4 trillion dollars of dormant capital awakens! How does Huma Finance PayFi Stack achieve this?
Deep within the traditional financial system lies a dormant giant of prepaid capital worth up to 4 trillion dollars, locked away by trade contracts and long payment terms. When small and medium-sized enterprises urgently need cash flow, they often hit a wall. Now, Huma Finance is making a strong entry with PayFi Stack, partnering with Solana, Stellar, and Circle in July 2024, determined to awaken this 'giant'.
PayFi Stack adopts a 'layered unlocking' strategy, with each layer working closely together. The financing layer serves as the key, converting prepaid vouchers into on-chain tokens, allowing merchants to quickly exchange funds on DEX without having to wait for buyers to pay; the transaction layer acts like a 'conveyor belt', utilizing the high performance of Solana and Stellar to achieve instant transfers; the compliance layer acts as a 'guarantor', ensuring that detailed information for each transaction is accurately recorded on-chain, allowing financial institutions to confidently provide lending services. Previously, factories faced tight cash flow after paying 30% of the advance payment; now, by tokenizing the advance payment through PayFi Stack, they can recover cash flow on the same day, significantly accelerating project timelines.
Tokens play the role of a 'switch' in the ecosystem; the more users there are, the smoother the capital flow in the financing layer, and the higher its value. It can not only serve as transaction fees but also allow holders to vote on the priority of unlocking capital in different industries. Currently, pilot programs have been launched in the trade finance sector, which is valued at 10 trillion dollars, with one foreign trade company using this to activate 5 million in advance payments, successfully adding two new orders.
Some may question whether this is an idealistic concept, but @Huma Finance 🟣 has provided a strong rebuttal with practical implementation. A certain cross-border e-commerce company used PayFi Stack to handle supplier payments, which previously took banks 3 days for review, but now they only need to confirm that the on-chain prepaid voucher is correct before they can immediately make payments. Furthermore, Huma Finance has simplified complex operations into three steps: 'Upload contract - Generate token - Exchange funds', making it easy for even business owners who are not familiar with blockchain technology to get started.
Huma Finance's goal is not to play small but to transform 4 trillion dollars of dormant capital into a powerful stream for economic development. PayFi Stack is the key pipeline guiding this flow, and $HUMA may just be the opportunity that opens the door for us to benefit first.
