Can wages be turned into liquidity in advance? Huma's PayFi Experiment
Many people have experienced the struggle at the end of the month: the salary is about to arrive, but the current rent, utilities, and daily expenses cause anxiety.
In traditional finance, salary advances or salary loans are often cumbersome, come with high interest rates, and carry significant privacy risks.
The PayFi model offered by Huma Finance completely changes the logic. It does not rely on 'hard collateral' but instead analyzes future cash flows (salary, invoices, remittances) to make these future incomes a new form of collateral. Smart contracts will directly provide users with 70-90% of expected liquidity based on risk assessment. In other words, receiving salary in advance is no longer a monopoly tool of banks but a type of on-chain inclusive service.
What's more interesting is that this is not just about 'borrowing money'; it empowers the time value of money (TVM). It discounts future income to the present, like a small 'blockchain discount machine', allowing ordinary users to utilize financial tools previously only available to businesses or institutions. Imagine, in the future Web3 wallet, besides balance and tokens, there will also be an additional column for 'future income balance'; this is where the real fun of PayFi lies.
