PayFi: How Huma Finance Bridges the Gap Between DeFi and the Real Economy?
Although the total locked value in DeFi has surpassed $100 billion, most protocols are still designed around cryptocurrencies and are disconnected from real economic needs. The PayFi network proposed by Huma Finance (HUMA) aims to change this situation by combining payments with financing, allowing on-chain credit to serve daily scenarios such as wages and invoices.
Traditional DeFi lending relies on collateral (such as ETH, BTC), whereas Huma allows users to use future income as repayment assurance.
For example, a freelancer can pledge their next platform income to borrow money for urgent bills, or a business can access operating funds in advance based on accounts receivable. This model is closer to traditional commercial paper financing but automates execution through smart contracts, reducing default risk and operational costs.
Huma's challenge lies in how to balance decentralization with compliance. Future income involves legal constraints (such as wage withholding) and may require some KYC processes. However, if successfully implemented, PayFi will be the key for DeFi to 'break out'—enabling blockchain technology to truly empower the real economy.
