How Does Figure Markets Work?
Figure Markets is a hybrid crypto and real-world asset exchange built on the Provenance blockchain, operating as an SEC-registered ATS and broker-dealer. With $1.2B in TVL and backing from Jump Crypto and Pantera Capital ($60M Series A), it offers crypto trading, lending, and YLDS — the first SEC-registered yield-bearing stablecoin. Its C+ grade reflects novel mechanisms (hybrid matching, regulated stablecoin) and rapid scale growth offset by a limited track record.
TVL
$1.6B
Sector
RWA
Risk Grade
C+
Value Grade
C-
Core Mechanisms
Custom (Hybrid Off-Chain Matching / On-Chain Settlement)
NovelOff-chain order matching for speed with on-chain settlement on Provenance blockchain via Security Entitlements (SE)
Trades matched off-chain for performance, settled on Provenance as tokenized Security Entitlements. Novel combination of TradFi matching speed with blockchain settlement finality. Few comparable implementations at this scale.
Custom (SEC-Registered Yield-Bearing Stablecoin)
NovelYLDS: fixed-price daily-accrual stablecoin backed by prime money market fund securities, SEC-registered, paying SOFR minus 50bps
First SEC-registered yield-bearing stablecoin on a public blockchain. Novel regulatory framework combined with on-chain issuance on Provenance. Interest accrued daily, paid monthly in USD or YLDS.
6.2.2
Forward Vault and Demo Prime lending with up to 8-10% APY for cash/crypto lending to other traders
Standard lending/borrowing with interest rate curves. Users lend cash or crypto to traders via the platform.
5.4.1
MPC-based decentralized custody with multi-party key shard approval
MPC wallets distribute private keys across decentralized network, requiring multi-party approval. Eliminates single custodian dependency.
2.1.2
0% trading fees on major crypto pairs (BTC, ETH, SOL, LINK, UNI, USDC) with fee revenue from other services
Standard percentage-based fee model for non-curated assets; subsidized zero-fee trading for major pairs as growth strategy.
How the Pieces Interact
Discrepancy between off-chain matched trades and on-chain settled state could arise if the matching engine is compromised or experiences downtime. Unlike fully on-chain DEXs, the off-chain component introduces trust assumptions around trade execution integrity.
YLDS backing (prime money market securities) and lending operations (crypto/cash to traders) create interconnected risk. A money market disruption could impact YLDS redemptions while simultaneously affecting collateral values in lending pools.
With $1.2B+ in custody across MPC wallets, a coordinated compromise of sufficient key shards could expose a large asset pool. The MPC threshold scheme must be calibrated to resist both external attacks and insider collusion.
Operating as a regulated ATS trading both crypto and traditional securities creates regulatory complexity. Enforcement actions or policy changes in either domain could cascade to affect the entire platform's operations.
What Could Go Wrong
- February 2026 data breach compromised 967,000 user records via Okta SSO social engineering — no on-chain impact but elevates regulatory scrutiny and customer phishing exposure
- Hybrid off-chain matching with on-chain settlement via Provenance blockchain creates a dependency on the centralized matching engine. If the off-chain matching component fails or is compromised, on-chain settlement could be delayed or incorrect, though MPC custody ensures assets remain user-controlled.
- YLDS, the first SEC-registered yield-bearing stablecoin, is backed by money market fund securities and pays SOFR minus 50bps. As a novel regulated instrument, its performance under stress (rapid redemptions, money market disruptions) is untested at scale, with $1.2B+ now locked in the ecosystem.
YLDS Redemption Crisis During Money Market Stress
ModerateTrigger: A money market disruption (similar to March 2020 or September 2008) causes prime money market fund NAVs to drop below $1.00 while YLDS redemption requests exceed $200M in a 48-hour period.
- 1.Money market fund NAVs drop below $1.00 during financial stress — YLDS backing assets lose value relative to the fixed $1.00 peg
- 2.YLDS holders rush to redeem as SOFR-linked yield turns negative or YLDS trades below peg on secondary markets — Redemption queue grows beyond same-day settlement capacity
- 3.Figure Markets gates or delays YLDS redemptions to manage orderly liquidation of money market securities — Secondary market YLDS price drops further as gating triggers panic
- 4.Cross-contagion to Forward Vault and Demo Prime as traders using YLDS as collateral face margin calls — Forced liquidations in lending pools cascade through the platform
- 5.Regulatory scrutiny intensifies on the SEC-registered stablecoin structure — Platform TVL drops sharply as users exit to safer alternatives
Risk Profile at a Glance
Overall: C+ (42/100)
Lower score = safer