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Figure Technologies Aimsfor Nasdaq IPOA Deep Diveintoits Blockchain Lending Model

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  Published in Science and Technology on Tuesday, August 19th 2025 at 3:56 GMT by Tim Hastings, CoinTelegraph
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Figure Technologies, a company blending blockchain technology with mortgage origination and servicing, has officially filed with the U.S. Securities and Exchange Commission (SEC) to launch an initial public offering (IPO) on the Nasdaq exchange. While the exact pricing and number of shares remain undisclosed, the move signals a significant step for the fintech firm and offers a glimpse into the evolving landscape of decentralized finance (DeFi) within traditional financial systems. This article explores Figure’s business model, its use of blockchain, the potential risks and rewards associated with its IPO, and what this development means for the broader industry.

The Genesis: Bridging Blockchain and Mortgages

Founded in 2017 as Milo Loans, Figure initially focused on streamlining the mortgage process using blockchain technology. Recognizing the inefficiencies inherent in traditional lending – lengthy paperwork, manual verification processes, and high operational costs – the company sought to leverage distributed ledger technology (DLT) to create a more transparent, efficient, and secure system. The rebranding to Figure Technologies reflected this expanded vision, encompassing not just origination but also servicing of loans.

At its core, Figure’s platform, known as Provenance, utilizes blockchain to record and manage loan data. This allows for near real-time tracking of transactions, automated document verification, and reduced reliance on intermediaries. The company claims that Provenance can significantly reduce the time and cost associated with mortgage origination and servicing, benefiting both borrowers and lenders.

Provenance: More Than Just a Blockchain Application

While Figure highlights its use of blockchain, it’s crucial to understand that Provenance isn't a fully decentralized application in the traditional DeFi sense. It operates on a permissioned blockchain – meaning access is controlled and limited to authorized participants – rather than a public, open-source network like Ethereum. This design choice allows for greater regulatory compliance and control over data security, which are paramount concerns within the heavily regulated mortgage industry.

The platform integrates various functionalities: loan origination, servicing, automated underwriting, and even securitization. It facilitates the creation of digital loan documents (eNotes), automates payment processing, and provides a centralized repository for all loan-related information. This integrated approach aims to create a seamless experience for borrowers, lenders, and investors.

The IPO: A Test of Market Appetite for Blockchain Fintech

Figure’s decision to pursue an IPO is significant for several reasons. Firstly, it represents a validation of the company's business model and its potential for growth. The filing indicates that Figure believes it can achieve profitability and generate substantial returns for investors. Secondly, it provides a window into how traditional financial markets view blockchain-based companies. A successful IPO could pave the way for other fintech firms leveraging DLT to access public capital markets.

However, the IPO also carries inherent risks. The company has yet to consistently demonstrate profitability, relying heavily on partnerships and volume growth to drive revenue. Furthermore, regulatory uncertainty surrounding cryptocurrencies and blockchain technology remains a significant factor that could impact investor sentiment. The SEC filing itself highlights these risks, including potential changes in interest rates, competition from traditional lenders, and the possibility of cybersecurity breaches.

Key Partnerships and Revenue Streams

Figure’s success is heavily reliant on its partnerships with major players in the mortgage industry. These include:

• Rocket Mortgage (formerly Quicken Loans): A significant early adopter of Provenance, Rocket Mortgage utilizes the platform for a portion of its loan origination volume.
• Goldman Sachs: Figure has partnered with Goldman Sachs to create and manage warehouse lines of credit, facilitating the funding of loans originated through Provenance.
• Blackstone: Figure’s subsidiary, Figure Lending LLC, is backed by Blackstone, providing a substantial capital base for loan origination.

The company generates revenue primarily through:

• Origination Fees: Charged to lenders for using the Provenance platform to originate loans.
• Servicing Fees: Earned from servicing existing loans on the platform.
• Technology Licensing: Potential future revenue stream from licensing the Provenance technology to other financial institutions. Looking Ahead: The Future of Blockchain in Lending?

Figure’s IPO represents a pivotal moment for the intersection of blockchain and traditional finance. While the company's approach utilizes a permissioned blockchain, it still demonstrates the potential for DLT to improve efficiency, transparency, and security within the mortgage industry. The success or failure of Figure’s IPO will undoubtedly influence how investors perceive other blockchain-based fintech companies seeking public funding.

Whether Provenance can truly revolutionize the lending process remains to be seen. However, Figure's ambition to build a more efficient and transparent financial system using blockchain technology is undeniable, and its journey towards becoming a publicly traded company will be closely watched by industry observers and investors alike. The IPO filing provides valuable insight into the challenges and opportunities facing companies attempting to bridge the gap between decentralized finance and the established world of traditional banking.