Request and Huma to make web3 invoice factoring a reality
Alexandru Stoicescu
Jun 13, 2022
3 min.
Hey Request community,
At Request, we started with a vision to become the backbone of world trade and create an ecosystem of decentralized financial services. Today the Request Foundation is excited to announce that it has invested in Huma Finance, an income backed DeFi protocol, that enables the first web3 invoice factoring experience.
Huma Finance is a project born from ETH Denver 2022 where it won a flurry of prizes and subsequently raised a large seed round from notable web3 VCs including ParaFi, Circle Ventures, Race Capital, Distributed Global amongst others.
By using Huma Finance’s platform, anyone will be able to factor their Request on-chain invoices and receive up-front financing right away. Payment requests on the Request protocol are immutable and securely stored on the blockchain, but to allow transferability of the requests to a finance provider like Huma Finance, the protocol has been upgraded to allow for a RequestNFT.
A RequestNFT, built under the ERC721 standard, is a receivable credit primitive, designed to be a tradable cashflow. In this case, if Alice issues an invoice to Bob with a credit period of 90 days, Alice would mint a RequestNFT and sell it to Huma for immediate financing. As the new owner of the RequestNFT, Huma becomes the recipient of the payment from Bob.
In order to assess the credit worthiness of the payer and the payee, Huma’s underlying protocol looks at a variety of on-chain signals. Using data models, the protocol is able to quantify credit risk and determine factoring terms in real time without hoarding data or relinquish control to a centralized authority. (Check out their whitepaper to learn more)
Erbil Karaman, co-founder at Huma Finance, shared his thoughts:
“Due to its simple design and active community, we believe Request Network has the potential to become so much more than just a payment network. By enabling invoice factoring/financing natively, we hope to demonstrate the strength of utilizing on-chain payments as tradable receivables” – Erbil Karaman, co-founder & CEO at Huma Finance
In line with their upcoming beta launch, Huma is currently whitelisting invoice issuer with payer profiles such as DAOs and web3 organizations with regular on-chain payment commitments. As a beta client, you shall be factoring your invoices to Huma and receive upfront 80% financing, with the remaining invoice funds paid to you automatically as soon the invoice is paid.
For Request, this investment and partnership with Huma substantially widens the footprint and capabilities of the Request Protocol for decentralized trade. With more than $263million worth of on-chain invoices processed on the protocol, we communicated in October 2022 that invoice factoring is the prime use case for building a network other than just paying and getting paid in crypto.
Under a RequestNFT, Request seeks to expand accessibility to credit for anyone with no geographic confines and empower us to prise power away from actors in traditional finance.
“Our mission at Request is to bring interoperability to invoicing and have apps interact with each other in a permissionless way. For example, a user could issue an invoice in Request Finance and secure immediate financing through Huma. That’s why we are excited to be working with Huma Finance, and it brings closer to our vision of building an ecosystem of open financial apps. This financing use case is a first step towards the enablement of a decentralized and P2P invoice financing machine” – Christophe Lassuyt, President at Request Foundation
We hope you will join us on this journey as we keep on buidling.
About Huma Finance
Huma Finance’s mission is to allow any participant to use their income to obtain financing in a decentralized way.
By creating a credit line for every wallet, Huma Finance is building the next generation decentralized risk and lending solutions backed by income and receivables.
Website | Whitepaper | Twitter | Discord | Github
