Huma Finance announces Project Flywheel on Solana, with Looping, Reserve, and Vault on sustainable PayFi expansion, which launches in Q-4 2025.Huma Finance announces Project Flywheel on Solana, with Looping, Reserve, and Vault on sustainable PayFi expansion, which launches in Q-4 2025.

Huma Finance Announces Project Flywheel – PayFi Game-Changer Aiming to Revolutionize the Solana DeFi

2025/10/09 13:20
Blockchain Main Pink

At the PayFi Summit in Singapore, Huma Finance announced Project Flywheel, an all-encompassing initiative expected in Q4 of 2025 that has the potential to revolutionize Solana DeFi. This is not a single protocol launch, it is a carefully designed system that incorporates three interconnected mechanisms to form what the team refers to as a “self-reinforcing growth loop”. 

With Solana establishing itself as the world’s leading blockchain for real-world asset integration and payment infrastructure, Project Flywheel emerges at a rapid pace in the PayFi story.

Looping – Investing in Multiple Returns Without Conventional Risk

The conceptual base of the Project Flywheel is Looping, a yield amplification strategy that utilizes the distinctive features of PayFi assets. Compared to the classical DeFi looping schemes, which use volatile assets, Huma uses the PayFi Strategy Token ($PST), which offers stable, predictable returns that regularly exceed the standard rates of DeFi borrowing.

Depositing $PST as security allows users to borrow stablecoins at the 80% loan-to-value ratio with an approximate 19% stable APY and prizes of 15% tokens, and higher leverage of 90% LTV with 31.5% stable APY and 30% rewards. 

The constant yield premium and low volatility enable users to maintain positive net yields while minimizing liquidation risks, in stark contrast to the anxiety-inducing leverage plays that have characterized much of DeFi’s history.

PayFi Reserve – Boosting Institutional Confidence

Even though Looping aims to maximize returns, the Huma PayFi Reserve handles the conventional drawback of DeFi. This is an advanced backstop mechanism that exploits the proof-of-stake structure of Solana in a new way, through the HumaSOL staked SOL in the Huma platform to get protection against the liquidation risk and reward investors with some premium yield.

It is a double-purpose format that allocates staked capital to secure PayFi assets enhancing efficiency in capital and preserving network integrity. To institutional investors who have been sitting on the sidelines of DeFi, the Reserve offers the diversification of risk and reliability that institutional capital allocators need, potentially filling the gap that exists between the innovation of DeFi and the risk aversion of traditional finance.

Huma Vault – Complexity Automation and Token Demand

The third component automates the optimization of yield, which establishes a direct relationship between the growth of ecosystems and token economics. Currently, only approximately 20% of investors actively wager three times their $PST holdings in $HUMA tokens to boost their payouts. Vault automates the entire process, reducing the obstacles to a smart yield farming.

If 1B $PST was deposited in the Vault, it would lock up 3B $HUMA tokens, or nearly 30% of the total amount. Additionally, a significant portion of Vault’s revenue will go towards $HUMA buybacks, resulting in consistent demand that grows with ecosystem adoption. This creates a virtuous cycle in which Looping generates yield, the Reserve allows for greater leverage due to increased security, and the Vault transforms activity into long-term token demand.

Conclusion

Project Flywheel is a speculative effort to address key issues that do not allow institutional capital to enter decentralized finance. Huma Finance has already shown a great momentum in that it has enabled more than $2.3B of credit through its credit products. The previous release of the protocol 2.0 introduced composable real yield to the users of DeFi, and this expansion is based on this.

The difference between Project Flywheel and other projects is that Huma has had a track record and has the strategic support of big investors such as Distributed Global and Hashkey Capital. It is a possible road map of protocols that aim to achieve longevity as well as a sense of scale in an industry that is usually dominated by short-term thinking.

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2025/10/29 02:25