How the EDX/YLDS Model Works
YLDS is an SEC-registered yield-bearing security issued by Figure Technology Solution and backed by its assets.
EDX/YLDS offering is positioned as a more efficient way to manage capital. EDX Markets institutional customers will be able to purchase YLDS either from FCC or on the secondary market, and use it as collateral across their trading and clearing operations, earning yield.
To build confidence in the new product, EDX Markets will add YLDS to its balance sheet as a treasury asset. “Exchange collateral was one of the first use cases we pointed to when we launched YLDS,” said Mike Cagney, Co-Founder and Executive Chairman of Figure.
Traditionally, institutional capital held as collateral sits idle, forcing a choice between liquidity and yield. The EDX/YLDS model aims to solve this.
“EDX integrating YLDS as collateral and a treasury asset is that thesis playing out in practice. Institutions shouldn’t have to choose between yield, liquidity and regulatory certainty, and with YLDS they don’t.”
What is Important to Know
YLDS is promoted as an SEC-registered security; however, that doesn’t mean the regulator approved it or provided guarantees. Moreover, the security is not FDIC insured and has no bank guarantee. Investors must be aware that it may lose value, reducing the value of the corresponding collateral.
The company did not provide details on the collateral's conditions. The information on the yield is not available.
EDX/YLDS integration is another example of using a tokenised instrument as working collateral in cryptocurrency market infrastructure, helping bridge the gap between traditional liquidity management and on-chain finance.
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