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Figure Technologies and Provenance

by Alan Daniel
, Figure Technologies and Provenance

Mike Cagney, a leader in SoFi, has “closed an up to $1 billion uncommitted asset-based financing facility on the Provenance.io blockchain with Jeffries and WSFS Institutional Services”. The startup uses Provenance.io to “originate, finance, and sell its HELOC loans to banks, asset managers, and credit funds” natively on the blockchain.
Provenance will be instrumental by acting as a custodian and the facilitator of transactions within the system. At the current moment, Figure Lending utilizes Provenance to originate, fund, transact, and service HELOC loans to financial institutions. Figure Lending aims to utilize Provenance to move toward the important aspect of securitization native to the chain.

According to members from Jefferies, and heads of WSFS, the utilization of the permissioned, proof of stake based blockchain allows for transparency within the transactions, helping to reduce risk.

According to an interview conducted by Cagney, the key differentiator of the Provenance blockchain is that it allows companies to place the actual asset on the blockchain, not a representation of the asset on a blockchain. The firm is seeking to capture the entire lifecycle of the asset on the chain to prove authenticity.

Cost efficiency comes from the disintermediation of parties and the fully digitized nature of the platform. The platform is starting with the origination of securities and will seek to progress with the addition of allowing other firms to step in and trade assets via Provenance.io.

The Components of Provenance
The Provenance system includes nodes, members, market makers, and the protocol foundation. The nodes would be proof of stake oriented credible members of the financial industry.

Entities that participate as nodes within the proof-of-stake system would have a stake and would be rewarded with Hash (their token) for their stake.

Members would include asset originators, investors, hash-buyers and other marketplace participants.
Then, there are the market makers consisting of sell-side broker/dealers.

Early Stages
While Figure Lending and Provenance are still in the early stages, both projects seem to have found uses cases for the blockchain and have received funding to continue. The mission of Provenance includes capturing a portion of the $300 trillion in global financial markets by minimizing or eliminating “friction in audit, custody, trustee, reconciliation and administrative costs.”

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