PayFi

A blockchain-based financial paradigm integrating instant payments with DeFi and RWA tokenization to maximize the time value of money, pioneered on Solana for high-speed, low-cost global transactions.

What is PayFi?

PayFi, short for Payment Finance, is a decentralized financial framework that merges real-time payment processing with advanced financing mechanisms, enabling instant access to liquidity and capital efficiency without traditional intermediaries. Coined by Solana Foundation Chair Lily Liu at the 2024 Hong Kong Web3 Carnival, it centers on the time value of money (TVM) principle, where users leverage programmable smart contracts to generate yields from future cash flows or tokenized assets, such as using interest from a $50 deposit in a Solana lending protocol to cover a $5 purchase under the “Buy Now, Pay Never” model. On Solana, PayFi exploits the network’s 400-millisecond block times and sub-$0.01 fees to facilitate T+0 cross-border settlements, targeting disruptions in the $16 trillion credit card market and $89 trillion trade finance sector.

Key applications include invoice financing via platforms like Huma Finance, which launched on Solana in November 2024 and processed over $2 billion in transactions with zero credit defaults by mid-2025, providing instant liquidity for global businesses using stablecoins like USDC and PYUSD (64% market share on Solana). Other projects, such as Reap for business lending and Perena for stablecoin interoperability, enable creator monetization through milestone-based payouts and RWA tokenization of real estate or receivables, boosting liquidity for cross-border trade. As of September 2025, Solana’s PayFi ecosystem has driven $3.6 billion in on-chain stablecoin volume, with partnerships from Visa, Circle, and Stripe enhancing scalability through Firedancer upgrades for over 100,000 TPS.

Challenges persist in regulatory compliance and adoption, addressed by the second PayFi Summit at Consensus Hong Kong 2025, hosted by Huma Finance and the Solana Foundation, featuring speakers like Lily Liu and Agora CEO Nick Van Eck to explore institutional integration. Emerging protocols like Remittix (RTX), raising $26 million in presale with CertiK audits and live beta wallets, exemplify PayFi’s growth, offering borderless payments with 100x potential amid Solana’s $50 billion TVL.