Everyone knows that for a long time, primary market financing for cryptocurrency projects has been a hellish difficulty, and many primary funds have entered a tourism holiday mode. Don't ask, it's been a long time since they last invested 😂。 But a few days ago, when screening the project, I saw that Huma had previously raised $38M. You should know that this financing amount even exceeds the FDV of many new projects on BN (yes, referring to your TUT). So driven by curiosity, I took a look at what this project mainly does and why it integrates so much? In fact, Huma specializes in PayFi, which is payment financing. Its subsidiary Arf focuses on cross-border payment liquidity solutions. Many friends are both familiar and unfamiliar with this track, and what they are familiar with is that this word is frequently mentioned; Strangely, PayFi is essentially to B, so ordinary C-end users may not perceive it clearly. Many people's first reaction is the white paper on Bitcoin, and Satoshi Nakamoto's chosen perspective is a peer-to-peer payment network. Simple and straightforward, solving all payment problems. Since there is Bitcoin, why do we need other cross-border payments? A recently accepted viewpoint is that the line between two points is the shortest, but the curve between two points may be the fastest. Although Bitcoin may truly become a world currency in the future, in the current situation of 2025, the first step is to make merchants accept it. In a standard cross-border payment process, taking a Hong Kong user who wants to purchase goods from Japan as an example: The user's demand is to pay in Hong Kong dollars; And the demand of merchants is to accept Japanese yen. So, a challenge in cross-border payments is that traditional SWIFT wire transfer based processing of cross-border payments is indeed relatively slow. Moreover, it always habitually sacrifices the interests of merchants. After Hong Kong users make payment, Japanese merchants may not receive the money (waiting for several days), but customers are like gods, so merchants need to prepare for shipment immediately. So, although users may not find cross-border payments very painful, merchants are indeed very troubled. Every trader is eager to receive immediate payment to increase turnover and expand their scale, which is a demand engraved in the genes of capital. So, how does traditional blockchain cross-border payment solve this problem? For example, Ripple adopts a relatively simple and crude strategy, and the working principle of its Ripple Net is as follows: User pays in Hong Kong dollars MM/gateway receives HKD market price to buy XRP XRP transfer to another MM Another MM sold XRP at market price in Japanese yen MM/gateway pays Japanese yen to merchants In fact, the above steps 1-5 are all very fast and can be completed within a few minutes, so Ripple has achieved real-time settlement across currencies in 10 minutes. This is real-time settlement, which is why Ripple's Token economy is a mess (as we discussed before), yet it is still able to achieve ultra-high trading volume on various exchanges around the world, becoming a popular choice among them. However, the Ripple solution can only be considered as 1.0. Its flaw is that although XRP has good liquidity, ultimately XRP is still a volatile currency, and both payment companies and merchants do not speculate on the currency and are unwilling to bear the price fluctuations. And in terms of liquidity, it may be good for the US dollar, but not as good as imagined for other currencies. If this Hong Kong user only buys goods worth HKD 1000, it doesn't matter, but what if this user wants to buy goods worth HKD 1M? Ripple's MM/gateway may not have that much liquidity. Due to these two limitations, Ripple's actual business and profits are not significant, and the company's main revenue comes from selling coins. Seeing this, you may wonder why not use USDC as an intermediary? The stability and liquidity of stablecoins are clearly better than XRP. That's right, this is the 2.0 solution proposed by @ humafinance Huma. Ripple is relatively closed, and it settles online using XPR coins; And Huma is more open, using stablecoins (such as USDC) to settle on public blockchains (such as Solana or Stella). Obviously, this 2.0 solution needs to be more open and have higher usability. Especially since Huma uses USDC, obtaining financing from Circle is a strategic endorsement. Taking Huma and Arf as examples, let me show you how this 2.0 solution completes cross-border payments? The following image shows Huma's pool on Solana. It first established a large liquidity pool, attracting LP through 10.5% interest and points. This pool is a credit pool that provides payment service providers with bridge loans similar to 'accounts receivable'. If the user uses traditional payment methods, then the pool first sends USDC to MM, who immediately settles it into local currency to the payment service provider, which is equivalent to placing a short-term bridge loan on the payment service provider. Then the payment service provider can immediately make the payment to the merchant. The general process is: User (HKD) → Payment Service Provider (HKD) → Huma (HKD USD JPY) → Payment Service Provider (JPY) → Merchant (JPY) This no longer occupies merchant funds, and merchants are willing to pay some costs. Each loan charges a few basis points of interest, which adds up to a considerable annualized amount due to the high turnover rate. So the interest rate of the previous pool can reach over 10%, and there is also a point subsidy. The open framework is not only reflected in the use of USDC and more public chains, but also in its willingness to share profits with encrypted users, which Ripple does not differentiate. The previous installments launched by Huma have all reached their limit. What sets this new installment apart from previous ones is that it does not require KYC or lock up, and has added the Maxi mode. You can keep an eye on it. So, a good plan may not necessarily be the most direct; But a good solution must have the best compatibility. There are many solutions for cross-border payments nowadays, far from blockchain. However, Huma adopts an open architecture, so compatibility performance is the best, and the smallest changes can make merchants accept them with the least resistance. Currently, as a latecomer, Huma's on chain revenue has exceeded 3 billion US dollars within a year, with a good growth rate. To be honest, convincing most merchants to accept direct payments in BTC and USDC is a lengthy process (with the shortest straight line); If you want to persuade a payment service provider to accept a blockchain middleware, it will still receive fiat currency, and it will be faster with the highest acceptance rate (the fastest curve). Merchants who have tasted the sweetness are more likely to directly accept BTC someday in the future. This may also be the reason why institutions are willing to bet on PayFi. Finally, returning to investment institutions, 38M financing, of which 28M is the investment amount. These institutions are all very good, with strong leadership in Distributed Global, one of the earliest institutions to bet on Solana. Some of their portfolios are as follows: In addition, there are institutions in the car such as Folius, Hashkey, ParaFi, and so on. Especially Folius, which is low-key and powerful, has accurately targeted Sleepless AI, MyShell, Catizen, and others 😂 Everyone understands. In addition, the open framework has its advantages, as it also attracts 10M RWA investment from the Stellar Coin Foundation (equivalent to investing in TVL), which is indeed the most knowledgeable about Ripple in Stellar Coin. Also, as mentioned earlier, Circle's CEO has explicitly stated their expectation to increase the use of USDC through this project; And Lily, the chairman of Solana Foundation, is also an investor, of course Solana also covets the use case of Ripple network. Unite all that can be united - this is the eternal advantage of open frameworks.