# Democratized Prime

> Democratized Prime is a decentralized lending marketplace operated by Figure Markets that connects lenders and borrowers through pools backed by real-world and crypto collateral.

- Canonical URL: https://iq.wiki/wiki/democratized-prime
- Categories: Exchanges & Marketplaces
- Tags: DEX
- Created: 2026-10-25T02:14:37.848Z
- Last updated: 2026-10-25T02:14:37.848Z
- Source: IQ.wiki — the world's largest blockchain and crypto encyclopedia (https://iq.wiki)

---

**Democratized Prime** is a decentralized lending marketplace operated by [Figure](https://iq.wiki/wiki/figure) Markets that connects lenders supplying cash or digital assets with borrowers seeking liquidity against [collateral](https://iq.wiki/wiki/collateral), including home-equity, auto, small-business, and crypto-backed loans. Launched in June 2025, it brings borrower interest from loans originated by [Figure](https://iq.wiki/wiki/figure) and its partners on-chain, giving individual and institutional lenders access to credit markets that [Figure](https://iq.wiki/wiki/figure) says have traditionally been reserved for institutions.[\[14\]](#cite-id-1xds6ms3ck)​[\[2\]](#cite-id-itpg1ktd4t)​

The service uses different pool structures, including hourly Dutch auctions and pools with continuously adjusted live rates. [Figure](https://iq.wiki/wiki/figure) Markets says lenders can deposit and withdraw assets subject to pool liquidity and protocol rules; rates vary with supply and borrowing demand and are not guaranteed.[\[3\]](#cite-id-6a3blg085a)​[\[1\]](#cite-id-54htvfcb5y)​

## Overview

Democratized Prime is a pool-based lending marketplace operated by [Figure](https://iq.wiki/wiki/figure) Markets. Launched in June 2025, it connects lenders with borrowers seeking liquidity against real-world and crypto-backed credit. Its pools include lending backed by home-equity, auto, small-business, and crypto-backed loans. The marketplace has expanded distribution of related [Hastra](https://iq.wiki/wiki/hastra) yield assets through integrations on other networks; these integrations do not indicate that the underlying Democratized Prime lending pools migrated from their networks.[\[11\]](#cite-id-9cfruwjw79)​[\[12\]](#cite-id-hknx7x8g6y)​[\[13\]](#cite-id-mwqro8kxys)​

## History

​[Figure](https://iq.wiki/wiki/figure) launched Democratized Prime in June 2025. On July 23, 2025, [Figure](https://iq.wiki/wiki/figure) announced that Synergy One Lending was the first institutional client to fund through Democratized Prime. The initial use case was a short-term lending warehouse line backed by home-equity lines of credit (HELOCs) originated using [Figure](https://iq.wiki/wiki/figure)’s technology. Synergy One supplied corporate treasury capital and could also use the marketplace as a funding source for HELOCs it originated. [Figure](https://iq.wiki/wiki/figure) described the arrangement as providing institutions with access to short-duration, overcollateralized claims backed by real assets, with daily liquidity, settlement, and reporting.[\[2\]](#cite-id-itpg1ktd4t)​

Figure said it had recently launched Democratized Prime for institutions seeking returns on short-term capital. Its CEO, Michael Tannenbaum, said Synergy One had previously adopted Figure’s embedded HELOC model and Figure Connect, and predicted other Figure partners would follow its use of the marketplace. At the time of the announcement, Figure reported that more than 175 partners used its loan-origination system and capital market, and that those partners had originated more than $16 billion of home equity.[\[2\]](#cite-id-itpg1ktd4t)​

A 2025 offering document described two live pool types: HELOC and margin-trading pools. It also described plans for dozens of additional pools and explained the [YLDS](https://iq.wiki/wiki/ylds)–HELOC pool’s hourly Dutch-auction mechanism.[\[4\]](#cite-id-azil493mkx)​

Figure Markets later introduced a Crypto-Backed Loan (CBL) Pool. A Figure communication filed with the U.S. Securities and Exchange Commission said the pool offered up to 7.5% [annual percentage rate (APR)](https://iq.wiki/wiki/annual-percentage-rate-apr) at launch and reported approximately $11 million in borrowing demand, backed by crypto-backed loans originated on the [Provenance](https://iq.wiki/wiki/provenance) [blockchain](https://iq.wiki/wiki/blockchain).[\[5\]](#cite-id-8v4qr92kdy)​

Auto loans were the first new asset class added beyond home-equity products. Figure and its on-chain credit platform [Hastra](https://iq.wiki/wiki/hastra) announced the addition as part of a longer-term plan to bring multiple consumer-credit categories into one marketplace. [Hastra](https://iq.wiki/wiki/hastra) launched in 2025 on [Solana](https://iq.wiki/wiki/solana), using Figure’s loan-origination and credit systems to bring real-world assets on-chain. Figure planned to expand [Hastra](https://iq.wiki/wiki/hastra) to Ethereum-compatible chains, with [Ethereum](https://iq.wiki/wiki/ethereum) as its first such chain; the auto-finance product was planned to launch first on [Solana](https://iq.wiki/wiki/solana), with an [Ethereum](https://iq.wiki/wiki/ethereum) rollout around June 2026 reported as a plan in April 2026. Home-equity exposure already available on [Solana](https://iq.wiki/wiki/solana) was also planned for the new chains.[\[6\]](#cite-id-sow6k3g0is) By October 2026, [Hastra](https://iq.wiki/wiki/hastra)’s product page listed PRIME and AUTO as live on both [Solana](https://iq.wiki/wiki/solana) and [Ethereum](https://iq.wiki/wiki/ethereum).[\[19\]](#cite-id-p1pkmlsk1e)​

### Platform Growth and Distribution

​[Figure](https://iq.wiki/wiki/figure)’s distribution expanded through integrations for related assets.

On August 4, 2026, Kamino announced that [Hastra](https://iq.wiki/wiki/hastra)’s AUTO yield token, backed by auto-loan exposure routed through Democratized Prime, was available on [Solana](https://iq.wiki/wiki/solana) for supply, borrowing against, and leveraged looping. Under the described flow, wYLDS staked through [Hastra](https://iq.wiki/wiki/hastra) directs capital to the auto pool, and AUTO represents the resulting yield-bearing position. Leveraged looping adds exposure and risk.[\[12\]](#cite-id-hknx7x8g6y)​

On October 20, 2026, [Tempo](https://iq.wiki/wiki/tempo) announced support for Hastra-minted PRIME and wYLDS on [Tempo](https://iq.wiki/wiki/tempo) Earn. The assets are connected to [Figure](https://iq.wiki/wiki/figure)’s HELOC lending and bridged to [Tempo](https://iq.wiki/wiki/tempo) using [Chainlink](https://iq.wiki/wiki/chainlink)’s Cross-Chain Interoperability Protocol (CCIP). PRIME is created by [staking](https://iq.wiki/wiki/staking) wYLDS, and its return varies with lending demand and pool utilization.[\[13\]](#cite-id-mwqro8kxys)​

On October 23, 2026, Tempo announced support for Figure’s [YLDS](https://iq.wiki/wiki/ylds) through Tempo Earn.[\[15\]](#cite-id-aayhf3lpv0) These integrations provide distribution and access for related assets; they do not mean that all underlying Democratized Prime pools migrated to those networks.

## Technology and Architecture

​[Figure](https://iq.wiki/wiki/figure) Markets maintains a Democratized Prime smart-contract repository containing CosmWasm contracts written for chains that provide [Provenance](https://iq.wiki/wiki/provenance) modules through `provwasm-std`. The repository describes the system as an index-based lending pool with a kink interest-rate model. Utilization is total borrowing divided by pool liquidity. Below the kink, the borrower rate rises linearly from the minimum rate to the target rate at the kink; above it, the rate rises more steeply toward the maximum rate. The lender rate equals the borrower rate multiplied by utilization and by one minus the reserve factor.[\[10\]](#cite-id-tp52qj8p0m)​[\[20\]](#cite-id-ni2vmqtb2v) A receipt token records lenders’ scaled balances against the pool’s liquidity index, while a price oracle supplies asset mappings and U.S.-dollar price data used in pool risk and valuation.[\[10\]](#cite-id-tp52qj8p0m)​

### Lending Mechanics

Users select a pool based on the asset they want to lend and the [collateral](https://iq.wiki/wiki/collateral) or borrower activity against which it is lent. [Figure](https://iq.wiki/wiki/figure) Markets manages borrower matching, interest collection, and [collateral](https://iq.wiki/wiki/collateral) in pools accessed through its service. The company says loans are backed by [cryptocurrency](https://iq.wiki/wiki/cryptocurrency) or real-world assets locked on-chain and that [collateral](https://iq.wiki/wiki/collateral) values are monitored against loan-to-value requirements.[\[3\]](#cite-id-6a3blg085a)​[\[1\]](#cite-id-54htvfcb5y)​

In the [YLDS](https://iq.wiki/wiki/ylds)–HELOC Dutch-auction pool described in a 2025 offering document, lenders submit [YLDS](https://iq.wiki/wiki/ylds) offers specifying an amount and minimum acceptable rate. Borrowers accept offers at or below the rate they are prepared to pay. At the top of each hour, the [smart contract](https://iq.wiki/wiki/smart-contract) matches demand with offers, filling the most competitive offers first; lenders filled in that cycle receive the same market-clearing rate. Interest begins accruing on filled offers for the hour, and [YLDS](https://iq.wiki/wiki/ylds) moves from the orderbook to the borrower’s wallet when the loan settles. A lender’s offer can earn [YLDS](https://iq.wiki/wiki/ylds) interest while waiting to be accepted.[\[4\]](#cite-id-azil493mkx)​

The 2025 document said lenders could withdraw after each hourly clearing when resting liquidity was available. It also described a 30% rate that could apply when there was insufficient resting liquidity for withdrawals, until more liquidity was added. Borrowers could draw up to 90% of pledged loan value, leaving a 10% [collateral](https://iq.wiki/wiki/collateral) cushion; collateral metrics updated hourly, and collateral could be liquidated if a borrower failed to repay. The document cautioned that advertised rates could change rapidly and that the rate was fixed when a loan was approved, not when a lender selected or accepted an offer.[\[4\]](#cite-id-azil493mkx)​

Other pools use live rates that change with utilization, liquidity, and market demand. [Figure](https://iq.wiki/wiki/figure) Markets describes interest as accruing continuously in these pools and says users can add or withdraw assets subject to available liquidity and the applicable pool rules.[\[1\]](#cite-id-54htvfcb5y)​[\[3\]](#cite-id-6a3blg085a)​

The pool structures are not uniform. [Figure](https://iq.wiki/wiki/figure) Markets’ 2026 addendum describes specified smart-contract pools as live-rate pools, while excluding HELOC+, auto-loan, Dutch-auction, and other pools governed by separate addenda or pool-specific terms. It states that the protocol determines rates and other pool parameters, and that withdrawals depend on protocol rules and available liquidity.[\[7\]](#cite-id-svxu5pe5jb)​

### Smart-Contract Architecture

​[Figure](https://iq.wiki/wiki/figure) Markets says it publishes the code. The repository states that development remains internal to [Figure](https://iq.wiki/wiki/figure) Markets and that external contributions, including pull requests and feature-design collaboration, are not solicited.[\[10\]](#cite-id-tp52qj8p0m)​

## Products

### Real-World Asset Pools

The HELOC pool lends [YLDS](https://iq.wiki/wiki/ylds) against home-equity lines originated by [Figure](https://iq.wiki/wiki/figure) and its partners. [Figure](https://iq.wiki/wiki/figure)’s description of the funding path directs users to deposit U.S. dollars into a [Figure](https://iq.wiki/wiki/figure) Markets account, purchase [YLDS](https://iq.wiki/wiki/ylds), and lend it into the pool. [Figure](https://iq.wiki/wiki/figure) says it applies credit criteria to underwrite the loans and requires borrowers to replace non-performing [collateral](https://iq.wiki/wiki/collateral). The company reported a 9% yield for the pool as of February 2026; this is a historical snapshot, not a current offer.[\[8\]](#cite-id-qn27mu2itz)​

The broader Home Equity pool is described as accepting [YLDS](https://iq.wiki/wiki/ylds) against real-estate-backed loans, including HELOCs, Residential Transition Loans (RTLs), and Debt Service Coverage Ratio (DSCR) loans. These loans allow homeowners and real-estate investors to borrow against residential property; a portion of borrower interest payments covers interest on matched lending offers.[\[9\]](#cite-id-ujhc2py5oq)​

The Automobile pool lends against vehicle-secured loans originated by [Agora](https://iq.wiki/wiki/agora), which Figure describes as an AI-powered auto-finance platform. Figure says the pool provides exposure beyond home equity, while noting that its average FICO score is lower than that of the HELOC pools. The company identifies overcollateralization and mechanisms to replace underperforming loans quickly as investor protections, and reported a 9% yield as of March 2026; this is a historical snapshot, not a current offer.[\[8\]](#cite-id-qn27mu2itz)​

The Small and Medium-Size Business (SMB) pool provides exposure to credit backed by receivables from operating U.S. businesses. Figure describes the pool as drawing on financing obligations and cash flows from thousands of vetted small businesses, with returns generated as businesses repay and with collateralized assets supporting the credit.[\[9\]](#cite-id-ujhc2py5oq)​

### Crypto-Backed and Margin Pools

The CBL Pool lends [YLDS](https://iq.wiki/wiki/ylds) against [Figure](https://iq.wiki/wiki/figure) crypto-backed loans. The loans are secured by [cryptocurrency](https://iq.wiki/wiki/cryptocurrency), including bitcoin (BTC), ether (ETH), and solana (SOL); a 2026 [Figure](https://iq.wiki/wiki/figure) description says the loans have loan-to-value ratios below 85%. Some loans include [liquidation](https://iq.wiki/wiki/liquidation) protection intended to keep them active and interest-bearing during declines in crypto markets. The pool’s launch communication specified [YLDS](https://iq.wiki/wiki/ylds) as its lending asset and used a Dutch auction to match offers with borrowing requests hourly.[\[8\]](#cite-id-qn27mu2itz)​[\[5\]](#cite-id-8v4qr92kdy)​

​[Figure](https://iq.wiki/wiki/figure) also offers margin pools in USD, [USDC](https://iq.wiki/wiki/usdc), and USDT. These pools lend to approved investors seeking [leverage](https://iq.wiki/wiki/leverage) and to [Figure](https://iq.wiki/wiki/figure) clients borrowing assets for use outside the exchange. Figure says it manages margin-account risk and enforces loan-to-value requirements; lenders are exposed to the quality of the assets rather than the creditworthiness of an individual borrower. Figure reported rates of 7.9% to 9% as of February 2026; this is a historical snapshot, not a current offer.[\[8\]](#cite-id-qn27mu2itz)​

Separate pools allow users to lend ETH, SOL, or BTC to eligible contract participants (ECPs) seeking to short-sell [cryptocurrency](https://iq.wiki/wiki/cryptocurrency). ECPs are persons or entities meeting the statutory definition in the U.S. Commodity Exchange Act.[\[16\]](#cite-id-8mub1k5nhe) Figure says it imposes loan-to-value requirements on these accounts and liquidates positions if thresholds are breached. Reported yields for these pools ranged from 1% to 2.9% as of February 2026; this is a historical snapshot, not a current offer.[\[8\]](#cite-id-qn27mu2itz)​

### YLDS in Democratized Prime

​[YLDS](https://iq.wiki/wiki/ylds) is a Figure-issued [stablecoin](https://iq.wiki/wiki/stablecoin) used in several Democratized Prime pools. The 2025 offering document described it as a [Figure](https://iq.wiki/wiki/figure) Markets SEC-registered yielding [stablecoin](https://iq.wiki/wiki/stablecoin) that could be purchased through the [Figure](https://iq.wiki/wiki/figure) Markets app or website. It stated that [YLDS](https://iq.wiki/wiki/ylds) accrued interest at the Secured [Overnight](https://iq.wiki/wiki/overnight) Financing Rate (SOFR) minus 50 basis points, and gave an approximate rate of 3.85% as of July 17, 2025; this is a historical snapshot, not a current offer.[\[4\]](#cite-id-azil493mkx)​

On October 23, 2026, [Tempo](https://iq.wiki/wiki/tempo) announced that [Figure](https://iq.wiki/wiki/figure)’s [YLDS](https://iq.wiki/wiki/ylds) was available through [Tempo](https://iq.wiki/wiki/tempo) Earn. [Tempo](https://iq.wiki/wiki/tempo)’s announcement described [YLDS](https://iq.wiki/wiki/ylds) as accruing variable interest at SOFR minus 35 basis points, with interest accruing daily and paid monthly.[\[15\]](#cite-id-aayhf3lpv0)​

A separate [Figure](https://iq.wiki/wiki/figure) communication describes YLDS as unsecured face-amount certificates issued and solely backed by the assets of Figure Certificate Company (FCC), a subsidiary of Figure Markets Holdings. FCC is not a bank, and its certificates are not bank deposits or obligations, are not guaranteed or endorsed by a bank or financial institution, and are not insured by the Federal Deposit Insurance Corporation or Federal [Reserve](https://iq.wiki/wiki/reserve). The certificates are also not insurance products, equity investments, or money-market mutual fund investments. The communication warns that losses on FCC’s assets could impair its ability to meet interest or principal obligations, and that the [stablecoins](https://iq.wiki/wiki/stablecoin)’ intended value of $0.01 per share is not guaranteed.[\[5\]](#cite-id-8v4qr92kdy)​

The same communication identifies Figure Markets Credit LLC as the provider of crypto loans and says crypto loans are offered to New York residents and international customers subject to jurisdictional exclusions. It also states that [cryptocurrency](https://iq.wiki/wiki/cryptocurrency) trading is unavailable in New York.[\[5\]](#cite-id-8v4qr92kdy)​

## Pool Terms and Risk

​[Figure](https://iq.wiki/wiki/figure) Markets’ August 25, 2026, addendum describes smart-contract pools in which users supply supported digital assets to, or borrow them from, contracts deployed on a digital-asset network. Users interact through their own wallets and authorize transactions themselves; they can act as lenders, borrowers, or both. The addendum identifies FMHI as the provider of the technology interface; FMHI is [Figure](https://iq.wiki/wiki/figure) Markets Holdings, Inc., a wholly owned subsidiary of [Figure](https://iq.wiki/wiki/figure) Technology Solutions, Inc.[\[7\]](#cite-id-svxu5pe5jb)​[\[17\]](#cite-id-ipdq0b79yy) Unless a pool schedule specifies otherwise, [Figure](https://iq.wiki/wiki/figure) Group members do not act as custodians, guarantors, fiduciaries, servicers, or [liquidation](https://iq.wiki/wiki/liquidation) agents. Users’ rights and obligations arise from their direct interactions with the protocol and its applicable terms.[\[7\]](#cite-id-svxu5pe5jb)​

The addendum’s four schedules—for crypto-backed loans, home equity, automobile loans, and SMB loans—identify [YLDS](https://iq.wiki/wiki/ylds) as both the supported supply and borrow asset. Each specifies a 95% [collateral](https://iq.wiki/wiki/collateral) ratio or loan-to-value requirement, a 100% [liquidation](https://iq.wiki/wiki/liquidation) threshold, a 2% [liquidation](https://iq.wiki/wiki/liquidation) penalty or fee, a $10 minimum transaction amount, and Forge as the oracle and valuation source. The schedules also set different eligible [collateral](https://iq.wiki/wiki/collateral) assets, advance rates, and reserve factors. For example, the automobile schedule lists auto.forge [collateral](https://iq.wiki/wiki/collateral) at a 91.57% Forge advance rate and a 5.555% reserve factor; the home-equity schedule lists multiple [collateral](https://iq.wiki/wiki/collateral) types with advance rates from 89.47% to 100% and a 5.883% reserve factor.[\[7\]](#cite-id-svxu5pe5jb) Figure separately describes Figure Forge as its platform for fractionalizing whole loans into liquid, single-dollar participation units.[\[18\]](#cite-id-diciodxe0f)​

The addendum states that supplied assets may be pooled and lent to borrowers, and that lenders generally do not select individual borrowers. Protocols determine rates, collateral requirements, valuation methods, [liquidation](https://iq.wiki/wiki/liquidation) thresholds, and liquidation processes. Liquidations may be automatic and irreversible; proceeds may not cover amounts owed, and losses may fall on borrowers, lenders, or other participants according to protocol rules and applicable law.[\[7\]](#cite-id-svxu5pe5jb)​

Risks identified in the addendum include smart-contract vulnerabilities, inaccurate or manipulated oracle prices, illiquidity, borrower defaults, failed or slippage-affected liquidations, [blockchain](https://iq.wiki/wiki/blockchain) outages, network congestion, asset freezes, [stablecoin](https://iq.wiki/wiki/stablecoin) depegging, wallet compromise, and legal or regulatory uncertainty. Transactions may be irreversible, and users may lose supplied assets, collateral, borrowed assets, yield, or other value. Supplied assets are not insured deposits or bank, brokerage, investment-company, or insurance products, and are not FDIC-insured, bank-guaranteed, or protected by the Securities Investor Protection Corporation.[\[7\]](#cite-id-svxu5pe5jb)​