At PayFi Summit Singapore, Project Flywheel was unveiled.
A synergetic suite of capabilities that gives Huma and the PayFi ecosystem advantages that others simply can’t match.
It starts with Looping, scales with Reserve, and aligns with Vault.
Looping is one of the most powerful DeFi innovations that TradFi has a hard time to match. PayFi’s yield premium and consistency makes it a perfect use case to showcase this innovation.
By depositing $PST as collateral, borrowing stablecoins, and reinvesting, participants can amplify returns.
$PST has proven itself as a low-risk, sustainable high-yield asset. DeFi borrowing rates fluctuate. Looping volatile assets can result in negative outcomes. With an asset like $PST that consistently beats DeFi’s stablecoin borrowing rate, you enable positive net yield looping. That’s why $PST’s stability matters as much as its yield premium.
Using today’s USDC borrowing cost of 6.5% and a conservative scenario with 80% LTV (Loan to Value) returns of 19% stable APY + 15% token rewards can be enabled.
If the LTV were 90%, the returns would compound to 31.5% stable APY + 30% token rewards.
However, higher LTV means higher risk. A meaningful change in $PST’s value can cause liquidations and create systemic risk. You can say that’s part of investing. We say we can do better.
Huma PayFi Reserve
With capital efficiency unlocked, we turn to resilience.
In PoS systems like Solana, staking is designed to secure the network by making attacks economically expensive. Today about 70% of circulating SOL is staked, representing tens of billions of dollars of economic weight securing consensus. Once the cost of attacking the network becomes prohibitively high, adding more stake provides diminishing marginal security benefits. Yet it continues to dilute token value through inflation. What if we could use some of that staking power to secure not just the network, but the assets on the network, enabling institutional-grade scale.
The most liquid asset on Solana is SOL, meaning that the most effective way to protect PayFi and RWA assets against liquidations is by utilizing SOL.
Huma PayFi Reserve acts as a Solana-native backstop, protecting against unlikely but catastrophic risks, while putting validator assets to productive use. Depositing HumaSOL in the Huma Reserve captures a portion of the premium yield, providing economic incentives to build up the reserve.
It’s both a safety net and critical infrastructure for all PayFi and RWA assets in the Solana ecosystem, enabling scale through confidence. With the support of a reserve, institutional adoption of PayFi on Solana will accelerate.
Huma Vault
The Vault bridges protocol growth and token demand.
Due to the way $HUMA rewards are distributed, holders of $PST maximize their yield when they hold 3x of $PST in staked $HUMA. Today, only ~20% of $PST holders participate in this strategy. With looping enabled, it becomes harder to follow this strategy for each individual $PST holder.
The Huma Vault automates this powerful strategy by drawing in $HUMA supply through economic incentives. The vault also enables looping to provide better returns to all $PST holders.
This can have a very meaningful impact. 1B of $PST in the vault would mean 3B of $HUMA, 30% of total token supply, is also locked in the vault.
Plus, a portion of Vault income goes to $HUMA buybacks, directly linking ecosystem expansion to token demand.
Looping amplifies yield → Reserve supports higher leverage → Vault drives token demand
…and together, they form a self-reinforcing growth loop.
PayFi hands us the wheel. Now it's our turn to fly.
— Huma Foundation
Disclaimer:
$HUMA is a utility and governance token intended solely for use within the Huma ecosystem. This document is provided for informational purposes only and does not constitute an offer to sell, solicitation to buy, or financial, legal, or investment advice. Participation in the Huma protocol and any interaction with the $HUMA token involves risk and should be undertaken only after careful consideration. Regulatory frameworks governing digital assets vary by jurisdiction and are subject to change. You are solely responsible for ensuring compliance with all applicable laws and regulations in your region. Always conduct your independent research and consult with qualified professionals before making any financial or investment decisions.