Mike Cagney has been here before, just not with blockchain.
In the early 2010s, he helped reshape consumer lending with SoFi by connecting borrowers directly to capital. Now at Figure Technology Solutions (FIGR), he says he’s trying to do something similar on a much larger scale: rebuild the infrastructure of the credit markets themselves.
The plan may work. The figure surpassed $1 billion in monthly loans for the first time in March, part of a first quarter of $2.9 billion, bringing the company to annualized volume of about $12 billion.
Cagney, who is speaking at the Consensus Miami conference next week, told CoinDesk that the goal is to build new plumbing for these markets.
“We are building a marketplace where credit can move efficiently, without all the traditional layers,” he said.
Three levers of value
Cagney broke Figure’s model into three core benefits.
The first is the cost. Tokenizing loans reduces the friction and costs of securitization, cutting out intermediaries who have paid significant fees in the past.
The second is liquidity. Figure has built what it describes as one of the few continuously innovating consumer lending marketplaces outside of government-backed mortgage systems like Fannie Mae and Freddie Mac.
“The loans are updated in real time, creating a different kind of market,” Cagney said.
The third is access. By bringing these assets on-chain, Figure can connect them to decentralized finance (DeFi), allowing a broader range of investors to gain exposure or borrow against them.
That’s where the model starts to blur the line between traditional finance and crypto, Cagney said.
Figure’s latest effort involves what Cagney calls “democratized prime,” making prime brokerage-style lending accessible to a broader audience.
Through products like the Forge platform, loans are aggregated into standardized vaults and converted into tokens that can be used as collateral in DeFi protocols. That standardization is crucial.
“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 or borrow against tokenized credit pools.
The company is also experimenting outside of lending.
It has launched a yield-bearing stablecoin, YLDS, backed by traditional assets such as government bonds, with a balance of roughly $600 million, and is exploring tokenized equities, where it issues its own shares in a way that allows investors to borrow against them directly.
Cagney pointed to major inefficiencies in traditional markets. Equity loans can have interest rates of 30% or more, while investors often receive only a fraction of that return.
“We can return that value to the owner of the asset,” he said.
Pragmatic blockchain
Despite all his ambition, Cagney is quick to draw boundaries.
Not everything belongs in the chain, he said. For example, tokenizing ownership in itself may not be an efficient use of capital. But financial abstraction, i.e. loans, securities and shares, is a different story.
That pragmatism reflects a broader criticism of the crypto industry, which he said has often chased ideas without a clear economic basis.
“A lot of things have been done just for the sake of it,” he says. “The bottom line is: does this actually improve the system?”
The growth in numbers suggests the answer, at least in one corner of the market, may be yes. The company is profitable, scalable and approaching $30 billion in cumulative originations. That’s still small compared to traditional finance, but big enough to be noticed.
Cagney said he sees a lot more room to run.
“Blockchain is the most transformative technology and will redistribute more public market capitalization than any technology ever has,” he said. “There are entire industries that will disappear if it becomes ubiquitous. Someone has to do the work to get there, and that’s exactly what we’re doing.”
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