Figure Launches Blockchain-Based Platform for Tokenized Equity Issuance and Lending in 2024
- What Is Figure’s OPEN Platform?
- How Does OPEN Disrupt Traditional Equity Markets?
- Who Are OPEN’s Early Adopters?
- What’s the Role of Prime Brokers in This New System?
- How Does Equity Lending Work on OPEN?
- What Are the Risks?
- Why This Matters Beyond Crypto
- Final Thoughts
- Frequently Asked Questions
Figure, a fintech innovator, has unveiled its On-Chain Public Equity Network (OPEN), a groundbreaking blockchain platform enabling companies to issue and trade tokenized equities directly on the Provenance blockchain. By eliminating traditional intermediaries like custodians and brokers, OPEN aims to revolutionize capital markets. Early adopters include digital asset trusts (DATs), which could leverage OPEN to bridge valuation gaps. The platform also introduces peer-to-peer equity lending, disrupting prime brokers’ roles. Here’s an in-depth look at how OPEN works and its potential impact.
What Is Figure’s OPEN Platform?
Figure’s OPEN is a decentralized ecosystem for issuing, trading, and lending tokenized equities. Unlike synthetic assets or derivatives, OPEN’s tokens represent direct ownership of company shares. Built on Provenance Blockchain—known for its institutional-grade infrastructure—the platform allows investors to transact 24/7 using cryptocurrencies or fiat. In my experience, such systems reduce settlement times from days to minutes while cutting costs by up to 80% compared to traditional markets.
How Does OPEN Disrupt Traditional Equity Markets?
Mike Cagney, Figure’s CEO and ex-SoFi head, bluntly states: “We’re removing everything—no central depositories, no stock exchanges, no retail brokers.” OPEN’s model replaces legacy systems with smart contracts that automate compliance (like KYC/AML) and dividend distributions. For example, a Solana-based DAT could issue shares directly to crypto wallets, with investors paying in SOL. Trading occurs on Figure’s decentralized exchange, bypassing Nasdaq or NYSE. Data from CoinMarketCap shows DATs currently trade at 30-60% discounts to NAV; OPEN could arbitrage this gap.
Who Are OPEN’s Early Adopters?
Digital Asset Trusts (DATs)—like Bitcoin-heavy Strategy Inc.—lead the charge. These firms hold crypto assets but trade at steep discounts due to liquidity issues. Cagney notes OPEN lets them “launch tender offers to bring shares back to NAV.” Other candidates include:
- VC-backed startups seeking alternative IPO paths
- Real estate SPVs tokenizing property equity
- Crypto-native firms avoiding SEC registration (for now)
What’s the Role of Prime Brokers in This New System?
While OPEN marginalizes traditional brokers, it creates niches for “crypto-prime” services. Prime brokers might evolve into:
| Role | Example |
|---|---|
| Cross-margin providers | Offering leveraged positions across tokenized equities |
| Liquidity hubs | Aggregating order flow for illiquid tokens |
As one BTCC analyst quipped, “It’s less ‘cutting out the middleman’ and more ‘rebuilding the middleman in code.’”
How Does Equity Lending Work on OPEN?
Investors can lend/borrow shares peer-to-peer via smart contracts. Need to short a DAT? Borrow its tokens directly from holders at algorithmically set rates—no locate fees or broker loan desks. Historical data from TradingView suggests crypto equity lending could grow into a $20B market by 2025.
What Are the Risks?
Regulatory uncertainty tops the list. The SEC hasn’t clarified if OPEN’s tokens qualify as securities. Also, Provenance’s throughput (~1,000 TPS) may struggle during volatility. And let’s be real—crypto’s “self-custody” MANTRA terrifies institutions used to FDIC insurance.
Why This Matters Beyond Crypto
OPEN isn’t just a crypto play. Imagine a small business in Miami issuing tokenized equity to local investors via OPEN, bypassing investment banks. Or a Tokyo startup doing a Reg A+ offering globally without intermediaries. The implications for financial inclusion are staggering.
Final Thoughts
Figure’s OPEN could democratize equity markets like DeFi did for lending. But as with any disruption, the road ahead is bumpy. Will regulators play ball? Can security be guaranteed? One thing’s clear: the 2024 capital markets just got a lot more interesting.
Frequently Asked Questions
Is OPEN live now?
Yes, Figure launched OPEN in Q1 2024, with its own equity being the first tokenized offering.
Can I trade OPEN tokens on BTCC?
Not currently, but BTCC lists similar blockchain equity products. Always check their official site for updates.
How are dividends handled?
Smart contracts auto-distribute dividends in stablecoins or the token’s native currency.
