Huma Finance, a DeFi start-up, received $8.3 million in seed round financing

It is reported that Huma Finance, a DeFi start-up, obtained US $8.3 million in seed round financing to establish an income-supported loan agreement. Race Capital and Distributed Global jointly led the seed round financing. ParaFi, Circle Ventures and Robot Ventures participated in the investment.

Interpretation of this information:

Huma Finance, a decentralized finance (DeFi) start-up, has secured US $8.3 million in seed round funding to establish an income-supported loan agreement. The funding was led by Race Capital and Distributed Global, with participation from ParaFi, Circle Ventures, and Robot Ventures.

DeFi is a rapidly growing segment of the blockchain industry that aims to create a decentralized financial system that can operate without intermediaries such as banks. Huma Finance’s income-supported loan agreement is one such application of DeFi technology, which aims to provide loans to individuals who have limited or no credit history.

The income-supported loan agreement will rely on smart contract technology to facilitate lending and repayments. Smart contracts are self-executing computer programs that automatically enforce the terms of a contractual agreement. In this case, the smart contract will use data from various sources to determine an individual’s creditworthiness, and then offer a loan at a fixed interest rate.

The income-supported loan agreement will also incorporate a mechanism to provide financial assistance to borrowers who experience unexpected financial hardships, such as a job loss or a medical emergency. This mechanism, known as an income-share agreement, will allow borrowers to defer repayment of the loan until they are able to make payments again.

The $8.3 million in seed funding will enable Huma Finance to develop and launch its income-supported loan agreement. The funding will also allow the company to expand its team and infrastructure in order to scale its business. The company is planning to launch its platform in the fourth quarter of 2021.

In summary, Huma Finance has received US $8.3 million in seed round financing to establish an income-supported loan agreement using DeFi technology. The funding was led by Race Capital and Distributed Global, with participation from ParaFi, Circle Ventures, and Robot Ventures. The income-supported loan agreement will rely on smart contract technology and incorporate an income-share agreement mechanism to provide financial assistance to borrowers who experience unexpected financial hardships. Huma Finance plans to launch its platform in the fourth quarter of 2021.