Huma Finance: Loan Agreement Based on Future Income
Huma Finance is one of the pioneering projects to apply blockchain technology to provide flexible loan solutions based on future income. With over $46 million raised through two rounds of financing and a loan value approaching $1 billion, Huma stands out in the application of decentralized finance (DeFi) in real life.
1. What is Huma Finance?
Huma Finance is a decentralized loan protocol that allows individuals and businesses to borrow based on future income. Unlike traditional models that require collateral, Huma connects borrowers with investors on the blockchain, using flexible credit models such as:
- Revolving credit lines
- Credit lines secured by accounts receivable
- Factoring services
The protocol aims to bring real-world finance into DeFi by cryptographically securing accounts receivable, integrating risk management systems, and ensuring strict legal compliance.
2. Notable Features of Huma Finance
● Structured Finance
Huma allows the construction of deeply structured financial products, including:
- Diversified loan amounts
- Daily accruing returns
- Loss insurance for investors
● Asset Tokenization
Through legal models such as SPV (special purpose vehicle), Huma cryptographically secures actual accounts receivable as on-chain assets. This enables investors to transparently and efficiently track and trade real-world assets.
● High Transparency
The protocol provides a detailed overview of the lifecycle of on-chain accounts receivable, helping investors track loan performance in real time, from issuance to recovery.
3. Distinctive Differentiation Features
✅ Instant Liquidity
Huma offers fast loan solutions, helping borrowers access funds almost immediately through automated protocols.
✅ Modern Risk Management Mechanisms
Smart contracts play a role in monitoring and executing risk management policies, ensuring the protection of lenders' funds.
✅ Legal Compliance
Huma collaborates with licensed partners to conduct AML (anti-money laundering), KYC (know your customer), and thorough investor screening before providing funds.
✅ Customizable on Demand
Huma's modules can be flexibly configured to create products suitable for different types of borrowers—from freelancers to small and medium-sized enterprises.