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Hi everyone. Here we are at day two at Solana Breakpoint Conference in Abu Dhabi and today we are joined by Mike Cagney, co-founder at Figure. Mike, how are you doing today? Thank you for joining us.
I'm doing great. I flew in last night, so I'm jetlagged. Doing fine other than that.
Fantastic. Yeah, that jet lag, you know, it takes some time, but glad you're doing okay. So, definitely Mike, I wanted to get your take on, you know, kind of what you expect to happen in the crypto markets in 2026 and perhaps beyond.
Yeah, look, I think a lot of interesting things and part of why I'm here at Breakpoint is some of the work we're doing bringing real world assets, yielding assets into the Solana ecosystem. And I think that push of getting more tangible real world assets into DeFi applications will be a big theme going into '26. And you know, we're uniquely situated. We're the largest real world asset originator on public blockchain. Today we're putting at least a billion dollars of loans a month on public blockchain. And we're going to try to get as much of that as we can into the DeFi ecosystem. And so the launch that we did with Hastra, which we'll talk about today as part of Breakpoint, partnering with Kamino and Raydium and others to get that to stand up. I think you're going to see more of that not just within the Solana ecosystem, but within the broader public blockchain ecosystem.
Right. And you know, I want to kind of talk about, you know, the success of your IPO and some others. You know, what does that kind of tell us about the crypto? You know, you guys had a very successful IPO. Some others like Circle have had their IPOs. What do these IPOs tell us about the crypto market?
I think the most important thing is the public market is ready for a blockchain story. And you know, if I go back two years ago, not only was the regulatory environment too difficult to go public, the SEC didn't like the concept of the public blockchain company, but the public market wasn't there either. And people didn't really understand what the opportunity set was. And you know, I remember when I first started going out with Goldman to do roadshow meetings with investors, Goldman would say, 'You got to tone down this DeFi stuff. People don't understand what you're talking about.' And then Circle went public and did so well they said you really need to play up the DeFi angle and everything that you're doing in terms of the IPO piece. And so you know, I think and one of the things that I spoke to a lot of investors about and I firmly believe this, just like we have a magnificent seven of web 2.0, I think we're going to have that same emergence in web 3.0. And I hope that Figure is one of those companies. I think you know, again given what we're doing in the real world asset space, given what we're doing bridging TradFi and DeFi, the amount of sell-side and buy-side firms we've brought into blockchain, you know, the first transactions they've done have been with us. I hope that we're going to be one of those companies but I think we are going to create this magnificent, I don't know if it's five or seven or eight companies or whatever the number is, but there'll be an emergence of a web 3 ecosystem and the public market I think is very aware of that and you know, I think it's great that they're leaning in and getting exposure.
Right. And I want to kind of stick with that. That's the success of the IPO because Figure is up significantly since that IPO and it's happening when the broader crypto market has been underperforming. Why have you guys found success within these current market dynamics?
I think there's a couple of dynamics to it. I think one, you know, Figure just is an exceptional operating business and because of the way that we use blockchain we've extracted so much cost out of traditional fintech 2.0 operations. You know, our third quarter we did 160 million in revenue but we did $90 million in income and those are numbers you don't often see as the first earnings report of a company going public. But I think more importantly, people are looking at what we're leaning in on the innovation side and certainly what we're doing with Hastra in terms of getting RWA exposure into the broader DeFi ecosystem is important. But a couple weeks ago, we announced that we're going to do effectively a second IPO. Now, this is just secondary. We're not raising any capital for Figure, but we're doing an IPO where our stock will be native on public blockchain. So, it won't be on DTCC. It won't trade on the NASDAQ. It'll trade, it'll be native on Provenance blockchain. We'll be able to bring it over to Solana in the same way that we've done with our loans. It'll trade on our alternative trading system, which is a self-custody, self-settle, self-clear alternative trading system. Functions just like a decentralized exchange. And it'll allow for the concept of wallet connect versus introducing broker. And so people are seeing what we're doing just pushing the boundaries. You know, we've already established that blockchain is hugely valuable in the credit ecosystem. I think we have the exact same value prop in the public equity ecosystem and I think our public equity offering will be the first of very many behind that that are going to take advantage of being on native blockchain.
And I want to kind of talk a little bit about DeFi and you know, kind of crypto lending because I want to know essentially how has that changed, how has DeFi and lending and borrowing in the crypto space changed since you know, the collapse of you know, these BlockFi's and Voyager's. What have you guys learned from that and you know, what are some lessons you're going to take forward.
Well, I think one of the key things that came out of Celsius and some of the others is self-custody is very important. And the issue is well, how do you self-custody and encumber collateral? Well, that's what multi-party computation wallets do, right? So, MPC wallets in my mind are one of the most important innovations we've had in the blockchain space in the last couple of years. And it effectively eliminates the need for a centralized custodian. And so, you know, self-custody is super important. Non-rehypothecation super important. I think what we're seeing more recently is and we saw this obviously with Terra Luna, but even more recently is the algorithmic constructs of yield don't tend to be stable. And what we're getting a lot of resonance on is, you know, if you look at a product like Ethena, for example, the yield there is coming from selling the forward, buying the spot, getting the carry. It's somewhat of a complicated process and it works in certain market environments and not in others. We're bringing US mortgages and it's a lot easier for people to get their arms around where that yield's coming from and the stability of that yield. And so I think what we're going to see again going back to a '26 trend is more yielding assets coming to chain accessing DeFi protocols from a liquidity standpoint.
Now, you know, speaking with all of this, I think stable coins, right, play a major role in this. So, I want to kind of ask you, how are institutions viewing stable coins and how is this working in your broader strategy?
Yeah, look, I think that the Genius Act really has opened up an opportunity for stable coins to be truly disruptive because I don't think they could have been disruptive up to that point. The problem we've always had with stable coins is we've not had utility with them, right? But I can't go to Starbucks and buy coffee with stable coin and you know, I can buy Bitcoin with it but I can't buy coffee. What's going to happen with the Genius Act is I think Chase and some of the other very large banks are going to build rails that will work on stable coin. That will mean that I now have utility. I now have a competitive product to a bank deposit account. That's going to pull liabilities out of the banking system. That's going to create a bunch of interesting dynamics around who finances that credit. I think that's where DeFi comes in. I think a lot of those loans go into DeFi. I think a lot of those deposits that are now stable coin held by us, we apply that into DeFi and generate that yield, right? So, we disintermediate the bank as the yield aggregator and we just do it directly. But one of the things that we're pushing on, we actually have a version of stable coin, a yielding coin called YieldUSD, because we're not very creative in how we name things. And with YieldUSD, it pays you an interest rate. It's backed by treasuries, freely transferable peer-to-peer. We're offering this up to banks as a competitive alternative to what JPM Coin's going to be, right? That, you know, JP Morgan is going to come in with a reward coin. It's going to have all these bells and whistles, and we're saying, well, look, we can give you a security version of this that pays interest. And if we get enough ubiquity, we can build payment rails off of that, right? And so I just think the legalization of stable coin was what was necessary. And the Genius Act has done that. And we're going to see an enormous amount of innovation coming into the space, but a lot of that's going to come out of the TradFi side.
Now, is there anything that you want to see in regulation and policy that you think is going to help, whether that's stable coins or whether that's Figure and the overall markets business.
