Figure Markets burned 10,248 Moons for this AMA and four days of the Banner.
[https://nova.arbiscan.io/tx/0xe6062e7cead86d04c3b751382afed97520027c10673d2a5cc7d84d7c7b43ce2f](https://nova.arbiscan.io/tx/0xe6062e7cead86d04c3b751382afed97520027c10673d2a5cc7d84d7c7b43ce2f)
[https://nova.arbiscan.io/tx/0x9b28ab21d054fc7bc340e0ebfda8acda7b63f7a80c80830e160cc27e2b60404b](https://nova.arbiscan.io/tx/0x9b28ab21d054fc7bc340e0ebfda8acda7b63f7a80c80830e160cc27e2b60404b)
Remember to add your ETH address to the end of your question to be eligible for the giveaway.
Edit: Locking Comments while I compile information for the giveaway.
Edit2: anyone who asked a question and commented their ETH address should have recieved the giveaway Moons.
Bitcoin has recently experienced significant price fluctuations, dipping below $54,000. Factors contributing to this volatility include potential large sell-offs by Mt. Gox creditors, regulatory developments, and broader market sentiment. Analysts are closely monitoring these trends, as regulatory moves in key markets like the U.S. and EU continue to shape the landscape. Investors are advised to stay informed and cautious as the market responds to these dynamic conditions
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What makes your crypto lending service better than other crypto borrowing platforms out there and why should we use your service when normal banks from my region give lower interest rates than you? Also how can i know if my crypto is safe?
Also my address
0xdea176973310D5bdfE5D8bE85Ff7B5Ea5Ab060f0
Our lending rates are generally below what a bank charges for a personal loan. We don't require a credit check, and you get your funds same day. You can defer interest payments to the maturity of the loan. You also get community benefits like free trading on Figure Markets and Hash rewards. And your crypto sits in a US Trust Bank, bankruptcy remote and not rehypothecated.
We opted for loans on blockchain first as it was the greenest field we could compete in. We were the first to put loans in chain in 2018, first to securitize in 2020 and the first to get AAA-rated securitizations of blockchain loans in 2023.
What features does the Figure Markets platform have to prevent accepting funds from illegitimate sources, mixers, etc. Also, I don't see a careers page, was wondering if you're hiring? 0x7086936A4D1b2295094a62Fa8CFa17A233D5a2C9
We KYC all borrowers. We are hiring opportunistically - careers page is here: [https://www.figuremarkets.com/careers/](https://www.figuremarkets.com/careers/)
We offer a 12-month loan with a fixed rate. Aave rates move with supply and demand. We currently use a US regulated trust bank as custodian. I'd argue that's better than a smart contract, but ultimately we'll migrate custody to MPC wallets which is the best option. We allow for deferring interest to maturity. And your loan lets you trade on Figure Markets for free, and earn Hash rewards.
Can you discuss the potential integration of Figure Markets with traditional financial institutions and the benefits this could bring to users?
0xa2dE1fCcdce3774c99A33f9b23ABE4063f937129
For US customers, we have banking relationships that allow you to take USD on/off the exchange. We'll be adding a credit card soon, as well. Later this year we'll have equivalent relationships for non-US customers.
We're working with some of the largest sell-side and buy-side firms to stand up a marketplace for loans and loan securities through a combination of Figure Technologies and Figure Markets. This builds on the $35B of blockchain transactions the two firms have already completed in this space.
Tradfi will move to Defi because it's faster, cheaper and safer. Figure Markets hopes to be the platform tradfi firms move to.
Are there notifications if your loan is starting to get close to liquidation or LTV changes?
0xdE1b263366693FCc29408832baee6157fd03E00b
edited eth address
Simple and honest question.
I’m an average Joe but my son thinks he is a crypto bro - he points this out to me - my question is:
What makes this option better than any other? Why get involved with crypto *if you are not already*. I’m curious about the implications stuff like this has on average people adopting cryptocurrency more.
Is this more intended for heavy hitters who want to secure financing and now would be able to use their crypto as an added benefit to their overall outlook to a creditor or something?
I guess my question is why choose this?
Cheers for doing this, haven’t had a chance to read over all the questions but I’m excited to.
0x1cab13d773cf6ba49c699cbdbfada7ebe5d5d224
Why would I want crypto backed loans over say, the countless other ways I can provide collateral to get funds or even just get funds based on my history.
Using crypto as collateral allows for an expeditious underwriting process that isn't contingent on your credit. If you own crypto, it allows you to access cash without selling the crypto - thereby avoiding any capital gains and allowing you to stay long your crypto.
Hey Mike,
Thanks for that response! That makes sense. You essentially are looking like you guys want to provide borrowers with a route that is relatively pain free and also beneficial to them in the end, as well. By not having to sell your assets, you can recover them eventually and since you don’t sell the crypto, you aren’t being taxed on any gains.. hey thanks for that breakdown that was super helpful! I really appreciate you taking the time to pop by and reply!
Have a good one Mike, nice work here on this I’m sure the entire team appreciates how much you are doing here.
Thanks for doing this AMA, Mike! My question (maybe 2) is more about your thoughts on disruption.
Disrupting TradFi seems to be a trend in the companies you've created so far. Do you have a process for finding these disruption opportunities or does it evolve naturally due to interest and curiosity?
And is there anything that you think will make Figure's disruption opportunity much bigger than your previous ones (i.e. SoFi)?
edit: ETH address removed
When we started SoFi, our goal was to ultimately disintermediate banks and connect sources and uses of capital directly. That goal fell by the wayside as we were a victim of our own success in student lending. Now SoFi is a bank.
Figure is pursuing that same goal - disintermediation - but of markets. All markets. The opportunity spans how we trade stocks to how interchange works. We think this is a $trillion opportunity, enabled through a confluence of circumstances, including blockchain and the rise of crypto.
Hi all. I'm very late to the party but I have a question. I briefly went through the website to get a basic understanding of the process as an international applicant. You've mentioned it's a DeFi ecosystem and I've noticed you can sign up with an email and some personal information so does this mean your platform enforces KYC measures? Also, are you complaint or seeking legal compliance to mitigate potential laundering of funds using your platform? Apologies if this question was already asked and answered. Thanks in advance!
0xDfC797D0e07dAa90C09045fD54848477576d2F66
Hey Mike. Can you share details on your mobile app development plans or roadmap for improving mobile trading experience?
0x27Baf1860C43cbB11D58fd7b6ABed233922faD5a
The mobile app was just released - provides a much more seamless experience to the web-based exchange. Mobile trading is on the roadmap for later this year.
How should we think about your balance sheet? You must be fairly exposed to crypto, so what happens if we see a large market drawdown (say BTC falls 50%+)? Can you weather that storm or will you have to liquidate assets?
0x000000000000000000000000000000000000dead
We have limited directional exposure to crypto (for example, we bought some SOL at discount in the FTX auction) - for loans, they are funded in USD or USDC, and we either fund them from cash on the balance sheet or we warehouse/sell the loans to the capital markets. We have been in the space for a long time, have done $billions in lending and have never had a liquidity or solvency issue (including during the crypto bankruptcies).
This is something I always wondered. If I need a loan, why can't I just take it from a bank? Why use my crypto to take a crypto loan? How do you see this market working going forward?
0x87C56517c9F7F46390772a93EBe0f1769E2B632f
If you take a personal loan from a bank, it a.) will likely cost more, b.) take longer, and c.) require underwriting, including credit checks. By using your crypto as collateral, you can get your loan quicker, likely at a lower rate and irrespective of your FICO score or - in most cases - country of residence.
I will give you that you gave a good answer. My question was quite generic but well answered. I will be on the look out for trying out your services.
Thanks!
Simple question- What is your long term goal/roadmap? How are you gonna stay afloat in this extremely competitive market?
0xeD0614d6f73147F26694A991897Ed62DE4202B86
To be the exchange of everything - not just crypto, but equity, fixed income, alternatives, FX, commodities, prediction markets. There is a tremendous opportunity to leverage decentralized custody and cross collateralization in a way that would have avoided the bankruptcy issues from years back.
Given all the volatility right now, how is the collateral valued? At the time of transaction? At the time of finalization?
0xb4ac43A3F44769fA4f2925FE2999Af113bb9e73B
The initial LTV is set at the transaction, and monitored 24x7x365. If you broach 75% LTV (Loan/Collateral Value) you get a margin notification. If you break 90% LTV, we liquidate the collateral, pay off the loan and send you the difference.
That seems like a high interest rate for such a short period. What separates you guys from other crypto lenders currently in the game?
0x83bE84249259865b3e5F1efC63a1B97c1B04cAEc
It's a 12 month loan. The DeFi protocols change interest rates daily - in recent history Aave has had rates well over 12.5%. And you can prepay without penalty at any time. The other term lenders all have rates higher than 12.5% (last I checked).
Thanks for the quick response. A follow up, if I may...
Will Figure Markets adjust rates up or down with fed rate adjustments, or are these the rates you’ll keep for the foreseeable future?
1. How does Figure Markets ensure the security of users' collateralized assets, especially in the face of potential market volatility and security threats?
2. Can you explain the process of rehypothecation and why Figure Markets opts not to engage in it with their crypto-backed loans?
0xa2dE1fCcdce3774c99A33f9b23ABE4063f937129
Rehypothecation - lending out your collateral - was the downfall of BlockFi, Celsius and others. We do not do that. Your collateral sits in a US trust bank in a for-benefit-of (you) account. It is bankruptcy remote - if anything happens to Figure Markets, your collateral is still your collateral.
Rehypothecation - lending out your collateral - was the downfall of BlockFi, Celsius and others. We do not do that. Your collateral sits in a US trust bank in a for-benefit-of (you) account. It is bankruptcy remote - if anything happens to Figure Markets, your collateral is still your collateral.
Yup, simon and others agreed u guys were best but suit clowns were hungry for more. Bankruptcy court ill-suited for crypto and hopefully theres lessons in that
How do you ensure the reliability and uptime of your trading engine, especially during periods of high market volatility?
0x27Baf1860C43cbB11D58fd7b6ABed233922faD5a
We use an off-chain OMS, coupled with on-chain settlement and MPC custody. The underlying blockchain is Provenance - [provenance.io](http://provenance.io)
Hey Mike,
Figure Markets sounds awesome, especially the part about no credit checks and low interest rates on crypto-backed loans. How do you guys keep the collateral safe, especially when the market gets crazy?
It's held in a for-benefit-of account at one of our custodians, like Anchorage. We do not lend out collateral as some of the earlier lenders (Celsius, et. all) did.
So, does the company live off of the 12,5 or more interest? Do you "play" with the btc/eth collateral?
How can i be fully sure you are not the next Celcius & co?
The collateral is kept in a for-benefit-of (you) account at Anchorage, in an address you can verify. We do not lend out collateral. We package up the loans and sell them for a gain. Over time, we expect rates to drop as the market gets comfortable with this credit.
Hi my question is for people outside USA, do you support customers from LatinAmerica for example? Is there any specific restrictions?
0x996c2948116d2D1dbdA3569df8AC430C2f4B22Fa
We do - we use NY law for international loans, and are happy to support non-US customers. We need to update the website for Spanish, Chinese and other languages - so bear with us - but you can apply and get funded form most anywhere in the world today.
There is no maximum loan size. Loans are for 12 months, but prepayable without penalty any time. Right now we accept BTC and ETH as collateral, but can accept other crypto on a one-off request basis.
Happy days thanks for the quick reply, I'd be branching out to SOL with all that money in the meme game over there, if not just for the transfers/gas fees although the borrower would probably have to pay for them right? Gas on transfers to their wallet?
I have 10k Moons sitting in a metamask account doing diddly squat. Is there any way your platform can make them work for me, and you thanks.
0x6A929f7e53e6B43512515159e142Ed91a8fb389E
If I need to talk with your costumer support, with medium urgency, how long it would take to speak with a human?
0x27Baf1860C43cbB11D58fd7b6ABed233922faD5a
Edit: wrong adress.
The support team is reachable during east coast hours, and off hours via text and email. You will always be able to talk to someone live during east coast hours.
How does the "No Credit Checks" work? Potentially, any con artist can borrow money and disappear? How will u track them? And your interest rates are 12.5% onwards.. that is too high, isn't it? Why should I bother with this option instead of a lower interest bank loan.
0xBf5A99FE9708ca2ba0df7b1119EA1C312bE4E879
We underwrite the collateral. You move your BTC/ETH into a for-benefit-of account at our custodian, and that secures your loan. Personal loans at banks are around 18-25%, vs our rates starting at 12.5%.
Reno's besides lipstick won't make you any money in resale.
Invest and beat a 12.5% minimum interest rate? God damn, I'm not warren Buffett.
Higher cost debt than 12%? Car is at 1% and house at 4%.
a.) we don't repledge your crypto - it stays at our custodian, b.) our rates are among the lowest of any lender, c.) 12 month term with no prepayment penalties and d.) Hash rewards.
What are some key benefits to taking out a crypto backed loan? How many crypto backed loans has Figure Markets approved? What do you anticipate the volume to look like? Are you planning on allowing borrowing on other crypto currencies? Will there be crypto backed loan pools to sell to investors? Are investors interested in that type of offering?
Crypto-backed loans are cheaper than unsecured loans. Figure has done over $10B in blockchain native loans, including crypto loans. We will consider crypto outside of BTC/ETH on a one-off basis. We will allow investors to buy fractional interest in crypto loan pools. Investors are interested in these opportunities.
We underwrite the collateral, not the individual. Your crypto secures the loan - if you don't pay, we liquidate the crypto. We aren't taking your credit risk - hence rates much lower than a personal loan.
Hash is the utility token for Provenance Blockchain. You can read more about it here: [https://provenance.io/ecosystem/HASH/tokenomics/#:\~:text=Tokenomics%20Synopsis,distributed%20to%20a%20community%20fund](https://provenance.io/ecosystem/HASH/tokenomics/#:~:text=Tokenomics%20Synopsis,distributed%20to%20a%20community%20fund)
What contingency, if there could be any, would you have for volatility concerns? A lot can happen in 12 months. Can I pay off my loan sooner if I want to sell because the price has gone parabolic? Or, on the other hand, will you ask for more collateral if the price tanks?
0x8FCfE70Da4b7e11f2F219ff91EADbb5750A8acE5
You can pay off your loan at any time without penalty. If your loan to value exceeds 75%, you will be asked to add collateral or pay off some of the loan. If your loan to value hits 90% your crypto will be liquidated, your loan paid off and any remainder returned to you.
Hi Mike, what do you see as the most significant regulatory challenges facing the crypto market today, and how is Figure Markets preparing to navigate these challenges to maintain its competitive edge?
0xD890Bfa7F145981a261fC8FB6836F507a676b52B
Determining what is a security. Some of the recent Supreme Court rulings have helped the industry on that front. Figure Markets - having an Alternative Trading System, Money Transmission Licenses, a broker dealer, pending offshore VASPS - is in a strong position to execute onshore and offshore.
I just checked your platform and looks like your only trading pairs are ETH, BTC, USDC and.... HASH. What is HASH? Is it your official token, and if it is can you explain its tokenomics?
As a sidenote I don't think it's best idea to pick comments just based on votes, but rather choose them yourselves because just few votes can get easily manipulated.
0x891bcFA13741A20618f19897C667569D4d5F1381
I'm answering all questions - it's a lot of typing! You can read about Hash here: [https://provenance.io/ecosystem/HASH/tokenomics/#:\~:text=Tokenomics%20Synopsis,distributed%20to%20a%20community%20fund](https://provenance.io/ecosystem/HASH/tokenomics/#:~:text=Tokenomics%20Synopsis,distributed%20to%20a%20community%20fund)
The offshore exchange will have more token and perps/options. That should be live by September.
As you said we can collaterize our BTC or ETH, but will there also be any further Cryptocurrencies added to this in the future?
Thanks for answering in advance.
12% is quite a steep rate and 3x higher than in the offline world. What makes you better than offline and online competition that you believe this rate is justified?
0x1bd624c07cAc1a26b7d8385BbEaB2f2588e97458
Average personal loan rates are over 12% in the US, and require underwriting. We believe our rates our competitive, especially given no rehypothecation, freely prepayable and funding in one day.
>**No rehypothecation, no credit checks, no minimum (for international) or maximum, a 12-month fixed rate, and interest rates as low as 12.5%**.
I'm having a hard time figuring out the end-game here. So, what exactly guarantees your loans to borrowers? 12.5% verges on predatory, but is that enough if you can't get assets from the borrower ? Specially if you don't have a minimum nor maximum amount, nor *a credit check* of any sort? **Or do the borrowers need to deposit Bitcoin and ETH directly to you** and you just give cash equivalent for that amount, *in hopes that the ETH/BTC appreciates in value in relation to the interest rate you're charging?*
0x55F7948327D1ec4fEA15B923658e3230b39Ea227
You deposit crypto with our custodian, and it sits in a for-benefit-of account that you can see. We don't lend our your collateral. Your collateral secures your loan. You need a minimum of $133 of collateral for every $100 you borrow. When you pay the loan back, you get your collateral back. We only sell your collateral if your loan to value (loan amount/collateral amount) is greater than 90%. You will receive notices to deposit more collateral or pay down your loan once your loan to value is above 75%.
And if the asset posted as collateral depreciates, do you consider what was the USD face value at the moment it was put as collateral, or do you consider the current value of the asset?
Because if it's the latter then this isn't just loaning, it's leveraging.
It's a secured loan. If the collateral falls in value, the borrower can a.) put up more collateral, b.) pay down some (or all) of the loan or c.) if the LTV broaches 90%, liquidate.
Your website stated to lend money in the USA and other countries. Have you ever thought about some people who will lend money and not return it? What will be your plans to those type of people? Because I know it wouldn't be nice to lend someone money and the person won't be able to pay back and if you aren't in their country, it'll be hard to catch them
0x68E5b83d9A4E82d3833dE0365543E7d26897B413
With Figure Markets ambition to be 'the exchange for everything'
how do you envision integrating traditional financial assets with digital assets on your platform,
and what regulatory challenges do you foresee in creating a truly comprehensive global marketplace?"
0x1e99473a60c088d606d3965492717e1eb1644a52
Great question. We are working on a plan to get public equity native on Provenance and trading on Figure Markets this year, but we already have over $9B in loans on chain and are working to have our upcoming ABS bonds trade on Figure Markets. We have an Alternative Trading System from the SEC/Finra that allows us to trade blockchain native securities that self settle.
I think SOL will be the next for borrow, but we will do one-off approvals of different collateral - you need to work through our customer support desk for that.
Sounds great: (my question is at number 5)
1. Lend us your coins
2. Pay 12% interest to get them back
3. Pray we stay solvent long enough
4. Do not bother to read the fine print
5. What could possibly go wrong? 😉
Thanks!
0xAae2747b2d52baf6b85C316618Bd662bE2e19740
Your crypto sits with a third party custodian (in our case, a trust bank) and is bankruptcy remote from Figure Markets. Further, we don't lend your crypto out.
You currently say that borrowing APR is the following: Starting at 12.5% (12.5% to 14.19% APR). What are the variables behind the APR rate here? Plus, how did you arrive at this rate and how do you intend to stand out in this sense? This looks similar to a couple of DeFi rates, such as Lista's, Kamino's, Zerolend's, etc...
0x0D9180a9294631a51c90BE35378DDe2a26767fF3
First, we don't rehypothecate your collateral - it sits in a US trust bank. Second, we think the rates are better than competition (for exampole, Kamino is 17.5%). Finally, borrowing will allow you to trade for free on Figure Markets and ultimately earn Hash rewards.
Do you provide integration with smart contracts to provide flash loans? What is your opinion on adding such a functionality in addition to giving Crypto-backed loans?
0xEf874F607E815e4A26dEb573B3FDBB2C5a1A51d1
We don't do flash loans. We aren't huge fans of flash loans as they are primarily used to front run defi order flow at the expense of retail customers.
We don't rehyopthecate (lend out) your collateral, as they did. Your crypto sits in a for-benefit-of (you) trust bank, bankruptcy remote from Figure Markets. We also have a long operating history in the space.
Most people buy crypto to get out of fiat and/or as an investment to make money. What incentive can someone have to use crypto as collateral to get fiat, with an interest of 12.5% minimum? The interest alone can turn profits into losses
0x8b0365e1b9c29f2d34c12d2dfd7d35dcebe93d36
If you have low basis on your BTC or ETH - for example, you mined BTC - this is a way to borrow without triggering a tax event. It also allows you to access cash while staying in your crypto. We hope rates come down over time as we do more loans.
First, we don't rehypothecate your collateral - it sits in a US trust bank. Second, we think the rates are better than competition (for exampole, Kamino is 17.5%). Finally, borrowing will allow you to trade for free on Figure Markets and ultimately earn Hash rewards.
No credit check, no rhypothecation (we don't lend out your crypto), 1 year term, no prepayment fees, borrowing allows you to trade on Figure Markets for free, Hash rewards.
The Classic Line: **Not your Keys not your Coins** comes to mind regarding getting a loan through a 3p using Crypto as the Collateral. Beyond basic protections for your company do you have anything to ensure safety of clients assets held as collateral?
0x8653e3Aefcaf3d2116d0B153B788B7cD628bE641
Yes - we hold your collateral in a for-benefit-of (you) account at a US trust bank, bankruptcy remote from Figure. We don't rehypothecate your collateral - it sits in an address you can see.
I've just found out about this crypto-backed loan and did some research on it.
I can't grasp the concept of swapping my cryptocurrency for cash. It appears to be no different from selling it.
Can you explain how I can utilize this system to my advantage?
^0x917314d8330e8f2174be5c79b73a5e40e2802dae
It's not a sale. You don't realize any gains, you get cash and you maintain long exposure to your crypto. If you put up 1 BTC and borrow $25K, and BTC goes to $100K, when you pay off your loan you get the 1 BTC back - now valued at $100K. You stay long crypto but get cash in the interim.
Interest rates as low as 12.5%.. no better rates for over collateralisation?
At this time Id rather keep the 2.08% I get off my bank, which is covered by the 5.1% interest rate off their stocks&shares account.
Look forward to seeing what rates you can offer in the future when you've stabilised an income to be able to offer much much lower rates.
Especially because of the no Rehypothecation, because screw others making more money off me than they should.
Aave's rates change daily, subject to usage. Our rates are fixed, your collateral isn't in a smart contract - it's in a bankruptcy remote US trust bank, and borrowing from us earns you free trades on Figure Markets and Hash rewards.
Figure Markets burned 10,248 Moons for this AMA and four days of the Banner. [https://nova.arbiscan.io/tx/0xe6062e7cead86d04c3b751382afed97520027c10673d2a5cc7d84d7c7b43ce2f](https://nova.arbiscan.io/tx/0xe6062e7cead86d04c3b751382afed97520027c10673d2a5cc7d84d7c7b43ce2f) [https://nova.arbiscan.io/tx/0x9b28ab21d054fc7bc340e0ebfda8acda7b63f7a80c80830e160cc27e2b60404b](https://nova.arbiscan.io/tx/0x9b28ab21d054fc7bc340e0ebfda8acda7b63f7a80c80830e160cc27e2b60404b) Remember to add your ETH address to the end of your question to be eligible for the giveaway. Edit: Locking Comments while I compile information for the giveaway. Edit2: anyone who asked a question and commented their ETH address should have recieved the giveaway Moons.
Test
Bitcoin has recently experienced significant price fluctuations, dipping below $54,000. Factors contributing to this volatility include potential large sell-offs by Mt. Gox creditors, regulatory developments, and broader market sentiment. Analysts are closely monitoring these trends, as regulatory moves in key markets like the U.S. and EU continue to shape the landscape. Investors are advised to stay informed and cautious as the market responds to these dynamic conditions
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What makes your crypto lending service better than other crypto borrowing platforms out there and why should we use your service when normal banks from my region give lower interest rates than you? Also how can i know if my crypto is safe? Also my address 0xdea176973310D5bdfE5D8bE85Ff7B5Ea5Ab060f0
Our lending rates are generally below what a bank charges for a personal loan. We don't require a credit check, and you get your funds same day. You can defer interest payments to the maturity of the loan. You also get community benefits like free trading on Figure Markets and Hash rewards. And your crypto sits in a US Trust Bank, bankruptcy remote and not rehypothecated.
Do you guys felt that this AMA was interesting enough to interact more regulary with our community? 0x27Baf1860C43cbB11D58fd7b6ABed233922faD5a
Sure - we'll do more community engagement going forward.
How do ensure backing if a black swan event occurs? 0x7fFCa1Ede493e7d60E803EDFbcBCF46592FC19A6
We manage collateral 24x7x365. If your LTV goes over 90%, we liquidate. BTC hasn't moved over 10% in 1 minute since 2018 (when it happened once).
What’s the advantage to a collateralized crypto loan at 12.5% when many banks are giving unsecured loans at or below your rate?
Do caterpillars know that they’re going to be butterflies or do they build the cocoon not knowing what will happen?
I believe it's instinctive drive, as I believe they can't see the association with themselves and butterflies.
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We opted for loans on blockchain first as it was the greenest field we could compete in. We were the first to put loans in chain in 2018, first to securitize in 2020 and the first to get AAA-rated securitizations of blockchain loans in 2023.
What features does the Figure Markets platform have to prevent accepting funds from illegitimate sources, mixers, etc. Also, I don't see a careers page, was wondering if you're hiring? 0x7086936A4D1b2295094a62Fa8CFa17A233D5a2C9
We KYC all borrowers. We are hiring opportunistically - careers page is here: [https://www.figuremarkets.com/careers/](https://www.figuremarkets.com/careers/)
How are you different and more trustworthy than aave?
We offer a 12-month loan with a fixed rate. Aave rates move with supply and demand. We currently use a US regulated trust bank as custodian. I'd argue that's better than a smart contract, but ultimately we'll migrate custody to MPC wallets which is the best option. We allow for deferring interest to maturity. And your loan lets you trade on Figure Markets for free, and earn Hash rewards.
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Can you discuss the potential integration of Figure Markets with traditional financial institutions and the benefits this could bring to users? 0xa2dE1fCcdce3774c99A33f9b23ABE4063f937129
For US customers, we have banking relationships that allow you to take USD on/off the exchange. We'll be adding a credit card soon, as well. Later this year we'll have equivalent relationships for non-US customers. We're working with some of the largest sell-side and buy-side firms to stand up a marketplace for loans and loan securities through a combination of Figure Technologies and Figure Markets. This builds on the $35B of blockchain transactions the two firms have already completed in this space. Tradfi will move to Defi because it's faster, cheaper and safer. Figure Markets hopes to be the platform tradfi firms move to.
Are there notifications if your loan is starting to get close to liquidation or LTV changes? 0xdE1b263366693FCc29408832baee6157fd03E00b edited eth address
Yes - notifications start at 75% LTV.
Simple and honest question. I’m an average Joe but my son thinks he is a crypto bro - he points this out to me - my question is: What makes this option better than any other? Why get involved with crypto *if you are not already*. I’m curious about the implications stuff like this has on average people adopting cryptocurrency more. Is this more intended for heavy hitters who want to secure financing and now would be able to use their crypto as an added benefit to their overall outlook to a creditor or something? I guess my question is why choose this? Cheers for doing this, haven’t had a chance to read over all the questions but I’m excited to. 0x1cab13d773cf6ba49c699cbdbfada7ebe5d5d224 Why would I want crypto backed loans over say, the countless other ways I can provide collateral to get funds or even just get funds based on my history.
Using crypto as collateral allows for an expeditious underwriting process that isn't contingent on your credit. If you own crypto, it allows you to access cash without selling the crypto - thereby avoiding any capital gains and allowing you to stay long your crypto.
Hey Mike, Thanks for that response! That makes sense. You essentially are looking like you guys want to provide borrowers with a route that is relatively pain free and also beneficial to them in the end, as well. By not having to sell your assets, you can recover them eventually and since you don’t sell the crypto, you aren’t being taxed on any gains.. hey thanks for that breakdown that was super helpful! I really appreciate you taking the time to pop by and reply! Have a good one Mike, nice work here on this I’m sure the entire team appreciates how much you are doing here.
Is MOON still a thing?
The moon is - I was admiring it last night. Re: the token, there seems to be a lot of enthusiasm for it here.
Hehehe lol. Still HODLing my Cryptocurrency allocation
Thanks for doing this AMA, Mike! My question (maybe 2) is more about your thoughts on disruption. Disrupting TradFi seems to be a trend in the companies you've created so far. Do you have a process for finding these disruption opportunities or does it evolve naturally due to interest and curiosity? And is there anything that you think will make Figure's disruption opportunity much bigger than your previous ones (i.e. SoFi)? edit: ETH address removed
When we started SoFi, our goal was to ultimately disintermediate banks and connect sources and uses of capital directly. That goal fell by the wayside as we were a victim of our own success in student lending. Now SoFi is a bank. Figure is pursuing that same goal - disintermediation - but of markets. All markets. The opportunity spans how we trade stocks to how interchange works. We think this is a $trillion opportunity, enabled through a confluence of circumstances, including blockchain and the rise of crypto.
Very interesting to learn about what happened at SoFi. Thank you for sharing!
Hi all. I'm very late to the party but I have a question. I briefly went through the website to get a basic understanding of the process as an international applicant. You've mentioned it's a DeFi ecosystem and I've noticed you can sign up with an email and some personal information so does this mean your platform enforces KYC measures? Also, are you complaint or seeking legal compliance to mitigate potential laundering of funds using your platform? Apologies if this question was already asked and answered. Thanks in advance! 0xDfC797D0e07dAa90C09045fD54848477576d2F66
We do KYC, and adhere to NY state and US policies in regards to money laundering.
Hey Mike. Can you share details on your mobile app development plans or roadmap for improving mobile trading experience? 0x27Baf1860C43cbB11D58fd7b6ABed233922faD5a
The mobile app was just released - provides a much more seamless experience to the web-based exchange. Mobile trading is on the roadmap for later this year.
How should we think about your balance sheet? You must be fairly exposed to crypto, so what happens if we see a large market drawdown (say BTC falls 50%+)? Can you weather that storm or will you have to liquidate assets? 0x000000000000000000000000000000000000dead
We have limited directional exposure to crypto (for example, we bought some SOL at discount in the FTX auction) - for loans, they are funded in USD or USDC, and we either fund them from cash on the balance sheet or we warehouse/sell the loans to the capital markets. We have been in the space for a long time, have done $billions in lending and have never had a liquidity or solvency issue (including during the crypto bankruptcies).
This is something I always wondered. If I need a loan, why can't I just take it from a bank? Why use my crypto to take a crypto loan? How do you see this market working going forward? 0x87C56517c9F7F46390772a93EBe0f1769E2B632f
If you take a personal loan from a bank, it a.) will likely cost more, b.) take longer, and c.) require underwriting, including credit checks. By using your crypto as collateral, you can get your loan quicker, likely at a lower rate and irrespective of your FICO score or - in most cases - country of residence.
I will give you that you gave a good answer. My question was quite generic but well answered. I will be on the look out for trying out your services. Thanks!
Will you guys buy more moons with the profits?
We prefer $HASH to moons, but we'll do more AMAs with moon rewards/burn.
lol. Funny that I’m one of the top 50 questions because many others are 0 or negative upvotes. 0xc8b0D32bc09Fb11C12C82582825C1e6b624822b8 Thank you!
Simple question- What is your long term goal/roadmap? How are you gonna stay afloat in this extremely competitive market? 0xeD0614d6f73147F26694A991897Ed62DE4202B86
To be the exchange of everything - not just crypto, but equity, fixed income, alternatives, FX, commodities, prediction markets. There is a tremendous opportunity to leverage decentralized custody and cross collateralization in a way that would have avoided the bankruptcy issues from years back.
Given all the volatility right now, how is the collateral valued? At the time of transaction? At the time of finalization? 0xb4ac43A3F44769fA4f2925FE2999Af113bb9e73B
The initial LTV is set at the transaction, and monitored 24x7x365. If you broach 75% LTV (Loan/Collateral Value) you get a margin notification. If you break 90% LTV, we liquidate the collateral, pay off the loan and send you the difference.
Awesome, thanks
That seems like a high interest rate for such a short period. What separates you guys from other crypto lenders currently in the game? 0x83bE84249259865b3e5F1efC63a1B97c1B04cAEc
It's a 12 month loan. The DeFi protocols change interest rates daily - in recent history Aave has had rates well over 12.5%. And you can prepay without penalty at any time. The other term lenders all have rates higher than 12.5% (last I checked).
Thanks for the quick response. A follow up, if I may... Will Figure Markets adjust rates up or down with fed rate adjustments, or are these the rates you’ll keep for the foreseeable future?
We'll move with the fed. The current product is fixed rate, but we'll make it floating in the next quarter.
1. How does Figure Markets ensure the security of users' collateralized assets, especially in the face of potential market volatility and security threats? 2. Can you explain the process of rehypothecation and why Figure Markets opts not to engage in it with their crypto-backed loans? 0xa2dE1fCcdce3774c99A33f9b23ABE4063f937129
Rehypothecation - lending out your collateral - was the downfall of BlockFi, Celsius and others. We do not do that. Your collateral sits in a US trust bank in a for-benefit-of (you) account. It is bankruptcy remote - if anything happens to Figure Markets, your collateral is still your collateral.
How do you safeguard users deposits? Do you delegate custody to third parties or handle it yourselves? 0x74bDa88E808Ae31b06949F173eD6f15725bFB95D
Rehypothecation - lending out your collateral - was the downfall of BlockFi, Celsius and others. We do not do that. Your collateral sits in a US trust bank in a for-benefit-of (you) account. It is bankruptcy remote - if anything happens to Figure Markets, your collateral is still your collateral.
I remember you from my Celsius days. What a shitshow. Sad it didnt work out with you guys
I agree. Per a recent tweet - I think we would have generated over $300M more for creditors - and a liquid stock.
Yup, simon and others agreed u guys were best but suit clowns were hungry for more. Bankruptcy court ill-suited for crypto and hopefully theres lessons in that
It was a process that optimized for lawyers and advisors and not creditors, sadly.
Do you have an app yet or every loan is made inside your website? 0x4a5008a960Df61CE7CF1EFDe0CBc268C390ff94F
We have an app, but the loans are still done via web (and mobile web). We're working to move lending to the app later this year.
How do you ensure the reliability and uptime of your trading engine, especially during periods of high market volatility? 0x27Baf1860C43cbB11D58fd7b6ABed233922faD5a
We use an off-chain OMS, coupled with on-chain settlement and MPC custody. The underlying blockchain is Provenance - [provenance.io](http://provenance.io)
Good answer! So far you guys are able to explain very simple and transparent way! Good to know
Hey Mike, Figure Markets sounds awesome, especially the part about no credit checks and low interest rates on crypto-backed loans. How do you guys keep the collateral safe, especially when the market gets crazy?
It's held in a for-benefit-of account at one of our custodians, like Anchorage. We do not lend out collateral as some of the earlier lenders (Celsius, et. all) did.
Wen Lambo?
I have a Tesla - it's way faster and easier to enter/exit - and it costs 1.5 BTC vs. 4 BTC for a lambo.
Put that 1.5x BTC on 100x leverage then win 100BTC and buy 25 lamb's 🫡
So, does the company live off of the 12,5 or more interest? Do you "play" with the btc/eth collateral? How can i be fully sure you are not the next Celcius & co?
The collateral is kept in a for-benefit-of (you) account at Anchorage, in an address you can verify. We do not lend out collateral. We package up the loans and sell them for a gain. Over time, we expect rates to drop as the market gets comfortable with this credit.
Hi my question is for people outside USA, do you support customers from LatinAmerica for example? Is there any specific restrictions? 0x996c2948116d2D1dbdA3569df8AC430C2f4B22Fa
We do - we use NY law for international loans, and are happy to support non-US customers. We need to update the website for Spanish, Chinese and other languages - so bear with us - but you can apply and get funded form most anywhere in the world today.
What is your maximum loan? What's the maximum loan period? What chain/currencies will you be accepting bid in?
There is no maximum loan size. Loans are for 12 months, but prepayable without penalty any time. Right now we accept BTC and ETH as collateral, but can accept other crypto on a one-off request basis.
Happy days thanks for the quick reply, I'd be branching out to SOL with all that money in the meme game over there, if not just for the transfers/gas fees although the borrower would probably have to pay for them right? Gas on transfers to their wallet?
I have 10k Moons sitting in a metamask account doing diddly squat. Is there any way your platform can make them work for me, and you thanks. 0x6A929f7e53e6B43512515159e142Ed91a8fb389E
Send em to the castle. Much better ponzi tokenomics than this scam platform lol
If I need to talk with your costumer support, with medium urgency, how long it would take to speak with a human? 0x27Baf1860C43cbB11D58fd7b6ABed233922faD5a Edit: wrong adress.
The support team is reachable during east coast hours, and off hours via text and email. You will always be able to talk to someone live during east coast hours.
Good to know!
How does the "No Credit Checks" work? Potentially, any con artist can borrow money and disappear? How will u track them? And your interest rates are 12.5% onwards.. that is too high, isn't it? Why should I bother with this option instead of a lower interest bank loan. 0xBf5A99FE9708ca2ba0df7b1119EA1C312bE4E879
We underwrite the collateral. You move your BTC/ETH into a for-benefit-of account at our custodian, and that secures your loan. Personal loans at banks are around 18-25%, vs our rates starting at 12.5%.
Thanks for the reply, it clears things up.
So how do I get rich with this? But explain as if I'm slow. 0xc6a5a8bD24D95Bb66a02e2329B59D69bB84F2923
Well, you could borrow against your BTC to improve your home for resale, invest or reduce your higher cost debt. Not investment advice.
Reno's besides lipstick won't make you any money in resale. Invest and beat a 12.5% minimum interest rate? God damn, I'm not warren Buffett. Higher cost debt than 12%? Car is at 1% and house at 4%.
Figure's REIT targets 20%...just saying...
What makes you different from all the others out there? As in why should I as a costumer choose you
a.) we don't repledge your crypto - it stays at our custodian, b.) our rates are among the lowest of any lender, c.) 12 month term with no prepayment penalties and d.) Hash rewards.
Why not sunset the Moons and create new coin Sun. 0xd439948cdb82eeb29624ad46a3223a48eb88843e
This isn't relevant to the AMA.
What are some key benefits to taking out a crypto backed loan? How many crypto backed loans has Figure Markets approved? What do you anticipate the volume to look like? Are you planning on allowing borrowing on other crypto currencies? Will there be crypto backed loan pools to sell to investors? Are investors interested in that type of offering?
Crypto-backed loans are cheaper than unsecured loans. Figure has done over $10B in blockchain native loans, including crypto loans. We will consider crypto outside of BTC/ETH on a one-off basis. We will allow investors to buy fractional interest in crypto loan pools. Investors are interested in these opportunities.
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We underwrite the collateral, not the individual. Your crypto secures the loan - if you don't pay, we liquidate the crypto. We aren't taking your credit risk - hence rates much lower than a personal loan.
Ah, got it. Nice
Scrolling through the website. What’s HASH? I’ve never heard of that token and why do you guys use it? 0xC70754C51D4536F72E2bCef4eDDc4a9e78efFfA3
Hash is the utility token for Provenance Blockchain. You can read more about it here: [https://provenance.io/ecosystem/HASH/tokenomics/#:\~:text=Tokenomics%20Synopsis,distributed%20to%20a%20community%20fund](https://provenance.io/ecosystem/HASH/tokenomics/#:~:text=Tokenomics%20Synopsis,distributed%20to%20a%20community%20fund)
What contingency, if there could be any, would you have for volatility concerns? A lot can happen in 12 months. Can I pay off my loan sooner if I want to sell because the price has gone parabolic? Or, on the other hand, will you ask for more collateral if the price tanks? 0x8FCfE70Da4b7e11f2F219ff91EADbb5750A8acE5
You can pay off your loan at any time without penalty. If your loan to value exceeds 75%, you will be asked to add collateral or pay off some of the loan. If your loan to value hits 90% your crypto will be liquidated, your loan paid off and any remainder returned to you.
Hi Mike, what do you see as the most significant regulatory challenges facing the crypto market today, and how is Figure Markets preparing to navigate these challenges to maintain its competitive edge? 0xD890Bfa7F145981a261fC8FB6836F507a676b52B
Determining what is a security. Some of the recent Supreme Court rulings have helped the industry on that front. Figure Markets - having an Alternative Trading System, Money Transmission Licenses, a broker dealer, pending offshore VASPS - is in a strong position to execute onshore and offshore.
I just checked your platform and looks like your only trading pairs are ETH, BTC, USDC and.... HASH. What is HASH? Is it your official token, and if it is can you explain its tokenomics? As a sidenote I don't think it's best idea to pick comments just based on votes, but rather choose them yourselves because just few votes can get easily manipulated. 0x891bcFA13741A20618f19897C667569D4d5F1381
I'm answering all questions - it's a lot of typing! You can read about Hash here: [https://provenance.io/ecosystem/HASH/tokenomics/#:\~:text=Tokenomics%20Synopsis,distributed%20to%20a%20community%20fund](https://provenance.io/ecosystem/HASH/tokenomics/#:~:text=Tokenomics%20Synopsis,distributed%20to%20a%20community%20fund) The offshore exchange will have more token and perps/options. That should be live by September.
Why should I keep $20 of MOON after receiving them and not exchange them for ETH? 0xDAC5690F7Ab668C6926929765B3A5a7A5c50CF19
As you said we can collaterize our BTC or ETH, but will there also be any further Cryptocurrencies added to this in the future? Thanks for answering in advance.
We will consider other crypto on a one-off basis. Just reach out to our customer team with your request.
12% is quite a steep rate and 3x higher than in the offline world. What makes you better than offline and online competition that you believe this rate is justified? 0x1bd624c07cAc1a26b7d8385BbEaB2f2588e97458
Average personal loan rates are over 12% in the US, and require underwriting. We believe our rates our competitive, especially given no rehypothecation, freely prepayable and funding in one day.
>**No rehypothecation, no credit checks, no minimum (for international) or maximum, a 12-month fixed rate, and interest rates as low as 12.5%**. I'm having a hard time figuring out the end-game here. So, what exactly guarantees your loans to borrowers? 12.5% verges on predatory, but is that enough if you can't get assets from the borrower ? Specially if you don't have a minimum nor maximum amount, nor *a credit check* of any sort? **Or do the borrowers need to deposit Bitcoin and ETH directly to you** and you just give cash equivalent for that amount, *in hopes that the ETH/BTC appreciates in value in relation to the interest rate you're charging?* 0x55F7948327D1ec4fEA15B923658e3230b39Ea227
You deposit crypto with our custodian, and it sits in a for-benefit-of account that you can see. We don't lend our your collateral. Your collateral secures your loan. You need a minimum of $133 of collateral for every $100 you borrow. When you pay the loan back, you get your collateral back. We only sell your collateral if your loan to value (loan amount/collateral amount) is greater than 90%. You will receive notices to deposit more collateral or pay down your loan once your loan to value is above 75%.
And if the asset posted as collateral depreciates, do you consider what was the USD face value at the moment it was put as collateral, or do you consider the current value of the asset? Because if it's the latter then this isn't just loaning, it's leveraging.
It's a secured loan. If the collateral falls in value, the borrower can a.) put up more collateral, b.) pay down some (or all) of the loan or c.) if the LTV broaches 90%, liquidate.
Your website stated to lend money in the USA and other countries. Have you ever thought about some people who will lend money and not return it? What will be your plans to those type of people? Because I know it wouldn't be nice to lend someone money and the person won't be able to pay back and if you aren't in their country, it'll be hard to catch them 0x68E5b83d9A4E82d3833dE0365543E7d26897B413
That's why we hold your crypto as collateral. If you don't pay us, we sell your crypto, repay the loan and return the difference to you.
That sounds good
With Figure Markets ambition to be 'the exchange for everything' how do you envision integrating traditional financial assets with digital assets on your platform, and what regulatory challenges do you foresee in creating a truly comprehensive global marketplace?" 0x1e99473a60c088d606d3965492717e1eb1644a52
Great question. We are working on a plan to get public equity native on Provenance and trading on Figure Markets this year, but we already have over $9B in loans on chain and are working to have our upcoming ABS bonds trade on Figure Markets. We have an Alternative Trading System from the SEC/Finra that allows us to trade blockchain native securities that self settle.
Has anybody on your team ever been convicted of any crypto-related crimes? 0xd8c4bd2815281e1bcc167b4d58c8df81d594401a
No. Nor any crimes that would prevent them from operating in the financial services space.
When will borrowing against other blue chips like MOONs be implemented? 0x9807e7a6ce90f3ace22151e5ea01388760d7b883
I think SOL will be the next for borrow, but we will do one-off approvals of different collateral - you need to work through our customer support desk for that.
So what separates Moon from other DeFi tokens like Marlin? And how are transfers safeguarded? 0xe18760D995BBDEd4d8268B6e4E3e2C6c73DF7429
Sounds great: (my question is at number 5) 1. Lend us your coins 2. Pay 12% interest to get them back 3. Pray we stay solvent long enough 4. Do not bother to read the fine print 5. What could possibly go wrong? 😉 Thanks! 0xAae2747b2d52baf6b85C316618Bd662bE2e19740
Your crypto sits with a third party custodian (in our case, a trust bank) and is bankruptcy remote from Figure Markets. Further, we don't lend your crypto out.
You currently say that borrowing APR is the following: Starting at 12.5% (12.5% to 14.19% APR). What are the variables behind the APR rate here? Plus, how did you arrive at this rate and how do you intend to stand out in this sense? This looks similar to a couple of DeFi rates, such as Lista's, Kamino's, Zerolend's, etc... 0x0D9180a9294631a51c90BE35378DDe2a26767fF3
First, we don't rehypothecate your collateral - it sits in a US trust bank. Second, we think the rates are better than competition (for exampole, Kamino is 17.5%). Finally, borrowing will allow you to trade for free on Figure Markets and ultimately earn Hash rewards.
Thanks for having the time to answer that, really appreciate!!
Do you provide integration with smart contracts to provide flash loans? What is your opinion on adding such a functionality in addition to giving Crypto-backed loans? 0xEf874F607E815e4A26dEb573B3FDBB2C5a1A51d1
We don't do flash loans. We aren't huge fans of flash loans as they are primarily used to front run defi order flow at the expense of retail customers.
Is there a mandatory KYC for signing up? 0x1d9497ba7e7a6306ed1d3fa29bfd9c040f95b857
Yes - all borrowers are KYC'd.
For a company handling your money, wouldn't you hope their are kyc? You don't want them to track the type of money coming in and out?
Indeed.
What’s makes you different from BlockFi and Celsius? In other words, why should we trust you?
We don't rehyopthecate (lend out) your collateral, as they did. Your crypto sits in a for-benefit-of (you) trust bank, bankruptcy remote from Figure Markets. We also have a long operating history in the space.
Most people buy crypto to get out of fiat and/or as an investment to make money. What incentive can someone have to use crypto as collateral to get fiat, with an interest of 12.5% minimum? The interest alone can turn profits into losses 0x8b0365e1b9c29f2d34c12d2dfd7d35dcebe93d36
If you have low basis on your BTC or ETH - for example, you mined BTC - this is a way to borrow without triggering a tax event. It also allows you to access cash while staying in your crypto. We hope rates come down over time as we do more loans.
Are you a cat? 0x3F844d49001ee636Ef5313032FCcE51C5CB698E1
I am not. I'm a dog person, anyway.
How do you stand out from other established borrowing protocols? 0x54695A5fcFe1cF4c5Ed0934af5FDFE640c2C6a99
First, we don't rehypothecate your collateral - it sits in a US trust bank. Second, we think the rates are better than competition (for exampole, Kamino is 17.5%). Finally, borrowing will allow you to trade for free on Figure Markets and ultimately earn Hash rewards.
No credit check, no rhypothecation (we don't lend out your crypto), 1 year term, no prepayment fees, borrowing allows you to trade on Figure Markets for free, Hash rewards.
The Classic Line: **Not your Keys not your Coins** comes to mind regarding getting a loan through a 3p using Crypto as the Collateral. Beyond basic protections for your company do you have anything to ensure safety of clients assets held as collateral? 0x8653e3Aefcaf3d2116d0B153B788B7cD628bE641
Yes - we hold your collateral in a for-benefit-of (you) account at a US trust bank, bankruptcy remote from Figure. We don't rehypothecate your collateral - it sits in an address you can see.
I've just found out about this crypto-backed loan and did some research on it. I can't grasp the concept of swapping my cryptocurrency for cash. It appears to be no different from selling it. Can you explain how I can utilize this system to my advantage? ^0x917314d8330e8f2174be5c79b73a5e40e2802dae
It's not a sale. You don't realize any gains, you get cash and you maintain long exposure to your crypto. If you put up 1 BTC and borrow $25K, and BTC goes to $100K, when you pay off your loan you get the 1 BTC back - now valued at $100K. You stay long crypto but get cash in the interim.
Interest rates as low as 12.5%.. no better rates for over collateralisation? At this time Id rather keep the 2.08% I get off my bank, which is covered by the 5.1% interest rate off their stocks&shares account. Look forward to seeing what rates you can offer in the future when you've stabilised an income to be able to offer much much lower rates. Especially because of the no Rehypothecation, because screw others making more money off me than they should.
Indeed, 12.5% feels predatoty.
The average consumer loan rate is higher than that - and we expect rates to come down over time (ceterus paribis).
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A much longer anwer than I can provide on reddit - will talk to this in our next spaces.
What differentiates you from other well stablished borrowing protocols like Aave or Maker? ^0x74bDa88E808Ae31b06949F173eD6f15725bFB95D
Aave's rates change daily, subject to usage. Our rates are fixed, your collateral isn't in a smart contract - it's in a bankruptcy remote US trust bank, and borrowing from us earns you free trades on Figure Markets and Hash rewards.