Bernstein: Figure Q1 Beat Highlights Blockchain Loan Market
Bernstein says Figure’s Q1 revenue and EBITDA topped estimates and that FIGR may track live on-chain loan volumes as the company builds a blockchain-native loan marketplace.
Bernstein analysts wrote that Figure Technology Solutions’ May 11 first-quarter report exceeded Wall Street estimates for both revenue and EBITDA and that the results align with the company’s push to build a blockchain-native loan marketplace.
In a May 15 research note, the team pointed to Figure’s live on-chain data and projected an all-time high in blockchain lending volume in the second quarter. Bernstein added that as market participants improve their ability to monitor live blockchain volumes, FIGR’s share price could more closely follow actual on-chain loan activity.
During the May 12 earnings call, executive chairman and co-founder Mike Cagney discussed liquidity challenges for real-world assets on decentralized finance. Cagney noted, “DeFi is asset-based lending. The premise is that the collateral backing the loan is liquid,” and raised questions about how lenders could take and sell fractional positions in whole loans if loan-to-value ratios are breached. He described Figure’s Forge platform as converting whole loans into small, single-dollar participation units that can trade on-chain.
Chief Executive Michael Tannenbaum framed the company’s advantage in operational terms, describing artificial intelligence as “the brain” and blockchain as “the nervous system” that together allow automation of underwriting, compliance and loan verification.
Bernstein said Figure appears to be assembling a full-stack blockchain capital markets ecosystem designed to collect fees across transactions inside its network rather than depending mainly on traditional interest income. In prior research, the firm estimated a roughly $4 trillion addressable annual market for credit origination across products that could be tokenized, including mortgages, auto loans, home-equity lines of credit and small-business loans.
Industry data shows the current tokenized credit market at about $5.14 billion, indicating limited present adoption relative to the larger opportunity Bernstein outlined. Other projects are developing tokenized credit and related treasury products to link institutional assets with decentralized liquidity.
Figure has expanded beyond home-equity lending into auto loan products through the Hastra DeFi protocol, launched by the Provenance Blockchain Foundation. Hastra recently integrated with the Morpho protocol on Ethereum to open access to additional decentralized liquidity and market participants.
Bernstein connected Figure’s earnings beat and the company’s on-chain activity to the mechanics management described on the call, noting the conversion of whole loans into tradable participation units and the potential for tokenized loans to be used as active collateral in lending markets.
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