- The Figure Heloc token crashed by 81% in a flash event on October 24.
- The token represents $13 billion worth of home equity loans.
- The cause of the crash is currently unknown.
- Trading volume for the token was extremely low, at about $1,500 over 24 hours.
- Questions remain about the transparency and liquidity of blockchain-based real estate loans.
On October 24, the Figure Heloc token, linked to $13 billion in home equity loans, sharply dropped 81%, falling from around $1 to as low as $0.19 before recovering. The token crash occurred around 10 p.m. London time and briefly erased over $10 billion in market value.
The token is issued by blockchain lender Figure, which uses the Provenance blockchain to back loans such as Home Equity Lines of Credit (HELOCs) via its YLDS stablecoin. The firm has a market capitalization of $8.5 billion after raising nearly $800 million in a U.S. initial public offering last month. No official explanation for the crash has been given by Figure.
Market data from Figure Markets, the trading platform linked to Figure, shows only $1,516 in token transactions in the 24 hours around the crash. Such low liquidity can cause large price swings when relatively small trades happen. Typically, assets of similar size support daily trading volumes in the hundreds of millions.
Figure promotes the use of blockchain technology to increase liquidity and reduce costs for illiquid assets like loans. Its co-founder Mike Cagney stated in September, “By taking historically illiquid assets — such as loans — and putting these assets and their performance history onchain, blockchain can bring liquidity to markets that have never had such.” However, critics have noted a lack of on-chain transparency for the loans. The crypto data platform DefiLlama’s lead, known as 0xngmi, said earlier this year that much of the loan volume Figure claims is conducted in fiat currency and is difficult to verify on the blockchain.
The tokenization of real-world assets, including consumer loans and government debt, is a growing market. According to DefiLlama, it has expanded to about $18 billion in 2024. Proponents envision tokenization could eventually reach a $19 trillion industry by 2033, as predicted by Ripple and Boston Consulting Group.
For more information on the token, refer to Figure Markets’ price data on Coingecko.
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