jakiro
4ALPHA Research Researcher: Stitch, CLORIS
Friends who often run the meeting should be impressed by the word “Payfi”. In fact, this is the essential theme of the chairman of Solana Foundation Lily Liu. This article will focus on the introduction of “Payfi” concept and related projects.Help readers keep up with Solana’s latest narrative
Note: Any project mentioned in this article is only used as a research understanding, and does not mean any recommendation
What is PayFi?
Lily liu said so:“Payfi’s motivation is to realize the initial vision of Bitcoin payment. Payfi is not DEFI, but to create new financial prices around the time value of currency”Essence
Payfi’s vision
The initial vision of the bitcoin payment referred to by Lily Liu is not a simple “point -to -point electronic financial system”, but “Program Money, Open Financial System, Digital Property Rights, Self Custody and Economic Sovereigny”, Payf I’s vision is to “An open financial system is established to establish a programmable currency system that can provide users with the ability of economic sovereignty and self -custody. “
The programmable currency refers to not only the traditional transaction payment, but also the digital currency of complex financial operations based on the preset rules. In factTherefore, Payfi is not DEFI, but because DEFI is still established is still products around finance and transactions, andPayfi is an attempt to create products around goods and services. Payfi strictly belongs to the RWA trackEssence
The time value of currency
When mentioning Payfi, Lily Liu always mentions three examples: “Buy Now Pay Never”, “Creator Monetization” and “Account Receivable”. Understanding these three examples can further understand Payfi.
1) Buy now pay never
Most people are already familiar with the Buy Now Pay Later, while the Buy Now Pay Never is almost completely opposite to installment payment.Instant payment is a kind of credit loan, which is exchanged for better cash flow by undertaking a certain interest cost.The Buy Now Pay Never is to deposit money into the DEFI product, and then pay the payment by lending, and then use interest to pay for the cash flow.
For example, when the user bought 5 knives of coffee, he saved 50 knives into the borrowing product to lock. When the interest was sufficient, 5 knives were paid, and the coffee was paid.If the rules are executed, the “programmable currency” mentioned earlier needs to be mentioned earlier.
2) Creator Monetization
This example assumes that many creators will encounter problems with difficult cash flow.Creation itself requires time and capital investment, but after the creation is completed, it is often not rewarded due to various reasons. Therefore, from the beginning of creation to the return, there will be a long time waiting for the payment.If the creator’s cash reserves are insufficient, there may be no way to continue creating during this time, and the time will be wasted.
In Lily Li’s idea, Payfi can help creators solve this problem. For exampleNow, by sacrificing a certain income for better cash flow.
3) Account Receivable accounts receivable
Accounts receivable are a very traditional concept, which is simply the money of customers owed the company.Due to the existence of account receivables, sometimes the company will fall into cash flow. In order to solve this problem, many accounts receivable financing companies have been derived.Let the enterprise get cash immediately, and then maintain a stable cash flow and continue to grow, not limited by the faster payment of customers.
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Payfi wants to further popularize and optimize this scene.Because although the above services have already existed in web2, the overall capital turnover still rely on the traditional payment system to lead to slow settlement. Therefore, if it can increase the settlement speed by blockchain, and popularize the service target of this supply chain finance.To reduce the threshold, it can improve the speed of funds in the entire real world.
The time value of currency and the potential of Payfi
In fact, the three cases above are all around a point:“Time value of currency”That is, due to the opportunity costs and interest rates, the current currency is more valuable than the currency of the same value in the future.What PayFi has to do is to help users/customers maximize the time value of currency. For example, Buy Now Pay Never is paid with the time value of the currency.Get the current money, closer to Buy Now Pay Later.
On the whole, Payfi is not a new concept. The problems it to be solved is that the traditional financial system already exists, and there are solutions, but this does not mean that Payfi has no value because traditional solutions are still not good enough.
Taking corporate financing as an example, accounts receivable belong to a way of corporate financing. In actual production, from the perspective of financial institutions, in order to meet the policy supervision and their own risk control requirements, it is also difficult to evaluate the mortgage assessment and implementation process.Simplified; on this basis, for many small and medium -sized enterprises, it is easy to make financing difficulties due to the complexity and tedious processes. It is even unwilling to make financing and cannot make full use of the time value of currency.
In the scenario of cross -border payment, the monetary value of time is more obvious, because cross -border payment depends on the long -term financial network of agent banks and SWIFT, but they cannot transfer funds in real -time transfer between different countries.And more and more customer system remittance companies can achieve the next day or settlement for them for them.So in order to meet the needs of customers and provide a certain time, these financial institutions must retain a certain amount of financial capital in various countries (just like Orbiter cross -chain between different bridges), which is a pre -financing account.According to a study made by ARF, more than $ 4 trillion in the world was locked in 2022Pre -financing accountAmong them, this is a waste of time value for financial institutions that waste huge currencies
Therefore, Payfi still has huge potential value to be discovered. Just as the tram is still a car, but the revolution of the car has been completed. Even if Payfi may be a new bottle of old wine, the core element is to observe whether it can via the blockchain through the blockchain.The means to optimize the original system, realize the user experience that the old system and technology stack cannot be obtained to achieve the revolution.
What are the projects worthy of attention in the PayFi field?
At present, there are not many projects that focus on the concept of “PayFi”. Payfi is still a very early concept. Next, it will focus on several Payfi -related projects to help readers further understand the progress of the Payfi track.
Huma
Huma is one of the hottest PayFi concept agreements. As of August 16, 2024, the platform has provided nearly $ 890 million in payment financing, and the default rate is 0%.
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Huma currently has two versions: V1 and V2. V1 is a borrowing agreement for enterprises and individuals. It allows users to use future income (RWA) as a mortgage agreement.The function of acquisition for account collection.
On Huma, there are currently many pools for different purposes and cooperation with different partners, but HUMA is still from the decentralized, no threshold, and unlimited financial products that are expected to have a certain distance from the blockchain vision.EssenceIn the process of trying to borrow funds from Huma or provide funds for Huma, the author found that he would encounter obstacles such as unable to find the entrance, KYC, and a certain threshold for use.
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ARF
ARF is a cross -border payment network project, which provides a licensed financial institution with unpaid, short -term, USDC -based operating funds credit quota, so that these institutions can be smoothCross -border payment.
For example, assuming that ARF’s European customers want to remit money to Africa partners, customers only need to remit funds into ARF’s local bank account, and ARF will convert USDC into local legal currencies for African cooperative currencies for them for them.Set up that day.After the transaction is completed, ARF customers can deposit funds into the ARF account through Wire, SWIFT and other methods. ARF will immediately convert these deposits into USDC to ensure that funds are available at any time.
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ARF completed a round of $ 13 million in seed round financing in 2022. So far, ARF’s service is still aimed at enterprises, and it is necessary to fill in the application form to become a customer.Just in April this year, ARF announced the merger with Huma, and the current HUMA platform is close to 900 million payment financing, and 70% come from ARF. The combination of the two may give full play to the liquidity advantage of ARF and HUMA’s platform advantage.
Credix finance
Credix is also a B2B credit protocol for the Solana ecology. Its product logic is very similar to Huma. On the Credix platform, there are specific types of investment pools. Institutions that have been certified by KYC can provide credit by adding liquidity to pools.The current Credix’s services are mainly concentrated in Latin America, such as account receivables.
Compared with HUMA, Credix’s requirements for investors will be higher, and the scope of business is narrower.Therefore, Credix’s loan so far has less loans than Huma and ARF.In addition, Credix also launched a function called Credipay, the “Buy Now Pay Later” service for the enterprise.
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Nx finance
The last thing to introduce is NX Finance. NX is the income layer protocol on Solana. It provides users with a lever or point Farming strategy for users to provide Solana ecological internal interest assets. The corresponding two types of strategies are called Fulcram Strategy on NX Finance, respectively.) And Gold Mining Strategy, NX Finance is still at a relatively early stage, and the platform TVL is around 14m.
Bullet strategy: This strategy allows users to add leverage for high -quality live assets (currently supports JLP). The lender obtains the interest rate of interest rates paid by the borrower by depositing USDC; the borrower needs high -quality assets (JLP) supported by the mortgage strategy.At the same time, NX Finance will use the borrowing part to purchase JLP to improve the positioning of JLP. That is to say, the borrower obtains not USDC, but the return on returns after JLP is lever.
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Strictly speaking, NX Finance is different from the above -mentioned projects, not a Payfi project, it is more like a Crypto Native borrowing agreement; but from a broader perspective, the loan agreement itself is the full use of the time value of the currency time.It is also an essential part of the Buy Now Pay Never. In the end, whether a project is Payfi depends on whether the service it provides will eventually involve the real production and consumer needs of customers, not a simple money for money for money.Financial leverage, to link and integrate these real chain needs require the project party to do a lot of work, such as applying for license.
Summarize
Overall, PayFi is still in an early stage. Many projects that claim to be PayFi have not yet been launched, but at present, Payfi is a subdivision of the RWA track.Two demands of account receivables and cross -border payment are iteration.
In addition, for the “openness” in the vision, Payfi is even more distanced, because most products of the projects are still strictly strictly restricted by KYC and user regional; but even so, we also see some PayFi projects, such as Huma, etc.There are already some data accumulation to indicate the existence of their product demand. As a track that is far away from users and exchange users from the chain, can Payfi create more innovative products around the time value of the currency and other attributes of the currency and other attributes of the currency., Even to accommodate more physical property categories, improve the liquidity of physical assets, etc. These issues are worthy of long -term attention from investors.
Reference
https://x.com/gizmothegizzer/status/1815787976225419745
https://blog.huma.finance/payfi-the-new-frontier–Rwa
https://medium.com/hashkey-capital-sights/rwa- tokenizized-PT-Market-opportunities-ON-Chain-Credit-Finance-3810 76772E6D
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