In today's highly volatile cryptocurrency market, we are often attracted to those who claim to bring hundredfold returns through MEME coins or Layer 2 solutions. However, today I want to discuss an innovative project that could fundamentally change our perception of "money" — Huma Finance.
This project introduces a brand new concept: income collateralized loans. At first glance, this concept may seem confusing. In the traditional DeFi world, we are accustomed to the over-collateralization model, such as using $150 worth of ETH to borrow $100 in stablecoins. However, Huma Finance is attempting to break this boundary by transforming collateral from "existing assets" to "future cash flows."
This model is reminiscent of the "play now, pay later" model in the gaming industry. Players can experience the game first and then pay based on the duration and activity level in the game. Huma Finance essentially brings this credit model into the financial sector of the real economy.
Let's understand this innovation with a simple example. Suppose you are an excellent freelance designer who just received a big order worth $100,000. However, the client's payment cycle is 90 days. During these three months, you may need funds to cover various expenses. The traditional financial system may not be able to provide you with the necessary loans because you do not have enough collateral.
The model of Huma Finance allows you to use this contract as "collateral" to obtain a loan. This not only addresses your urgent needs but also helps you seize more business opportunities and achieve further development in your career.
This model is not only applicable to individuals but also greatly benefits startups and small businesses. It provides a new financing channel for entrepreneurs who have potential but currently lack funds, with the hope of promoting the development of the entire innovation ecosystem.
Of course, this model also faces challenges. How to accurately assess the reliability of future income? How to prevent fraud risks? These are key issues that Huma Finance needs to address.
Nevertheless, this new financial model represented by Huma Finance undoubtedly brings new possibilities to the DeFi space. It not only makes DeFi more "human-centric", but also has the potential to provide financial services to a broader user base, promoting the development of financial inclusion.
As a crossroads of blockchain and finance, the development of Huma Finance is worth our continued attention. It may become an important bridge connecting traditional finance and decentralized finance, bringing new growth momentum to the entire industry.
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In today's highly volatile cryptocurrency market, we are often attracted to those who claim to bring hundredfold returns through MEME coins or Layer 2 solutions. However, today I want to discuss an innovative project that could fundamentally change our perception of "money" — Huma Finance.
This project introduces a brand new concept: income collateralized loans. At first glance, this concept may seem confusing. In the traditional DeFi world, we are accustomed to the over-collateralization model, such as using $150 worth of ETH to borrow $100 in stablecoins. However, Huma Finance is attempting to break this boundary by transforming collateral from "existing assets" to "future cash flows."
This model is reminiscent of the "play now, pay later" model in the gaming industry. Players can experience the game first and then pay based on the duration and activity level in the game. Huma Finance essentially brings this credit model into the financial sector of the real economy.
Let's understand this innovation with a simple example. Suppose you are an excellent freelance designer who just received a big order worth $100,000. However, the client's payment cycle is 90 days. During these three months, you may need funds to cover various expenses. The traditional financial system may not be able to provide you with the necessary loans because you do not have enough collateral.
The model of Huma Finance allows you to use this contract as "collateral" to obtain a loan. This not only addresses your urgent needs but also helps you seize more business opportunities and achieve further development in your career.
This model is not only applicable to individuals but also greatly benefits startups and small businesses. It provides a new financing channel for entrepreneurs who have potential but currently lack funds, with the hope of promoting the development of the entire innovation ecosystem.
Of course, this model also faces challenges. How to accurately assess the reliability of future income? How to prevent fraud risks? These are key issues that Huma Finance needs to address.
Nevertheless, this new financial model represented by Huma Finance undoubtedly brings new possibilities to the DeFi space. It not only makes DeFi more "human-centric", but also has the potential to provide financial services to a broader user base, promoting the development of financial inclusion.
As a crossroads of blockchain and finance, the development of Huma Finance is worth our continued attention. It may become an important bridge connecting traditional finance and decentralized finance, bringing new growth momentum to the entire industry.