Huma Finance is revolutionizing the financial landscape with its innovative PayFi (Payment Financing) network, a decentralized protocol that enables real-world income streams to serve as collateral for on-chain credit. Unlike traditional crypto-backed lending, which often requires overcollateralization, Huma flips the model by allowing users to borrow against future cash flows such as salaries, invoices, subscription payments, or remittances. This approach opens the doors to uncollateralized lending, making credit accessible to individuals and businesses that may not have large crypto reserves but have predictable and provable cash flows .

Key Features of Huma Finance

Income-Based Lending: Utilizes the Time-Value-of-Money (TVM) model to calculate the present value of future earnings, enabling users to access 70–90% of expected future revenue upfront through smart contracts.

Cash-Flow Analysis Engine: Evaluates borrowers' income patterns, repayment ability, and risk profile in real time, ensuring personalized loan offers and matching borrowers with the most suitable liquidity providers .

Tokenized Real-World Assets (RWAs): Integrates RWAs into DeFi by tokenizing income streams, creating secure, transparent collateral that merges tangible economic value with blockchain's efficiency .

Modular Blockchain Protocol: Operates on a three-layer blockchain protocol:

1. Transaction Layer: Built on Solana’s high-performance network for instant settlement.

2. Currency Layer: Integrates stablecoins such as USDC to reduce foreign exchange volatility risk.

3. Financing Layer: Allows businesses to obtain immediate liquidity from decentralized capital pools using on-chain credit credentials .

Recent Developments

In September 2024, Huma Finance raised $38 million in a funding round led by Distributed Global, with participation from Hashkey Capital, Folius Ventures, the Stellar Development Foundation, and TIBAS Ventures. The funding includes $10 million in equity investment and $28 million in yield-bearing RWAs on the platform. This capital will enable Huma to expand its PayFi platform to new blockchain ecosystems, including Solana and Stellar’s Soroban smart-contract network, and process $10 billion in payments-financing transactions next year .

Conclusion

Huma Finance is at the forefront of integrating real-world income streams into the decentralized finance ecosystem. By leveraging blockchain technology and innovative credit assessment models, Huma successfully bridges the gap between traditional finance and DeFi, offering inclusive access to undercollateralized loans and frictionless global transactions .

@Huma Finance 🟣 #HumaFinance $HUMA

For more information, visit huma.finance.