How Figure Cut 117 Basis Points from Customer Lending Costs with Cosmos

The $20 trillion consumer lending market faces significant challenges. Lenders rely on fragmented systems, multi-day settlement cycles, and manual reconciliation, which drive high operational costs in an environment where consumers are demanding digital-first experiences.

Figure, America's largest non-bank HELOC lender, built a different system. They brought the loan cycle on-chain using a dedicated blockchain solution built on Cosmos, called Provenance. Their blockchain, Provenance, has enabled them to cut cumulative costs by 117 basis points and can fund loans 3-8x faster than traditional lenders. The production numbers back this up: $17 billion in loan origination volume, over $350M in annual recurring revenue, and a $149M HELOC securitization with leading banks.

Market challenges in lending

The global consumer lending market exceeds $20 trillion. However, players in the market face significant challenges in remaining relevant to consumers and growing their businesses in 2026.

• First, the business model of specialized lenders is facing market pressures, such as increased regulatory burdens and rising interest rates, which are reducing margins.
• Second, McKinsey reports additional market disruptions, including consumer demand for a digital-first experience, the rise of alternative lenders, such as e-commerce giants, and the mainstream adoption of alternative lending models, such as peer-to-peer.

The typical constraints of a consumer lending business - high operating costs, capital inefficiency, and slow reconciliation and settlement - must be addressed for a specialized lender to be competitive.

How Figure Used the Cosmos Stack to Build Its Foundational Ledger

Figure built the Provenance blockchain to move consumer lending workflows into a coordinated, controlled digital ledger using the Cosmos stack. Instead of using blockchain solely as a passive database, Provenance internalizes business rules, compliance logic, and asset lifecycle management directly into Cosmos SDK modules and smart contracts.

The architecture provides four main capabilities:

Real-time settlement

Loan transfers and sales traditionally require multi-day settlement cycles, with separate systems for asset records and payments. This creates counterparty risk, capital drag, and operational complexity. Figure uses its blockchain as the authoritative registry of loan ownership, with settlement logic executed directly on-chain. Ownership records update immediately and irreversibly when a loan is transferred. This allows Figure’s loan sale and origination transactions to settle in real-time.

Figure uses the Cosmos SDK core code modules as the foundational ledger for recording transfers and ownership, while custom modules and smart contracts encode key business events, such as loan lifecycle events and settlement workflows. Transaction completion or finality guarantees from Cosmos’s CometBFT consensus engine enable transactions to settle immediately upon inclusion in a block (~1-2 seconds).

Automated Verification & Reconciliation

In traditional lending, every party keeps separate records. Verifying a loan's state, payment history, and ownership means manually reconciling data across multiple systems.

Figure’s blockchain replaces reconciliation with on-chain verification. Loan origination, servicing actions, transfers, and sales are executed as on-chain transactions, producing a single, shared source of truth on the blockchain, eliminating the need for downstream verification processes entirely. The CosmWasm module from Cosmos’s technology stack enables contracts to trigger asset movements, escrows, and registry updates.

Here's how loan servicing works:

1. Smart contract initiates an ACH payment
2. Bank escrows fiat and issues stablecoin to the servicer
3. Stablecoin gets redeemed, releasing the escrowed fiat with an immutable record
4. Smart contract allocates principal and interest per the loan terms
5. All steps are recorded on-chain for real-time visibility

Unified Digital Identity & Ownership for Loans

Traditional markets handle loan ownership and lien registration in separate systems. This creates delays and mismatches between when ownership transfers and when it gets officially recorded.

Figure's custom marker module represents loans as native on-chain assets with embedded permissions that define who can mint, transfer, administer, or repossess them. Provenance monitors asset movements and automatically updates DART (Figure's digital asset registry and electronic lien system).

As a result, ownership, liens, and transfers occur in a single on-chain process, where assets and funds in secondary market transactions move together in a single transaction between buyer and seller, reducing the risk and costs associated with escrow and custody.

Integrated Confidentiality & Selective Disclosure

Consumer lending involves handling sensitive information (PII and financial documents) that can't be publicly disclosed. Provenance separates data verification from storage.

Sensitive information stays off-chain. The blockchain stores cryptographic hashes that prove data integrity without revealing the actual contents. With these two primitives, Provenance has flexibility on how it moves assets and shares specific messages, enabling access control and selective disclosure.

An example of HELOC securitization savings on Figure's blockchain

A $149M HELOC securitization with leading banks demonstrated how these efficiencies utilizing blockchain break down across the loan lifecycle:

• Origination (23 bps): Eliminated third-party document vaulting, replaced manual validation with on-chain attestations, and removed servicer onboarding fees
• Servicing (26 bps): Automated loan status reporting, eliminated duplicate data feeds, reduced audit labor through shared on-chain records
• Financing (45 bps): Encoded eligibility rules on-chain, enabled real-time verification of borrowing base compliance
• Securitization (23 bps): Automated asset pooling, ownership transfer, and settlement with simultaneous asset and fund release on-chain

Cosmos Interoperability Enables Liquidity & Distribution

Figure’s blockchain Provenance uses the Inter-Blockchain Communication (IBC) protocol, Cosmos’s native first-party interoperability framework, to connect directly with other blockchains, granting them a host of benefits unavailable with other interoperability frameworks.

• Maximum cybersecurity: Unlike other interoperability frameworks, IBC has never been exploited or hacked, despite its five-year production history across more than 200 blockchains. It also includes support for additional industry-leading cybersecurity protections, such as asset flow management and governance controls.
• First-Party Interoperability: IBC enables Figure to directly connect to other ledgers without 3rd-party vendors, token bridges, or other intermediaries. Figure’s clients and customers do not need to be exposed to the cybersecurity practices of unknown third parties or pay additional fees for cross-chain transfers during Figure-processed loan activity.
• Access to stablecoins: Figure uses IBC to onboard USDC and other stablecoins as native assets, meaning they can be used across Figure’s products easily.
• Programmability and service export: Figure uses IBC to distribute loans, equity, or recently stock lending, to other digital ledgers, including consumer-oriented blockchains like Solana. Assets retain the compliance, ownership, and lifecycle guarantees set by Figure, even when transferred to other blockchains.

Additionally, the Cosmos Stack is helping create new business opportunities and open new revenue streams. Figure’s secondary loan marketplace (Figure Connect) provides an institutional investor platform for buying, selling, and trading loans, including loan-to-loan and loan-to-security exchanges in which Figure earns transaction fees for facilitating liquidity and price discovery.

Figure Connect led to a reportable total loan transaction volume of $1.1 billion in Q3 2025, up from $767 million in the previous quarter, representing 46% of Consumer Loan Marketplace volume.

What Comes Next

Figure's model shows what happens when you build financial infrastructure on blockchain from the ground up: faster settlement, lower costs, better capital efficiency.

The Cosmos stack (SDK modules for settlement and compliance, CometBFT for instant finality, IBC for secure interoperability, CosmWasm for automated workflows) provides the technical foundation for this next generation of financial infrastructure.

Learn more about building financial infrastructure with Cosmos at cosmos.network.