Huma Finance: The PayFi Pioneer in DeFi

Huma Finance is the world’s first decentralized payment finance (PayFi) protocol based on future income streams (such as salaries, invoices, and cross-border remittances). It bridges the gap between traditional finance and Decentralized Finance by tokenizing real-world receivables, allowing users to obtain on-chain credit without collateralizing crypto assets. By 2025, its cumulative on-chain transaction volume has surpassed $4.5 billion, with active liquidity funds exceeding $100 million, providing participants with an annual real yield of up to 10.5%.

Core Mechanism: How to Achieve Unsecured On-Chain Credit?

1. Asset Tokenization and Instant Financing: Enterprises or individuals can upload future receivables such as invoices and pay stubs to the blockchain. After risk control verification, they can deduct a fee and instantly obtain liquidity in stablecoins like USDC or USDT. For example, a company with a $100,000 unsettled invoice can immediately receive $95,000 in on-chain funds.

2. Liquidity Pools and Sources of Income: Investors inject stablecoins into the fund pool, acting as liquidity providers (LPs). Their income comes from two aspects:

   • Stablecoin interest: the fees paid by borrowers;
   • HUMA token rewards: Protocol incentivizes LP with additional earnings, with an annualized rate of over 10.5%.
3. Deflationary token model: 50% of the borrower’s fees are used to repurchase and burn HUMA tokens, continuously reducing the circulating supply as the protocol scales to support the token’s value.

Token Economics: Allocation and Use of HUMA

Total Supply and Distribution: The total supply of HUMA is 10 billion tokens, with an initial circulation of 1.73 billion tokens (approximately 17.3%). The main allocations include:

• Liquidity Incentives (31%)
• Investors (20.6%, 12 months lock-up + 3 years linear vesting)
• Team and Advisors (19.3%)

Core functions:

• Governance Voting: Token holders participate in protocol parameter adjustments and upgrade decisions;
• Liquidity Incentives: Rewards for LPs and ecosystem contributors;
• Fee capture: Future plans to share protocol revenue through staking.

Participation method: Join the Huma ecosystem in four steps

1. Purchase HUMA on Exchanges: Buy directly on mainstream trading platforms such as Gate.
2. Provide liquidity to earn points: Locking funds in the dApp can earn you “Feather” loyalty points, which can be used to increase HUMA reward multipliers (up to 7 times).
3. Participate in governance and airdrops: Holders participate in voting through staking and pay attention to official airdrop plans (such as the second season airdrop based on “feather” points).

Why has Huma become a leader in the PayFi sector?

1. Real asset backing: Compared to traditional Decentralized Finance credit protocols (such as TrueFi), all loans are secured by real assets such as invoices, resulting in lower default risk.
2. Balancing Compliance and Efficiency: Integrating KYC/AML mechanisms to meet regulatory requirements, while relying on Solana The network achieves settlement in seconds, speeding up more than 90% compared to traditional systems like SWIFT.
3. Institutional endorsement: Received strategic investments from the Solana Foundation, Circle, Stellar Development Foundation, and others, with total financing exceeding 40 million USD, providing a guarantee for the protocol’s security.

Risk Warning: Key Considerations Before Investing

• Off-chain dependency risk: The authenticity of accounts receivable relies on off-chain data verification, which may result in information asymmetry.
• Smart contract vulnerabilities: Despite audits by Halborn and Certora, there are still potential attack risks.
• Regulatory uncertainty: The regulatory policies of various countries regarding Decentralized Finance and stablecoins may affect the expansion of protocols.

Conclusion: A New Paradigm of Inclusive Finance

Huma Finance is creating credit and yield channels for SMEs, freelancers, and investors by bringing $250 trillion worth of global trade finance assets on-chain, eliminating the need for traditional bank intermediaries. Its deflationary model combined with real yields injects a sustainable core into Decentralized Finance. With the governance function going live in 2025 and multi-chain expansion (Stellar, Ethereum L2), participating in the HUMA ecosystem is not just an investment opportunity but also a force driving the democratization of global payments.