Figure Lending borrows against home-equity loans for less than a month, and PRIME holders can borrow against that position again on Morpho and Kamino, with no published figure for the second debt.
Key Takeaways
- Figure borrows short; PRIME holders can borrow again.
- Holders own a pool position, not a mortgage.
- PRIME doubles as Morpho and Kamino collateral.
- 61.5% in lending venues is not leverage.
RWA.xyz’s November 9 case study puts PRIME’s assets under management at $534 million as of November 4 and counts where the tokens sit. It does not count the debt stacked on top of them, and that gap is the story.
Debt one: Figure’s warehouse loan
A home-equity line of credit, or HELOC, lets a homeowner draw against the value of their property. The originator funds that draw on day one and only gets its money back when the loan is sold to an investor or packaged into a securitization. Warehouse financing covers the gap in between.
RWA.xyz puts Figure’s holding period at under a month. Figure Lending pledges a batch of HELOCs to its Prime marketplace, formerly called Democratized Prime, borrows YLDS against them, sells the loans, repays the pool and starts again. The homeowners on the other side repay over years; the pool’s money turns over in weeks. PRIME’s yield comes from that short cycle, not from the long one.
Hastra’s token reaches that pool through two wrappers. An investor on Ethereum swaps USDC for wYLDS, whose reserves Hastra describes as YLDS held directly or deployed into Figure’s Prime pools, then stakes wYLDS and receives PRIME, a yield-bearing receipt for the staked position. Lower-case Prime is Figure’s marketplace; upper-case PRIME is Hastra’s token. The naming is unhelpful, but the roles are distinct.
That chain also settles what the holder owns. Figure’s Prime financing terms place mortgage-related collateral in trust and agency arrangements for the pool’s lenders, and state that collateral is no guarantee of repayment and liquidation proceeds may fall short. A PRIME holder’s claim runs through Hastra’s wrapper and pool documents before it reaches those terms, which is why the legal claim behind a token needs reading separately from the asset it references. PRIME is a position in a financing pool, not a lien on a house.
Debt two: the holder’s loan
Morpho’s PRIME case study describes the second step: a holder deposits PRIME as collateral and borrows USDC or PYUSD from stablecoin suppliers, while the pledged PRIME keeps accruing its variable yield. DefiLlama’s research note on the Sentora PRIME vault puts the PRIME/PYUSD market’s liquidation loan-to-value at 86% and says the market’s oracle prices PRIME through its exchange rate to wYLDS rather than a trading price, so the position is insulated from secondary-market swings in PRIME but exposed to PYUSD’s own peg.
Nothing in that loan touches Figure. Under Morpho’s liquidation rules, a position is liquidated when debt crosses the threshold set by the market’s LLTV and collateral valuation. Interest accrues on the borrowed stablecoins every block, so a holder who borrows close to the limit and leaves the position alone drifts toward liquidation on their own debt, even if every HELOC in Figure’s pool is performing.
Debt one
Borrower: Figure Lending
Lender: Figure’s Prime pool (YLDS suppliers)
Collateral: Pledged HELOCs
Term: Under one month per batch
Repaid by: Loan-sale proceeds
Loss falls on: Pool lenders, via PRIME holders
Debt two
Borrower: The PRIME holder
Lender: Morpho or Kamino stablecoin suppliers
Collateral: PRIME tokens
Term: Open-ended, interest accrues continuously
Repaid by: The holder, or liquidation
Loss falls on: The holder first; suppliers if bad debt
What the yield is, and what borrowing against it costs
The case study’s 30-day net APY at the snapshot was 6.1%. That number belongs to early November. Hastra’s rate documentation says the earlier blended-yield model has been replaced by a HELOC+ rate that moves with utilization, meaning how much of the pool’s supply Figure is actually borrowing at a given time, minus a 0.50% annual Hastra fee. When Figure draws more of the pool, the rate rises; when loans sell and capital sits idle, it falls.
A holder who borrows against PRIME to buy more PRIME is betting on the spread between that moving rate and the Morpho borrow rate, which also moves with utilization on the stablecoin side. The arithmetic is simple and unforgiving.
One turn of leverage, in round numbers
$1,000 of PRIME, $500 borrowed and reinvested, $1,500 of exposure. At a 6% asset rate the position earns $90; at a 5% borrow rate it pays $25; net $65 against $60 unleveraged. Lift the borrow rate to 8% and the net drops to $50, below the unleveraged return.
Rates are illustrative, chosen close to the November snapshot, not PRIME or Morpho quotes. One year, flat prices, no fees, compounding, taxes or liquidation losses.
Five percentage points of extra return on a $1,000 stake buys an open-ended liability and a liquidation threshold. Whether that trade is worth it depends on two rates that neither party controls, as with other collateral-backed stablecoin loans.
Why 61.5% is not a leverage figure
Measuring leverage needs two numbers taken at the same moment: collateral pledged and debt drawn against it. The case study supplies the first. At the November 4 snapshot, Morpho held roughly $245 million of PRIME and Kamino $84 million, which RWA.xyz reports as 61.5% of AUM.
Six of every ten PRIME tokens were sitting in a lending contract. That is a distribution fact. It says nothing about how many of those tokens had a loan against them, how large each loan was, or whether the borrowed stablecoins went into more PRIME, into another protocol, or back into a bank account. A holder who parks PRIME on Morpho without borrowing is counted identically to one borrowed to the 86% limit.
Two related errors follow from the same figure. Adding the Morpho and Kamino balances to the $534 million would double-count: a token moved into a lending contract is the same token, and pledging it creates no new capital. And reading $534 million as HELOC volume originated during the period mistakes the size of the product for the activity it funds; Figure’s pool turns over in under a month, so the same dollars finance many batches.
The debt side is not secret. Morpho’s market pages show total borrow, utilization and the borrower list for each PRIME market, and Kamino publishes equivalent data, so a reader can pull both sides at one timestamp. The case study did not, and until someone does, 61.5% should be quoted as where the tokens are, not as how much is owed against them.
The number the report leaves out
RWA.xyz has documented a working channel: stablecoins fund Figure’s warehouse, Figure turns the warehouse over inside a month, and the receipt token can be posted as collateral elsewhere. What it has not documented is the one figure that would turn that description into a risk assessment: outstanding stablecoin debt against PRIME, taken on the same day as the $534 million. Without it, readers are looking at one loan book and guessing at the second.
Reporter at Coindoo
Alex is Editor-in-Chief of Coindoo and co-founder of Millennial Media Group, with nearly a decade of experience covering financial markets - crypto first, then everything else. It started in 2016 with Bitcoin. Like most people at the time, he didn't fully understand it - so he kept digging. Blockchain, tokenomics, the projects, the cycles. That curiosity never stopped, and eventually pulled him into traditional markets too: equities, commodities, macro. Not because he left crypto behind, but because you can't properly understand one without the other. What drives him is straightforward: he wants to know why something is happening, not just that it's happening. Most market coverage stops at the headline - price up, price down, here's a chart. Alex finds that kind of reporting actively unhelpful. If you walk away from an article without understanding the mechanism behind the move, what did you actually learn? He holds a degree in Tourism from New Bulgarian University - not the most obvious path into financial markets, but markets have a way of pulling in people who are simply too curious to stay out. He has authored over 200 in-depth analyses and more than 10,000 articles across crypto and traditional finance. He still thinks every day in markets teaches him something new. That's probably why he hasn't stopped.
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