Last updated: Aug 20, 2023
Superfluid Finance is a smart contract framework, which enables users to move assets on-chain following predefined rules, with a single on-chain transaction, which provides a constant flow of assets in real-time from a sender’s wallet to the receivers’.
Through the protocol, users can have a constant flow of assets on-chain with no capital lockups, as well as distribute rewards with a fixed cost for it in a single transaction for any number of receivers. This essentially means that a fixed amount of assets can be transferred from one party to another in a continuous flow, depending on predetermined parameters, without the need for the assets to be locked in a smart contract for example. The company also describes itself as “very flexible” due to which it can be used for “anything [one] can imagine”.
The major components around which the Superfluid framework is built are Agreements, Super Tokens, and Super Apps. Each of those components or primitives enables new features, however, users don’t need to interact with all of them. They can be mixed depending on clients' needs.
The Agreements represent the rules of how a Super Token can behave. Since the network consists of a single host contract, with multiple agreement contracts, each agreement contract must be on an “approve list”, otherwise the host contract won’t execute the agreement code.
Some of the agreements include the Constant Flow Agreement, which enables token flow from one wallet to another, and the Instant Distribution Agreement, which allows tokens to be sent to multiple recipients in a single transaction.
Super Tokens represent ERC777 standard tokens, able to “react” to certain events using callbacks. The standard also includes batch capabilities which enable multiple factors to be included in a single transaction, as well as Meta-transactions, which submit transactions on behalf of another account.
The Superfluid App or Super App is a smart contract designed to react to agreement calls, such as after a token flow has been started, automatically start flowing another token back or distributing tokens among shareholders. Since Super Apps are made to manage agreements and respond to changes, through them developers can write custom logic and create various use-cases.
When opening a stream through the Superfluid app, users need to lock a number of tokens as a “buffer” or deposit, taken out of their balance. If streams are left open for too long, there is a risk of losing the buffer, as the mechanism is made to incentivize users to close their Superfluid streams before running out of tokens, since it is their own responsibility to do so.
The general flow of solvency states for Super Tokens in a Constant Flow Agreement is split into three states. The Solvent refers to the sender’s balance being greater than zero, which allows for the stream to flow to the receiver as expected since there are also enough tokens to back the stream.
When the sender’s balance drops to zero, the state changes to Critical, and the permissions on the stream now allow anyone to close it. The initial buffer created by the sender is used to go on paying funds to the receiver’s Superfluid wallet until the stream is closed. Once a stream is closed, the remaining buffer is added to the TOGA contract which adds it to the current Patrician’s stake.
The last period is called the Insolvent state, it means that a stream isn’t closed and the sender’s deposit is completely consumed. During this time, the stream will continue to the receiver, however since the sender’s wallet doesn’t possess the tokens which are being sent, the deficit is recorded to keep the Super Token solvent within the Superfluid protocol. Once the stream is closed, the deficit is taken as a slashing fee by Superfluid and burned to offset the tokens created by the insolvent stream.
The account who closed the stream is called by the platform a Patrician or Pirate and gets to receive a reward for his actions. Patrician accounts are in charge of different tokens. Once a stream is closed while Critical, the remaining balance in the buffer account is taken as a reward by a Patrician. Each time a stream is closed while insolvent, the Patrician is slashed, and the Pirate rewarded as a result.
To become a Patrician for a token, users must stake to the TOGA (Transparent OnGoing Auction) contract, in the token they are trying to become a Patrician for, and as long as the new stake is higher than the current stake, the new user becomes a Patrician and the former one gets their stake back.
The Superfluid app hasn’t issued its native token.
The Superfluid Finance team has three founders. Francesco George Renzi is the company’s CEO and his past work experience spawns in various fields and management positions such as being a member of the board of directors of A.S.D. Apokas Paintball in Milan, Italy, and the Project Manager of Decentral.ee.
Another founder and current CTO is ZhiCheng Miao. He is also the founder of Decentral.ee and has past experience as Senior Software Developer at Microsoft for four and a half years, as well as a year at Skype as a Video Software Engineer. The co-founder of Superfluid also has more than three years of experience in developing software used for the European Galileo Ground Station.
The last of the three co-founders is Michele D’Aliessi, he is the present COO of Superfluid and co-founder of Ympact – a non-profit organization aiming to push younger generations into entrepreneurial action. His past experience includes working as a Venture Scout in PoliHub, Head of Growth for Makr Shakr, Digital Industry Lead at the European Institute of Innovation and Technology. He is also currently working as an Advisor in Token Economics for Fabric Ventures, and as a Visiting Lecturer in Blockchain Technology at Bayes Business School.
The rest of the core team has past experience in numerous fintech firms and can be found on the platform’s webpage about section.
On February 8, 2022, the Superfluid protocol was hacked, resulting in the loss of 11’008 MATIC, 1’507’931 MOCA, 28 ETH, 39’357 sdam3CRV, 19’387’874 QI, 44’581 SDT, 23’653 STACK, and 562’834 USDC. The attack targeted Superfluid’s host contract by exploiting a vulnerability in it, which allowed the malicious party to fool the serialized state managed by the host contract, where all the context an agreement function needs to know is held. In less than 24 hours, the Superfluid team released a medium article describing the incident, managed to find and patch the vulnerability, and start a compensation plan, after the affected parties agreed to it. A $1M bounty was proposed to the attacker, however, they did not respond to the proposal.
Superfluid audit can be found in the protocol dashboard on this webpage.
Superfluid is sponsoring the 2022 ETHDenver Hackathon (February 11th – 20th, 2022) as well as the Road to Web3 2022 Hackathon, running from February 3rd – 8th, 2022 created by ETH Global and Polygon.
Some of the project’s partners include Opolis, which offers employment benefits and shared services to independent contractors, freelancers, digital nomads etc., as well as Roji – a platform making real assets like artwork, collectibles, and real-estate digital by wrapping them in NFTs and ensuring they represent ownership in a legally sound way, with ongoing compliance.
Superfluid is also working with EPNS to add a decentralized communication layer to its protocol. Minerva Wallet, created by lab10 collective launched MIVA, the first native SuperToken on the xDai network innovating airdrops by airstreaming their token to the platform users leveraging Superfluid.
The project is working on launching on more L2 solutions to gain exposure to a wider audience of users and developers. The team behind the company believes we are in “the dawn of networked cash flows” – the company’s streams of money.
With the expansion to multi-chain EVMs, the developers plan to build the tools for Superfluid-powered dApps to “prosper across different environments”, and to work on the wider acceptance of Super Tokens across the ecosystem.
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