Crypto Start-up Profile: Superfluid

Ever wonder why our paychecks typically come twice a month or bi-weekly, in some cases weekly? In the 19th century it was common for workers to be paid monthly, at the end of a season – or in the case of seamen, at the end of a voyage when profits were divided. Labor historian Nelson Lichtenstein traces the modern pay cycle to World War II, when the U.S. Congress passed the Revenue Act of 1942 to increase revenue to fund the war effort and introduce the country’s first tax withholding system.

Given the complexities of calculating pay rates, tax, healthcare and other deductions, as well as managing a company’s human resources and payroll functions, it’s not surprising that most employers balance that effort with their employees’ need for prompt payment (if you think about it, waiting for a paycheck is effectively granting your employer a 0%-interest loan).

But in a fast moving, technology-intensive Web3 context, this all seems quite anachronistic. And startups like Superfluid are showing that it is, allowing payments that flow continuously across the economy at the speed of the internet. Superfluid’s asset streaming protocol enables DAOs and crypto-native businesses to stream not only salaries and other payments but also subscriptions, token vesting and rewards to recipients every second.

“Superfluid fundamentally changes the velocity of money and gives everyone the ability to automate money over time, allowing us to rebuild various financial relationships in more people-empowering ways,” Vijay Michalik, Head of Product at Superfluid, told Modern Consensus. “It’s a novel mechanism that fundamentally can’t be built outside of Web3.”

Payroll on autopilot

Superfluid simplifies and automates payroll management, reducing the cognitive effort traditionally associated with monthly administrative tasks. In just a few steps, users can set up autopilot payroll, ensuring a continuous stream of tokens to contributors without the need for constant manual interventions. An entire year’s payroll can be automated in a matter of minutes, with the ability to update it at any time. And with the ability to pay multiple wallets in a single transaction, Superfluid minimizes gas fees, making it a cost-effective solution.

Superfluid does this by employing what it calls Constant Flow Agreements (CFAs), which are smart contracts defining the terms of the payment stream. CFAs specify the rate at which tokens flow from one party to another, and the entire system operates in terms of “stream units,” representing a quantified flow of tokens per second. These streaming payments occur in real-time, eliminating the need for recipients to wait for specific intervals, a departure from traditional periodic settlement methods. Superfluid’s design also offers flexibility, allowing developers to create streams that are composable, so users can split and forward incoming streams effectively transferring funds as they receive them allowing recipients to compound in real-time, without having to wait until the end of the month

Streaming subscription payments

Superfluid Subscriptions offer a range of benefits to Web3 companies seeking a streamlined and efficient solution for crypto-native checkouts and automated recurring transactions. This free, open-source, and self-hosted software toolkit provides a seamless Web3 subscription experience by utilizing programmable money streams. With Superfluid Subscriptions, customer payments are effortlessly processed in a single transaction, eliminating the need for repetitive gas fees and ensuring a disruption-free payment flow.

Noteworthy is the toolkit’s flexibility and cost-effectiveness. Being open-source and non-custodial, Superfluid Subscriptions incur zero fees, allowing companies to implement a highly customizable Web3 subscriptions checkout tailored to their brand. The toolkit supports any ERC-20 token and is compatible across various networks, including Polygon, Optimism, Arbitrum, Avalanche, BNB Chain, Gnosis Chain, and Celo. This versatility enables companies to accept payments in their preferred stablecoin or utility token, with ongoing plans to expand to more networks in the future.

Custom vesting schedules

Superfluid provides projects with the capability to effortlessly establish and share customized vesting schedules through a user-friendly interface. One of the distinctive features of Superfluid’s streamlined vesting mechanism is its liquid nature, ensuring that tokens are accessible in the sender’s wallet before the vesting process commences. This liquidity affords users flexibility, allowing them to generate yield in decentralized finance (DeFi) or utilize the tokens for various purposes until they undergo the vesting process.

Superfluid’s Vesting solution goes beyond simplicity and liquidity; it is designed to seamlessly integrate with the Web3 ecosystem. The composable nature of Superfluid’s vesting enables the automatic transfer of vested tokens to DeFi products, facilitating activities such as liquidity provision, staking, or yield farming. This integration adds a layer of flexibility to token management, aligning Superfluid’s vesting solution with the broader landscape of decentralized applications and protocols in the Web3 space.

“Airstreaming” token airdrops

Superfluid’s Airstreams feature offers advantages in mitigating the inherent risks associated with traditional airdrops, particularly those reliant on snapshots. By opting for a streaming approach over time, Airstreams effectively reduce the likelihood of bulk sales triggering sudden price drops, providing a more stable and controlled distribution of tokens. This approach minimizes the volatility typically associated with snapshot-based airdrops in traditional settings.

Airstreams contribute to sustained user engagement by providing organizations with a tool to design incentives that foster continuous user participation and activation. This capability allows organizations to tailor rewards for both present and future user behaviors, thereby promoting ongoing contributions to the success of their products. The flexibility of Airstreams is underscored by its configurable and adaptable rules, empowering organizations to align the logic of their Airstreams with the evolving needs of their products. This includes the ability to reward various behaviors over time and maintain the airdrop as an open-ended initiative, enhancing its effectiveness in meeting the dynamic requirements of the organization and its user community.