Figure Technology Solutions, Inc., which is publicly traded on NASDAQ under the ticker FIGR, has made a significant advancement in the realm of blockchain securities. The company recently filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission (SEC), proposing an offering of its Series A Blockchain Common Stock, a pioneering type of equity fully integrated within blockchain infrastructure.
This innovative offering is portrayed as a transformative development in capital markets, as it will utilize blockchain technology for issuance instead of traditional market systems. The Blockchain Stock will function as a native blockchain equity class, exclusively trading on Figure”s alternative trading system. Furthermore, investors will have the option to convert these securities into Figure”s Class A Common Stock on a one-to-one basis. This new structure also provides holders access to a borrowing and lending framework through Democratized Prime, a decentralized finance protocol hosted on the Provenance Blockchain.
In contrast to conventional stocks that are held through the Depository Trust & Clearing Corporation, the Blockchain Stock will rely entirely on blockchain transactions and settlement processes. This allows users to manage and trade their securities directly through self-custody blockchain wallets, eliminating the need for centralized intermediaries. By bypassing traditional brokerage channels, users can engage with the system via blockchain wallets, while decentralized finance mechanisms will take over traditional stock lending functions.
Company leadership emphasized that this initiative marks a pivotal moment for operational efficiency and risk management in capital markets. They framed it as a shift away from reliance on outdated infrastructure, suggesting that this move could redefine how public equities are issued and traded in the future, potentially resulting in lower costs and enhanced transparency compared to traditional trading methods.
The Blockchain Stock is anticipated to trade continuously, around the clock, which Figure asserts will remove opacity from the stock lending market. This transparency allows token holders to identify and capitalize on lending opportunities, especially during times when lending rates are high. The ability for stock holders to lend their shares in a transparent manner stands out as a significant improvement over legacy systems, where intermediaries manage stock locate markets.
Figure highlighted several firsts associated with this offering. The Blockchain Stock will uniquely exist on the Provenance Blockchain and will be assigned a specific CUSIP. It will also be the first public equity security to utilize stablecoin-only settlements, with Figure”s SEC-registered stablecoin, referred to as YLDS, designated for managing all settlement and bid encumbrances in the secondary market. This structure further supports cross-asset collateralization via Democratized Prime, allowing investors to leverage several blockchain assets at once.
Moreover, direct on-chain governance will empower shareholders to vote without relying on proxy intermediaries, with blockchain serving as the authoritative record of ownership and voting rights. Figure is also planning to facilitate a seamless exchange between the Blockchain Stock and shares traded on NASDAQ through its Treasury function.
While the precise number of shares and their price range for the offering have not yet been determined, Figure indicated that the completion of this initiative will be contingent on market conditions. The offering is structured to be non-dilutive, as current investors will sell Class A Common Stock to underwriters—including Goldman Sachs, Morgan Stanley, and Cantor—who will then provide Blockchain Stock to buyers. Figure intends to acquire an equivalent number of Class A shares to retain in treasury, thereby maintaining balance and facilitating future conversions.
This endeavor places Figure at the forefront of blockchain capital markets, presenting a model that has the potential to revolutionize the issuance, trading, and governance of public equities.
