Figure’s Crypto-Backed Loans Are Redefining How Investors Unlock Liquidity

As crypto markets mature, so do the financial tools built around them. One of the most important innovations to emerge over the past few years is crypto-backed lending—a model that allows digital asset holders to access cash without selling their positions.

For long-term holders of Bitcoin (BTC), Ethereum (ETH), or Solana (SOL), this is more than just convenience, it’s a way to maintain market exposure while unlocking liquidity for real-world needs. But while the concept is simple, execution across the industry has been inconsistent—ranging from volatile DeFi protocols to opaque centralized lenders.

Figure is aiming to change that.

With its Crypto-Backed Loan product, Figure is bringing a more structured, transparent, and borrower-friendly approach to the space—one that increasingly stands out as a leading option in today’s market.

A More Practical Take on Crypto Liquidity

At a high level, crypto-backed loans allow users to pledge their digital assets as collateral in exchange for cash, letting them access liquidity without selling their holdings and potentially triggering taxable events. Because the loan is secured by crypto, borrowers can sometimes qualify for more favorable interest rates compared to unsecured options.

Figure’s implementation focuses on usability and cost efficiency. The product is designed to function as a potentially lower-cost alternative to traditional borrowing tools like credit cards or unsecured personal loans—particularly for users with significant crypto holdings.

Instead of navigating complex DeFi interfaces or relying on platforms with unclear risk exposure, borrowers interact with a streamlined, regulated experience.

👉 Learn more: https://figuremarkets.co/thedefiant

Competitive Rates Anchored in Real-World Lending

One of the most important considerations for any loan product is pricing—and this is where Figure is especially competitive.

Rates start around 8.91% rate (9.999% APR), depending on borrower profile and loan structure
Optimal pricing is typically available at 50% loan-to-value (LTV)
Higher liquidity options extend up to 75% LTV, with rates increasing accordingly (around 9.5%, ~12% APR)
12 month terms
Interest only payments

This tiered model gives borrowers control over the balance between cost and liquidity. Lower LTV ratios provide more favorable rates and a wider safety margin, while higher LTV options allow users to access more capital when needed.

Unlike many DeFi protocols, where interest rates fluctuate dynamically, Figure emphasizes predictable terms and transparent pricing—a key advantage for users managing longer-term financial plans.

The Biggest Pain Point in Crypto Lending—Solved

Across both DeFi and CeFi platforms, one issue has consistently stood out: liquidation risk.

In most crypto lending systems:

If the value of your collateral drops below a threshold,
Your assets are automatically liquidated—often during periods of peak volatility

This can result in forced selling at the worst possible time, locking in losses and removing future upside.

Figure introduces a different model with its Liquidation Protection feature.

What Is Liquidation Protection?

Liquidation Protection⁴ is an optional add-on available to borrowers in select U.S. states (BTC & ETH backed loans only). It fundamentally changes how risk is managed during the life of the loan.

How it works:

For an upfront, non-refundable fee (2% of the loan amount),
Figure agrees not to issue margin calls or liquidate collateral due to market price movements during the loan term

What this means in practice:

No forced selling during short-term volatility as long as the loan is current⁴
No cascading liquidations triggered by sudden market drops
Repayment obligations—including interest—are deferred until the end of the loan term

This approach shifts the experience from reactive risk management to time-based resolution, giving borrowers the ability to ride out market cycles instead of being forced out of positions.

In a market where liquidation events have historically caused significant losses, this feature represents a meaningful evolution in borrower protection.

How Figure Compares Across the Lending Landscape

Comparisons are based on general market observations and may not apply to all providers

Crypto-backed lending today generally falls into three categories:

DeFi Protocols (e.g., Aave)

Permissionless and transparent
Require overcollateralization
Feature instant liquidations and variable rates

Centralized Lenders (CeFi)

User-friendly interfaces
Often lack transparency around risk
Have faced well-documented solvency issues in past market cycles

Figure’s Hybrid Model

Combines blockchain infrastructure with regulated, licensed lending practices
Offers fixed terms and clearer pricing``
Introduces borrower protections not commonly found elsewhere

Figure’s model is designed to bridge the gap—retaining the benefits of crypto while incorporating the safeguards of traditional finance.

Why Figure Stands Out in 2026

While different platforms may suit different users, Figure’s crypto-backed loans stand out in several key areas:

Transparent, fixed-rate structures that reduce uncertainty
Flexible LTV options tailored to different risk tolerances
Optional liquidation protection, addressing a key industry need that wasn't being met
A regulated framework, offering a level of trust many users now prioritize

As the industry continues to evolve, products that prioritize both innovation and risk management are likely to define the next phase of adoption.

The Bottom Line

Crypto-backed loans are no longer just a niche DeFi primitive—they are becoming a core financial tool for digital asset holders.

Figure’s approach reflects this shift. By combining competitive rates, clear terms, and borrower-first features like liquidation protection, it offers a more stable and practical alternative to traditional crypto lending models.

For investors looking to access liquidity without selling their crypto, Figure is increasingly positioning itself as one of the most compelling options available today.

Disclaimers:

Figure Lending LLC dba Figure 650 S. Tryon Street, 8th Floor, Charlotte, NC 28202. 888) 819-6388. NMLS ID 1717824. For licensing information go to www.nmlsconsumeraccess.org. Equal Opportunity Lender

Figure Lending LLC is not authorized by the New York State Department of Financial Services. No mortgage solicitation activity or loan applications for properties located in the State of New York can be facilitated by Figure Lending LLC

For general customer support, call (888) 819-6388 Monday - Friday, 6am - 9pm PT, Saturday - Sunday, 6am - 5pm PT (excluding holidays).

Equal Housing Opportunity

Digital currency is not legal tender, is not backed by the government, and BIA accounts are not subject to FDIC or SIPC protections

*Liquidations will still occur if the loan becomes delinquent. The protective hedge applies only to price declines, not to missed payments, defaults, or violations of loan terms. Liquidation Protection is only available in certain states and jurisdictions. More information on Liquidation Protection can be found here..

Availability:
Crypto loans are offered to U.S. borrowers by Figure Lending LLC. This product is not available to U.S. residents of DC, ID, IL, KY, MD, MS, SD, TX, VT, or VA.

Crypto loans are offered through Figure Markets Credit LLC to residents of the state of New York and to international customers except in the following jurisdictions: Crimea (Ukraine), Donetsk (Ukraine), Luhansk (Ukraine), Afghanistan, Albania, Belarus, Central African Republic, Congo (the Democratic Republic), Cuba, Ethiopia, Haiti, Iran (Islamic Republic of), Iraq, Lebanon, Libya, Mali, Myanmar (Burma), Nicaragua, Nigeria, North Korea (Democratic People's Republic of), Pakistan, Palestine (State of), Russia, Somalia, South Sudan, Sudan, Syria, Ukraine, Venezuela, Yemen, or Zimbabwe.

Lender & Licensing:
Figure Markets Credit LLC. 650 S. Tryon Street, 8th Floor, Charlotte, NC 28202. (888) 926-6259. NMLS ID 2559612. For licensing information, go to www.nmlsconsumeraccess.org.

Crypto Loans starts at a minimum of $5,000, subject to state and jurisdiction-specific legal limitations. Your loan amount will ultimately depend on the amount of collateral in your account and your eligibility will be determined by your state or jurisdiction of residence, credit profile, and other personal information available at the time of your application.

1. General minimum and maximum loan amounts may vary subject to state-specific legal limitations.

2. Repayment Period (Minimum-Maximum): 12 months
Maximum APR: 12.62% APR (APR includes interest plus applicable fees such as the 1% origination fee). Available interest rates for Figure's Crypto-Backed Loan are 8.91% (9.999% APR) at 50% LTV or 11.50% (12.62% APR) up to 75%.
Representative Example (Total Cost): As an example, a borrower receives a Crypto Backed Loan at 50% LTV of $10,000 for a term of 12 months, with an interest rate of 8.91% and a 1% origination fee of $100, for an APR of 9.999%. In this example, the borrower will receive $10,000 and will make 12 monthly payments of $74.25. Rates will be higher for applications secured by assets with a higher LTV ratio. The Figure Crypto-Backed Loan has a 12 month interest-only repayment term and allows for a maximum initial LTV ratio of 75%. Interest rates change frequently so your exact interest rate will depend on the date you apply and may depend on many factors such as LTV ratio.

3. Obtaining a crypto-backed loan generally does not trigger an upfront taxable event. Tax treatment may vary based on individual circumstances. Consult your tax advisor.

4. Liquidation protection is only available in CA, NY, FL, PA, AL, AK, GA, HI, MA, UT. Liquidations will still occur if the loan becomes delinquent. More information about liquidation protection can be found here. The Figure Crypto Backed Loan (CBL) allows eligible users to borrow U.S. dollars secured by crypto collateral. The maximum loan-to-value (“LTV”) ratio is 50% at origination.

5. Approval is not guaranteed.

Investing in cryptocurrencies involves significant risks. Cryptocurrency trading is not available in NY. Please click here for risk disclosures on investing and trading in cryptocurrencies.

Figure Payments Corporation offers self-directed investors and traders cryptocurrency services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. Figure Payments Corporation's NMLS ID number is 2033432, and is located at 100 West Liberty Street, Suite 600, Reno, NV., 89501. You can verify Figure Payments licensing status at the NMLS Consumer Access website. Click here for Figure Crypto's state license and regulatory disclosures.