Superfluid and Real-Time Money Streaming

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Monthly salaries, although the norm, are a source of friction. It can be difficult to remember when certain bills and subscriptions need to be paid.

But what if you could average out the cost of these subscriptions to a single daily amount? Or even on a per-second basis?

Introducing Superfluid - They describe themselves as an “asset streaming protocol that brings subscriptions, salaries and rewards to DAOs and crypto-native businesses.”

I recently did a podcast discussing Superfluid over on Youtube where I discuss some of the potential applications of this technology and also projects which are offering similar tools.

But let’s get into it.

So how does Superfluid work?

Superfluid is a smart contract framework which acts as a ‘wrapper’ to normal tokens, providing additional functionality.

In particular, it introduces the ability to create ‘money streams’ which moves token in a constant-rate by-the-second without needing to lock up capital.

Below is how your dashboard may look, in this case my friend has an inflow of 800 USDC/month, and outflows of 598.5 USDC/month. Throughout the month, his balance will increase by 201.5 USDC/month.

When a stream is a created, Superfluid takes note of the current time and how many tokens you want to stream per hour/day/year.

As the recipient, when you check your balance, Superfluid looks at how long it has been since the stream was created and the rate of transfer to understand what your current balance should be.

The value shown is immediately accessible to the recipient without the need for redemptions or additional steps.

One key feature is that creating a stream only requires a one-off payment, providing an effective alternative to recurring payment such as employee payrolls.

How can we use Superfluid?

Salary Streaming and Subscriptions

The base case for Superfluid enables the earning and spending of money in real-time on a per-second basis. This can include earning from salaries, and also spending on subscriptions. This is called a Constant Flow Agreements (CFA).

In the example below, Alice (A) is receiving 0.04 USDC/sec from Charlie (C) her employer. This is equivalent to an inflow of ~97,000 USDC/month.

0.04 * 28 * 24 * 60 * 60 = 96,768 USDC/month

At the same time, Alice has an outflow of 0.02 USDC/sec to Bob (B) who may be her employee. This is equivalent to an outflow of ~48,000 USDC/month.

0.02 * 28 * 24 * 60 * 60 = 48,384 USDC/month

In the above case, Alice’s inflows could include:

• Salaries

• Sale of goods (paid over a month)

• Dividends from investments

And her outflows might include:

• Employee salaries

• Rent

• Subscriptions (Gym, Netflix)

Instant Distribution Agreements

The simplest analogy of Instant Distribution Agreements (IDAs) is that of dividend payouts from shares. As long as you hold a share, you get a piece of the pie when the dividends are paid out.

In the case of Superfluid, IDAs allow you to outline a list of accounts (X, Y, and Z below) and assign them ‘shares’ (this would represent their holdings). Account A would function as a master account, and when any funds are received they are automatically distributed to the listed accounts proportional to their holdings.

Imagine you need to pay 100 accounts, this would require 100 transactions, one for each account. Using IDAs, this would only require 2 transactions, one to create the ID and list the accounts, and one to pay out.

Better yet is that IDs are reusable and modifiable, meaning you can add more receiver accounts and modify each of their weightings. This makes IDAs extremely cost-effective for recurring payments to multiple accounts.

Investing and DeFi

Recurring buys or Dollar-Cost Averaging is a well known long-term investment strategy. It involves purchasing a fixed amount of an asset at a given interval, generally on a monthly basis.

The downside to it is that you’re likely to miss out on all the little dips and peaks that happen throughout the month.

Ricochet Exchange is a platform which leverages Superfluid’s Constant Flow Agreement (CFA) functionality to purchase an asset of your choice in real-time, letting you make the most of all those little dips in the market.

In the below example, your employer is streaming you DAI. Using Ricochet Exchange you can set up a streamed purchase of ETH and MKR. Now in real time, you are able to convert your DAI into both of the above assets, giving you peace of mind that you’re dollar-cost averaging in the best way possible.

Reflections

I think Superfluid is one of those innovations which has many use cases grounded in our day-to-day lives. We all want to simplify our finances, and we want to know how much we’re spending and where it is going.

The platform enables many use cases where we want to try out a new subscription-based platform but do not want to commit (and the free trial is probably too short). And generally gives us a way to spread the cost of things over the entire month.

We’ve already seen platforms such as Coinshift integrate Superfluid for benefit their crypto-native community with money streams. And it goes to show that the demand for a platform like Superfluid is there.

Further Reading

I did a podcast discussing Superfluid, it’s applications, and where we can see it being used.

I also spoke to some of the guys who built out the Ricochet Exchange that we discussed in this article.

Thanks for reading! If you enjoyed this edition of The Crypto Compass, feel free to reply to this email and let me know. I read each piece of feedback and take it on board.