2.9 billion first quarter that places the agency on roughly $12 billion in annualized quantity.
Cagney, who’s talking at Consensus Miami convention subsequent week, instructed CoinDesk that the objective is to construct new plumbing for these markets.
“We’re building a marketplace where credit can move efficiently, without all the traditional layers,” he mentioned.
Three levers of worth
Cagney broke Figure’s mannequin into three core benefits.
The first is price. Tokenizing loans reduces the friction and expense of securitization, reducing out intermediaries which have traditionally taken vital charges.
The second is liquidity. Figure has constructed what it describes as one of many solely constantly updating marketplaces for client credit exterior of government-backed mortgage techniques like Fannie Mae and Freddie Mac.
“The loans update in real time, which creates a different kind of market,” Cagney mentioned.
The third is entry. By bringing these property onchain, Figure can plug them into decentralized finance (DeFi), permitting a broader vary of traders to achieve publicity, or borrow towards them.
That’s the place the mannequin begins to blur the road between conventional finance and crypto, Cagney mentioned.
Figure’s newest push is into what Cagney calls “democratized prime,” essentially opening up prime brokerage-style lending to a wider audience.
Through products like its Forge platform, loans are pooled into standardized vaults and converted into tokens that can be used as collateral in DeFi protocols. That standardization is key.
“DeFi only works if the collateral is liquid and transparent,” he said.
Figure has launched related initiatives on networks like Solana, with plans to expand to Ethereum, allowing users to invest in tokenized credit pools or borrow against them.
The company is also experimenting beyond loans.
It has introduced a yield-bearing stablecoin, YLDS, backed by traditional assets like Treasurys, with roughly $600 million in balances, and is exploring tokenized equities, issuing its own stock onchain in a way that allows investors to lend against it directly.
Cagney pointed to a stark inefficiency in traditional markets. Stock lending can carry borrow rates of 30% or more, while investors often receive only a fraction of that yield.
“We can put that value back in the hands of the asset owner,” he said.
Pragmatic blockchain
For all the ambition, Cagney is quick to draw boundaries.
Not everything belongs onchain, he said. Tokenizing property itself, for instance, may not be an efficient use of capital. But financial abstraction, meaning loans, securities and equity are a different story.
That pragmatism reflects a broader critique of the crypto industry, which he said has often chased ideas without clear economic grounding.
“A lot of things were done just for the sake of it,” he said. “What matters is, does this actually improve the system?”
Figure’s growth suggests, at least in one corner of the market, the answer may be yes. The company is profitable, scaling, and approaching $30 billion in cumulative originations. That’s still small relative to traditional finance, but it’s large enough to be noticed.
Cagney said he sees much more room to run.
“Blockchain is the most transformative technology, and it will reallocate more public market cap than any technology ever has,” he mentioned. “There are whole industries that are going to disappear when it becomes ubiquitous. Someone has to do the work to get there, and that’s exactly what we’re doing.”
Read extra: Private credit may be the breakout use case for tokenization: Maple’s Sidney Powell
