The database that maintains the asset travels as the owner changes. Just being very specific, if I buy a loan, I am now creating the authoritative copy of those loans, and I'm controlling that spreadsheet. Whatever happened before I owned the loan is just a matter of when I bought it. Any modifications that I may either make purposefully or accidentally, now this becomes the source of the truth. We're obviously going to talk about blockchain, but in that context, there's a single source of truth. This is the root cause of situations like Tricolor. Even if you go from a paper to a digital process, it doesn't necessarily solve the problem. The assets still are controlled by the current rights holder, but t here's no one necessarily source of truth. Excellent. Let's turn to your technology now, Michael. Firstly, can you walk us through the steps of a Figure loan being originated all the way to those loans being tokenized onto the Provenance Blockchain? Yeah, I'm going to let Macrina actually take this one. Sure. We offer a loan origination system to underwrite standardized and homogeneous loans for Figure and also for our partners. When a borrower applies for a loan, the loan goes through the process within our loan origination system. The loan is approved on average nine days, as fast as five days. At the time of origination, the loan itself would be registered with the county under a Figure DART entity. It is recorded on DART, our Digital Asset Registry, which is a lien and eNote registry. All loans originated using Figure's loan origination system are really created on the Provenance Blockchain. It is not recorded in a private database or relied on paper documents. It goes on to the blockchain. The key characteristics of the loan are stored in an encrypted object store. Nothing is public that you can see that needs to be stored within the encrypted object store. It is hashed onto the blockchain. This all happens very instantaneously, usually within a nanosecond. There are two aspects of the technology you allude to in the post that I think are very important as it relates to on-chain verification, which are Figure Portfolio Manager and DART. Can you explain how both of these specific items work, ensure that all the parties to a transaction see the same ledger, and verify transactions? Unlike in the traditional world where assets go to the rights holders and are represented in different databases at different times, we represent our assets with tokens. These assets always stay on the blockchain. It is the rights holders that come to the assets. If someone wants to acquire the asset, they come to the blockchain, establish an account, often called a wallet, and have the owner execute a transaction on the blockchain, which associates the buyer and the buyer's wallet with that token. Later, the buyer can execute a transaction on the blockchain to associate the loan token with yet another wallet and sell the asset to a new buyer. The first buyer can then disappear and never use the blockchain again. Those actions are there forever and there for everyone to see forever. This public blockchain protocol ensures that nobody can replicate a token on the blockchain. No one can forge an asset. There is only one owner associated with the token at any time. No one can double sell. There can only be one encumbrance. Think of that as a digital padlock. No one can double pledge, going back to Tricolor. A token with an encumbrance or a digital padlock on it cannot move into another wallet until that encumbrance is removed. You cannot sell a pledged loan. Once you have this basic functionality, the rest is relatively easy. The blockchain is the source of truth. All of our ecosystem participants have the obligation to reflect all transactions, sales, and pledges on the blockchain, and to pass that same obligation along to any future buyer of the assets. We enforce this through both contractual means and through technological means. Specifically to your question, you have the Portfolio Manager system, which is a Figure product that is the interface that our clients use to see their rights or ownership and transact these rights. The Portfolio Manager reads the blockchain to see what rights you have, also known as what loans you own, what loans have been pledged to you, and writes to the blockchain to carry out your orders, such as sell or pledge or release the encumbrance, et cetera. DART is our lien and eNote registry. It works with Portfolio Manager, i t reads the transactions that Portfolio Manager writes on the blockchain and updates its registry automatically, accurately, and immediately. I like to say it sort of listens to the blockchain, not that it has ears, but it knows all the transaction activity and it's updating that. Lastly, we have an eVault where all the documents associated with a loan are stored. Traditionally, as I talked about, loan files move from one party to another in paper form or an electronic form via ship, you know, via email or SFTP or some combination. This is not the case with the Figure platform. All the loan files are stored on an eVault. They always exist. You're looking them up rather than sending them around. There's a lot less room for malfeasance and error. Let's turn to lien perfection. Can you talk to us a little bit about how Figure perfects liens and how that technology allows for on-chain verification? From a legal standpoint, DART operates similar to MERS, which is the Mortgage Electronic Registry System, it 's an ICE product. Liens are issued in the name of DART Collateral Manager, LLC, and then as the nominee for the original lender and its successors and future assignees. The original lender is listed as the lien beneficiary in the DART system. What makes DART novel is the way in which it receives input. Other registries like MERS expect one of the transacting parties to submit a data feed to report the transactions within a relatively loose time frame that is only specified contractually and cannot be enforced technologically. That approach relies on the honor system and opens windows for fraud. In contrast, DART takes its input directly from the blockchain, as I outlined, where the transaction processing system, which is the Portfolio Manager application, records the transaction immediately upon execution. DART actively listens to the blockchain for transactions it needs to reflect in its registry. Transactions reflected on DART are always accurate, and they reflect exactly as they were executed without alterations from human errors or malfeasance. It's done automatically and immediately, as I mentioned before. DART's automatic reflection of transactions also does create some operational efficiency because it eliminates the need for transacting parties to provide a data feed and also eliminates these periodic reconciliations that actually something like MERS requires. Reviewing the DART registry is routinely part of the diligence checks that our clients perform, often done by their custodians. It's a much simpler process, and it plays another important role in the Figure ecosystem b ecause we're defining the next generation of capital markets, we are causing a very major disruption in this conservative sector, in the county recorders space. That world is not going to move to blockchain at any time soon, even though if you kind of go back to the early days of blockchain, there was a lot of talk about county records and title insurance. That was a big part of the excitement around blockchain initially. We know that that world is not moving to blockchain anytime soon, and DART's role that we play is important when you think about broader disruption. Because for disruption to reach its full economic potential, the disruptor must find a way to enable the migration of legacy installed base. If you try to make the legacy forward compatible, you're limited by the current technology. Instead, you typically want to make technology backward compatible. An iPhone, as an example, replicated the dial pad of a physical phone. You couldn't try instead to turn a desk phone into a smartphone. That's kind of what we're doing with DART. We're not going to be able to make the counties forward compatible with blockchain. Instead, we're making the new technology backward compatible with the counties. We bridge digital assets with the legacy world of paper instruments. I think that technology shift is one of the reasons why we've had such robust adoption and have been able to push the market forward. I think that's something that Figure does really well. I think it's safe to say that many lenders out there are kicking the tires on their books and trying to verify collateral. Does your technology allow for easier collateral verification and auditing? Perhaps why? Yeah, I mean, the simple answer is absolutely. In the aftermath of Tricolor, we saw an increased number of requests for granting of DART access credentials to users working on behalf of warehouse lenders. Oftentimes, those would be custodians. From informal discussions, we learned that this increase in requests was the result of the warehouses performing additional inventory checks of their collateral across all of their assets, not just assets in the Figure ecosystem. We were sort of a byproduct of that. On one occasion, we were asked to provide access credentials to a person in the afternoon so that that person could complete an audit report for all of the warehouse's holdings on the Figure platform by the close of business. Needless to say, that person completed their report with time to spare because of how easy Figure makes auditing and verification through that Portfolio Manager product. The warehouse lenders know what to do, and they know where to look. Figure's Portfolio Manager enables you to see all of your rights. S o the assets you own r eminder, the assets have been pledged to you instantaneously. DART allows you to instantaneously verify that your name is listed as the beneficiary for the relevant legal instruments, like liens, eNotes, et cetera. What's even more important is that you can have the confidence in these reviews. You don't have to cross-check with other sources to develop confidence in the data. The blockchain systems reflect that common view of the world. There's no emails or paper going across. As we've talked about, there's one blockchain, e verybody's looking at it. Furthermore, the various systems in the Figure ecosystem are constantly cross-checking the information against each other in the background. Whereas, as I mentioned earlier, MERS, as an example, requires you to periodically, I think it's monthly, download your entire MERS database and certify that there are no discrepancies between the MERS registry and your enterprise records. Portfolio Manager and DART eliminate the need for any of that. When you start to think about Tricolor and what happened, or first brands, and you think like, okay, and granted, MERS is mortgage, and one of those is auto, and one of those is supply chain. The point being is there are supplier payments. The point is that you can imagine if one of the checks and balances is, please certify that you did, in fact, download your entire MERS database and certify there's no discrepancies. You can see where that falls apart. James, if you will, allow me to just take a quick opportunity to talk about servicing, loan servicing in this context. Loan servicing, what I mean here is the payments of loans for loans, collecting payments, and also managing delinquency. Although we now have some third-party servicers in our ecosystem, Figure still services most of our own loans. There are some third parties, but we do most of it ourselves. In the typical servicing construct, P&I payments, so principal and interest payments from consumer borrowers, are received in an omnibus account, like a centralized account, and then applied accordingly with remittance monthly. However, you all on the call have likely heard about Yields, which is the settlement currency we have introduced that comes with all the benefits of an SEC-approved security with the flexibility and programmability of stablecoins. That's our stablecoin. Yields is backed by short-term treasuries, pays interest, and has a fixed exchange rate with fiat. Yields opens up tremendous opportunities for transparency and servicing. If the relevant parties, such as the asset owner and the warehouse, allow the funds in the custodial account to be held in Yields, it becomes very easy to sequester funds accordingly. The servicer can then use the encumbrances recorded on the blockchain to determine the account or wallet to which the funds from a consumer's payment should be applied. This will provide better separation of funds and better security. Reminder, the legacy process is just dumping in random ACH payments into one master account and then trying to apply them. This is really just the tip of the iceberg. The deposit of a custodial fund into a Yields account for the warehouse lender enables the warehouse to monitor the flow of funds continuously. The unpaid principal balance for the loans pledged as collateral to a warehouse are also then therefore updated in real time. They will real-time process a consumer's payment. If any of the loans were double pledged, the funds from consumers' P&I payments could be applied to the custodial account of only one of the pledges. There would be an abnormality detected, right? Because again, it's all back to how do we prevent something like this happening. You can have, when you're servicing in stablecoin, the matching of assets would be another way to prevent something like the Tricolor example. You get a lot more transparency in asset performance and funds movement through Figure's technology. Yields is ushering in a new era of transparency and auditing and due diligence. I think what that shows you is we're continuing to build tools that, you know, when people think of stablecoin, often they're talking about money movement. Stablecoin, as applied to our ecosystem, is really powerful as another way. Not only is it much more operationally efficient, which is one of the takeaways here, but it's also a way to prevent these kinds of problems. I think it's why you're going to see more and more assets migrate towards our capital market. Excellent. Michael, you touched before briefly on title insurance. I want to dig in a little bit on that. You've talked previously about how your technology does not require title insurance for loans. Maybe you could just dig in a little bit on that. How does Figure's technology obviate the need for title insurance? Are you insuring the title yourself? Yeah, title insurance performs a number of functions in the mortgage process in addition to ensuring that the loan has free and clear title to the property through the owner, and therefore, the loan is not encumbered. Figure's process does the same. We identify encumbrances to the title at the county level, search for liens, and pay off existing liens. We just don't wrap that in an insurance product or frankly pay someone to do so. It's part of our kind of low-cost nature of what we do. Instead, we confirm that the lien is clean upfront, or we make it so via payoffs, and then we use DART to track the ownership of that lien. We don't necessarily need the title insurance in our model if these loan steps are taken. For people that are closer to the mortgage space, they'll probably be aware that the title insurance goes hand in hand with the agency process, right? Fannie Mae and Freddie Mac. What's interesting about Figure is we're building our own capital market that's not just specific to mortgage but has a lot of mortgage assets. It's a competitor to what Fannie Mae and Freddie Mac have built, and it's all on blockchain. We don't feel that we need this, given all the things I've been talking about. We actually view that as not necessary and potentially added cost versus the low-cost products that we push. All right. Turning to the blockchain. If more lenders and originators do move on to the blockchain, but they all use their own proprietary blockchains, and admittedly, there's been fragmentation in the number of blockchains out there, even in recent months, does this make the system more complex, given lack of interoperability? How would, in your view, this interoperability problem be solved over time? Yeah, Figure uses Provenance, which is a public blockchain. It's open to everybody. That having been said, you do raise an excellent point about this proliferation of blockchains. I was actually just talking to someone. I called it a Cambrian Explosion of blockchains and stablecoins. In technological innovation, it is very common to have this fan out of solutions in the early days of adoption. We are still in the early days of blockchain adoption. As adoption progresses, the winning applications crown the winning technologies. There is a natural whittling down process of technologies through attrition, consolidation, et cetera. We believe that public blockchains have a fundamental advantage since they enable broader market participation, t he traction of our Democratized Prime efforts supports that view. We also believe that our market position as the leader in real-world assets—reminder, we have about $18 billion+ of assets growing fast with over $65 billion in transactions. These are all available on the Provenance Explorer. That will be crowned because of that traction as one of the winners. I don't think that the world is going to ever get to a single blockchain. There will be a few blockchains, and the interconnection technology will make things interoperable. Technology diversity will actually become less of a problem. If you look at Figure, we recently announced, for example, our SUI announcement where our Yields stablecoin is now available in that ecosystem. We're bringing liquidity from those other blockchains to the assets on the Figure platform, where we have such a market leadership position, excuse me, in RWA, I think people are very interested and eager to invest in our assets. You'll see more and more technology that allows us to go towards those pools of liquidity and bring them on to our blockchain, making these things interoperable. I think a phase of technological breakthrough, you know, they're typically almost always followed by a much longer phase of incremental innovation that cumulatively does have as much impact on progress as the breakthrough phase. If you think about it, about ATM networks, say, in the 1980s and early 1990s, there was a bunch of these, Cirrus Plus, MAC. My dad would have had to look for a logo prior to using his ATM card to make sure. Nobody worries about that anymore, right? This is what's going to happen to blockchain. I tend to view the interoperability challenges more like a nuisance than a major roadblock to somebody like Figure executing this vision we have for the capital markets. Excellent. OK, with that, we're about out of time here. Thank you so much, Michael and Macrina. We really appreciate your time. I look forward to talking to you on the earnings call in just a few weeks. Thank you, James. We really appreciate the opportunity.