Figure co-founder Mike Cagney said in a post on X that decentralized finance is a better fit for asset-backed finance, or ABF. He said the model can avoid rehypothecation, improve collateral directly, and support self-custody or autonomous venues as well as liquidity-backed structures. Figure, he added, has already brought ABF on-chain, but the broader shift is still in its early stages.
Cagney said roughly $6 trillion of the market has not yet migrated on-chain at scale. He listed five reasons traditional finance applications have been slow to fully move to blockchain rails: poor user interface design, the difficulty of combining qualified custody with recoverable self-custody, missing institutional features such as support for multiple wallets and tiered permissions, an unsettled regulatory process, and KYC requirements that he said can be handled through on-chain programmable screening and wallet-level permissions.
Figure co-founder Mike Cagney said in a post on X that DeFi is a better fit for asset-backed finance, or ABF. He wrote that it can avoid rehypothecation, improve collateral directly, and support self-custody or autonomous venues, along with liquidity-backed structures.
On-chain migration remains early
Cagney said Figure has already brought ABF on-chain, but the market is still in an early phase. He said about $6 trillion in assets has not yet moved on-chain at scale.
Five reasons he cited
According to Cagney, traditional finance applications have been slow to fully move on-chain for five main reasons: weaker user experience, the trade-off between qualified custody and recoverable self-custody, a lack of institutional features such as multiple wallets and tiered permissions, regulation that is still being sorted out, and KYC requirements that can be addressed through on-chain programmable screening and wallet-level permissions.
This article was originally published by Bit.Fan. For more cryptocurrency news and market insights, visit www.bit.fan. Disclaimer:
The market information, project data, and third-party content displayed on this platform are for industry information sharing only and do not constitute any form of investment advice or return commitment.
Cryptocurrency trading carries high risks. Users should fully assess their risk tolerance and make independent decisions. All profits, losses, and legal responsibilities are borne by the users themselves.
