Why is Huma Finance an important step towards inclusive finance in Web3?
The essence of finance is how to allocate resources more efficiently and fairly. However, in the traditional financial system, a large number of people are excluded from formal financial services due to a lack of collateral or credit scores. The emergence of Huma Finance provides new possibilities for these users.
Huma's mechanism allows 'income' to become a source of credit. In other words, users do not need to hold a large amount of crypto assets or high-value collateral; as long as they can prove that they have a continuous and verifiable income, they can obtain loans or other financial services on the blockchain. This is a new practice of inclusive finance in the Web3 era.
This model is particularly suitable for the gig economy, freelancers, and entrepreneurs in developing markets. In the past, they might have found it difficult to enter the banking system, but under the Huma protocol, their future income becomes their financial passport.
More importantly, Huma Finance executes all logic on-chain, greatly enhancing transparency and auditability. This allows users to have complete control over their funds while also increasing the trustworthiness of the entire system.
I believe that Huma Finance is not just a DeFi project, but an important milestone for Web3 on the path to inclusive finance and the real economy.
