Huma Finance: Powering the Future of On-Chain Credit
Huma Finance is reshaping the financial landscape with its PayFi (Payment Financing) network — a decentralized platform that allows borrowers to leverage real-world income streams as collateral for blockchain-based credit. Unlike conventional crypto lending that often requires heavy overcollateralization, Huma supports loans backed by steady, predictable earnings such as salaries, invoices, subscriptions, and remittances. This opens the door to uncollateralized lending for individuals and businesses with reliable income but limited crypto assets.
Key Innovations
Income-Based Lending: Employs a Time-Value-of-Money (TVM) model to calculate the present value of future income, enabling borrowers to access 70–90% of projected revenue upfront via automated smart contracts.
Cash-Flow Analysis Engine: Continuously evaluates income trends, repayment capacity, and risk to customize loan offers and match borrowers with the best liquidity providers.
Tokenized Real-World Assets (RWAs): Turns income streams into blockchain tokens, merging real economic value with the transparency and security of DeFi.
Three-Tier Modular Architecture
1. Transaction Layer – Operates on Solana for near-instant settlements.
2. Currency Layer – Utilizes stablecoins like USDC to reduce currency volatility.
3. Financing Layer – Enables businesses to access decentralized liquidity pools using verified on-chain credit credentials.
Recent Achievements
In September 2024, Huma Finance raised $38 million in a round led by Distributed Global, with participation from Hashkey Capital, Folius Ventures, Stellar Development Foundation, and TIBAS Ventures. The raise included $10 million in equity and $28 million in yield-generating RWAs on the platform. The funds will drive PayFi’s expansion to more blockchain ecosystems, including Solana and Stellar’s Soroban network, with an ambitious goal to process $10 billion in payment-financing transactions over the next year.
