YLDS

YLDS: A Dollar-Linked Digital Security Built for On-Chain Yield

YLDS is designed to behave like a dollar-settled asset while legally functioning as an interest-bearing face-amount certificate. Its value proposition depends on FCC’s reserves, Figure’s transfer and compliance infrastructure, and access to approved redemption channels.

A security rather than a conventional stablecoin

YLDS is the digital representation of Figure Transferable Certificates issued by Figure Certificate Company, or FCC. FCC describes the certificates as interest-bearing debt securities registered under the Investment Company Act of 1940. The product launched on February 20, 2025, with each certificate carrying a face amount of $0.01. In practical terms, 100 YLDS certificates correspond to $1.00 of face value, but the holder owns a security claim against FCC rather than a bank deposit or an equity interest.

The dollar-linked design is intended to make YLDS useful for settlement, treasury management, and collateral while allowing interest to accrue. The stated rate is the overnight Secured Overnight Financing Rate, or SOFR, minus 35 basis points, with a minimum rate of 0.00%. Interest is accrued daily and generally paid in kind on the first business day of the month, although the issuer’s materials also describe an option to receive dollars.

How the on-chain structure works

YLDS is issued and transferred using blockchain technology, with Provenance Blockchain serving as the original network identified in FCC’s filings. Transfers can occur peer-to-peer, while Figure Markets provides a regulated alternative trading system for secondary transactions. The blockchain records ownership and transfer activity, but it does not remove the need for an issuer, transfer agent, compliance provider, custody arrangements, or a redemption process.

Figure Equity Solutions acts as administrator and transfer agent, maintaining certificate-owner accounts and records. Figure Payments Corporation performs AML and KYC reviews for investors, and Provenance Blockchain provides the gas-fee service described in FCC’s interim financial statements. These dependencies mean that YLDS is not a permissionless bearer asset in the same sense as many crypto tokens: eligibility, account controls, and issuer records remain part of the operating model.

Reserves, assets, and the redemption promise

FCC’s March 31, 2026 interim filing reported $601.5 million of qualified assets against a $599.7 million certificate reserve requirement. The reported assets included U.S. Treasury securities, money market funds, and repurchase agreements backed by Treasury securities. The same filing stated that the certificates may be surrendered at any time for face amount plus accrued interest, less applicable expenses or fees.

This reserve structure should not be confused with deposit insurance. FCC’s current disclosures state that YLDS certificates are unsecured obligations backed by FCC’s assets, are not bank deposits, and are not FDIC-insured. FCC also warns that losses on its assets could leave it without enough resources to meet principal or interest obligations. The formal redemption route therefore depends on FCC’s ability to perform and on the operational channels through which a holder surrenders certificates.

Access, transfers, and practical users

Purchasing and surrendering YLDS requires interaction with approved Figure channels and completion of applicable onboarding checks. The August 2026 prospectus supplement describes purchases through wire, ACH, accepted stablecoins converted into dollars by Figure Payments Corporation, or a stored-value account. Surrender proceeds can be requested by wire, ACH, stablecoin conversion, or transfer to a Figure Payments account. The supplement states that surrender processing is generally targeted within 24 hours, but bank transfers and stablecoin withdrawals can take longer.

The intended users extend beyond individuals seeking a dollar substitute. Figure presents YLDS as an instrument for institutional treasury management, on-chain collateral, settlement, and lending markets. Figure Markets’ Democratized Prime materials show YLDS being used as a lending asset against pools connected to home-equity loans, auto loans, small-business credit, crypto-backed loans, and margin activity. Those uses add potential utility, but they also introduce counterparty, collateral, platform, and liquidity dependencies beyond the basic certificate claim.

Control, governance, and ecosystem dependence

YLDS does not appear to be governed by a token-holder voting system. Control is concentrated among FCC, its corporate parent, related Figure entities, the transfer agent, service providers, and the venues that support issuance, trading, custody, and redemption. FCC’s March 2026 filing identified Figure Technologies, LLC as its sole stockholder and disclosed related-party holdings, management support, advisory fees, and transfer-agent arrangements.

Provenance documentation describes YLDS as a digital security running on Provenance and highlights developer access for collateral and treasury applications. However, that documentation describes YLDS as representing an interest in an FDIC-insured deposit account, while FCC’s current website and SEC disclosures describe unsecured face-amount certificates backed by FCC assets and expressly disclaim FDIC insurance. This inconsistency should be treated as an unresolved documentation issue rather than silently harmonized.

What the design does not solve

YLDS combines a fixed face amount, variable interest, blockchain transferability, and a regulated issuer structure, but those features do not guarantee a constant secondary-market price. FCC states that off-chain transactions may occur above or below face amount and that it does not seek to guarantee a stable net asset value. Market access can also vary by jurisdiction, venue, wallet support, and compliance status.

For newcomers, the central distinction is between transferability and redemption. A token may move on-chain at any time while converting it into dollars still depends on an eligible account, issuer processing, banking rails, accepted assets, and FCC’s ability to satisfy its obligations. The product therefore resembles a programmable short-duration security more than an uncensorable cash equivalent.

Key takeaways

• YLDS is a registered interest-bearing security, not a conventional stablecoin or bank deposit.
• Each certificate has a $0.01 face amount, with interest tied to SOFR minus 35 basis points and a 0.00% floor.
• Provenance provides the original blockchain infrastructure, while Figure entities control issuance, records, compliance, and redemption.
• FCC’s reported reserves consisted primarily of cash equivalents, Treasury securities, money market funds, and Treasury-backed repurchase agreements.
• On-chain transferability does not eliminate issuer, banking, KYC, custody, or redemption dependencies.
• Official documentation contains conflicting descriptions of the backing structure, making current prospectus and FCC disclosures the more relevant references.

Risks and open questions

• Credit and reserve risk remain because YLDS certificates are unsecured obligations of FCC and are not FDIC-insured.
• A secondary-market price can trade above or below face value even if the intended redemption value is maintained.
• Redemption timing depends on Figure’s processing, banking rails, accepted stablecoins, blockchain conditions, and account eligibility.
• Interest is variable and can fall to the stated 0.00% minimum if the reference rate declines sufficiently.
• Related-party concentration is material: Figure entities provide ownership, management, advisory, transfer-agent, AML/KYC, custody, and marketplace functions.
• Provenance documentation and FCC disclosures describe different backing arrangements; the discrepancy should be resolved by consulting the latest prospectus and periodic filings.