PayFi: An Emerging Financial Concept in the Solana Ecosystem

PayFi is an emerging financial concept in the Solana ecosystem, aimed at realizing the original vision of Bitcoin payments. It differs from traditional DeFi and instead creates new financial primitives around the time value of money.

PayFi's Vision

The goal of PayFi is to establish a programmable currency system within an open financial system, providing users with economic sovereignty and self-custody capabilities. Programmable currency is not only used for traditional transaction payments but can also automatically execute complex financial operations based on preset rules.

Unlike DeFi, PayFi aims to create products centered around goods and services, belonging to the physical asset ( RWA ) track.

Core Concepts of PayFi

The core of PayFi lies in fully utilizing the "time value of money". The following three examples illustrate the application scenarios of PayFi:

1. Buy Now Pay Never: Users deposit funds into DeFi products to earn interest, using the interest for payments, sacrificing cash flow while retaining principal.

2. Monetization for Creators: Helping creators to cash out future earnings immediately to improve cash flow.

3. Accounts Receivable Financing: Optimize traditional accounts receivable financing through blockchain technology to improve capital turnover speed and lower thresholds.

PayFi Project Case

1. Huma: A lending protocol for businesses and individuals that allows users to borrow against future income.

2. Arf: Provides licensed financial institutions with USDC-based operating credit lines to optimize cross-border payment processes.

3. Credix Finance: A B2B lending protocol primarily serving accounts receivable factoring and other businesses in the Latin American region.

4. NX Finance: A yield layer protocol on Solana that provides users with leveraged yield-bearing assets and points Farming strategies.

Summary

PayFi, as a sub-direction in the RWA track, is currently iterating mainly around two demands: accounts receivable factoring and cross-border payments. Although it is still in the early stages, it has shown a certain market demand. In the future, PayFi may create more innovative products around the time value of money and other attributes, and even improve the liquidity of physical assets, which is worth long-term attention from investors.