Huma Finance is pioneering a new era in global payments through its innovative Payment Financing (PayFi) network. By integrating blockchain technology with real-world assets (RWAs), Huma aims to provide instant, low-cost, and borderless financial solutions.
What Is Huma Finance?
Founded in 2022 and headquartered in San Francisco, Huma Finance is the first PayFi network. This platform enables global payment institutions to settle transactions 24/7 using stablecoins and on-chain liquidity. Unlike traditional decentralized finance (DeFi) systems that rely heavily on over-collateralization, Huma focuses on income-backed lending, aiming to make financial services more accessible to a broader audience.
Recent Funding and Expansion
In September 2024, Huma Finance raised $38 million in a funding round led by Distributed Global, with significant participation from Hashkey Capital, Folius Ventures, the Stellar Development Foundation, and TIBAS Ventures, the corporate venture capital arm of Turkey's İşbank. Part of this funding was invested into high-yield RWAs on the platform. This capital infusion supports Huma's expansion plans, including launching its PayFi network on blockchains like Solana and Stellar's Soroban smart-contract network. The company aims to process $10 billion in payment financing transactions by the end of 2025.
How It Works
Huma Finance offers two primary lending models:
Huma Institutional: A permissioned service tailored for institutional investors, requiring Know Your Customer (KYC) and Know Your Business (KYB) approvals. It allows institutions to lend capital into specific Huma-operated pools, such as the Arf pool on Solana for cross-border payment financing.
Huma 2.0 (Permissionless): A permissionless service designed for retail investors, enabling them to lend capital to a vault managed by a strategy manager. This vault allocates capital across a combination of Huma-operated pools and decentralized finance (DeFi) protocols like Kamino, Aave, and Pendle.
The platform's use of RWAs allows for faster settlement times and a broader range of collateral options, facilitating more efficient and inclusive financial services.
Real-World Impact
Huma's integration of RWAs into DeFi through tokenization represents a significant innovation in the financial sector. By converting income streams and receivables into digital assets, Huma enables secure, transparent, and efficient lending and borrowing. This approach not only enhances liquidity but also democratizes access to financial services, particularly for underserved populations.
