Imagine your transactions in Web3 flowing like liquid Helium without resistance. So smooth, quick, and hassle-free? Nice, isn’t it?
Well, you can stop imagining now. The Superfluid Protocol has arrived to do just that! Real-time decentralized finance, as easy as A-B-C!
And since it’s happening on Web3, you control the money flow. Did I mention it is all in real time?
Now, let’s dive in and understand what Superfluid Protocol is all about!
Concept of Real-Time Finance
The concept of Real-Time finance brings a futuristic vision of having a natural time money flow, making finance in Web3 as smooth as frosting.
The vision of Superfluid is to empower individuals of Web 3.0 to easily stream money from their accounts in a flow without hindrance or hesitation. Superfluid achieves this through a multi-chain facility to ensure the simultaneous transfer of funds between accounts.
The continual flow of money/cryptocurrency/token ensures you maintain a balance while making a payment; rather than otherwise. The ‘otherwise’ case is us spending and paying the same instant and being broke the next.
Let’s face it! We’ve all been there! Superfluid is here to make sure your money flows through streams without resistance like liquid Helium!
The Idea of Superfluid Protocol
For anything to exist in the world, one must have a necessity. The birth of the idea of liquid De-Fi is what brought the Superfluid Protocol to existence.
Just as the Helium superfluid flows from its source to its destination continuously, without struggle, the Superfluid Protocol deals with the flow of money/assets from the sender’s account to the receiver’s account almost always.
The Superfluid Protocol aims to smoothen the process of monetary transactions of cryptocurrencies and stablecoins on a blockchain within Web3.
It achieves its aim through 4 main components of the program:
Super Tokens
Super Tokens are extensions of the ERC20 token contracts in the Superfluid Protocol. They are essential to ensure the Super Agreements steadily execute themselves.
Later, the Superfluid Agreements overlook the Super Token transactions occurring in the blockchain.
There are two forms of Super Tokens – A Wrapper Token and A Custom Token.
A Wrapper Super Token is an underlying token that is ‘wrapped’ to attain Super Agreement functionality.
Finally, you end up availing a Super Token that’s executable in the Superfluid Host and can interact with Super Agreements.
A Custom Super Token, on the other hand, doesn’t have a token that disguises itself within a “wrapper”. They are merely Super Tokens with custom functionality within the Superfluid Host.
In addition, since they are primarily Super Tokens, they have the Super Agreement functionality embedded.
Super Agreements
A Super Agreement is functionality available within the Super Tokens in the Superfluid blockchain.
These agreements contain information on token transfers that will occur on the blockchain.
Two or more parties can allot the instructions and command the code to execute the transfer in an order.
So, Party A can pay Individual B 50 Super Tokens at a constant speed or Transaction Rate. This occurs because Superfluid is a real-time finance protocol.
Money is sent to or received by the individual constantly and in real time.
Sending and Receiving money occurs in two methods in the Superfluid Protocol.
The first method is CFA: The Constant Flow Agreement.
In a CFA, the user or a sender writes a code in the agreement that states to pay the receiver XYZ amount of tokens per second.
Well, the transactions occur every second. The calculation of the transaction rate is per second.
But, the sender can inform the blockchain to send the tokens on a per month or a per hour basis too. The blockchain calculates and executes the payment on a per-second basis.
It lets you stream tokens from your account to anyone, specifically to the address you mention in the agreement.
The second method is the IDA method: The Instant Distribution Agreement.
In this Super Agreement, you’ve decided to pay multiple parties at once. And the tokens are in distribution to all the accounts you owe.
So, how does the blockchain decide – whom to pay and how much?
Well, you write the command, and it executes it for you.
You specify the total token amount and how it gets distributed within the agreement.
For example, you say you want to give away 100 tokens to 3 parties. You mention Party A receives 30%, Party B gets 40%, and Party C acquires another 30%.
The 100 tokens get distributed as 30 tokens to A, 40 to B, and 30 to C.
These instructions to the blockchain are present within an IDA Index of the publisher (sender).
Super Apps
A Super App is a smart contract on the Superfluid blockchain. These smart contracts respond to changes within the Super Agreement in natural time.
Super Apps behaves as a conjunction layer that supports real-time changes and programmability within the chain.
Callbacks are responsible for the responsiveness in the Super Apps. A Callback is a code that occurs within a Super App.
These codes deploy on-chain autonomously on-chain as a response to events. These events are nothing but changes in the state of Super Agreements.
Superfluid Host
The central processor of all things Superfluid. The Superfluid Host contract manages, overlooks, and controls the relay of transactions.
Furthermore, the Superfluid Host is responsible for coordinating with the Super Tokens, Super Apps, and Super Agreements.
Super Tokens, as the foundation of the Superfluid Protocol, contain all the information regarding the Super Agreement.
But, Super Tokens receives this information from the Superfluid Host contract.
However, for Super Apps to occur and function; they must first integrate with the Superfluid Host contract.
After the deployment and registration of the Super App, the Super App avails function to interact with the Super Host contract.
Only post the deployment of Super Apps that the Callback function is active.
And finally, the Superfluid Host contract and Super Agreements. Since the Super Agreements contain information regarding the token flow, any changes or upgrades in the Super Agreement will be designed and registered in the Superfluid Host contract.
Importance of Superfluid Protocol
The importance of the Superfluid Protocol in our lives isn’t as important as Oxygen. And it’s okay to not remember everything at once, come back and read again!
But, to remember, you must first forget. And to forget, you must first know!
So, let’s go through the importance of the Superfluid Protocol in our lives, in finance, and Web3.
Security
Needless to say that this financial streaming protocol runs on the decentralized Ethereum-based blockchain it is known that the transactions occurring are secure and in your control.
You program a Super Agreement or decide when a Callback function deploys on the chain. And most of all, your transactions and streams are in your control.
Stability
Whether an inbound or outbound transfer, the fact that one may have a stable cash flow provides stability and assurity of the minimum balance one must maintain in their account.
Financial stability and freedom to spend, give, pay, and invest are made possible with this Superfluid DeFi protocol!
Interchangeability
The Superfluid Protocol, in association with Connext and Nomad, has introduced cross-chain asset streaming within the blockchain.
Although Superfluids’s multi-chain streaming facility provides the base for the live streaming of digital assets, a cross-chain streaming capability inside the protocol could increase its potential multifold.
Use Cases of the Superfluid Protocol
Discussed below are the multiple use cases of the Superfluid protocol:
Salary
Superfluid makes transactions easy and smooth! In addition, it’s real-time and think about this – wouldn’t it be nice to get your salary every moment of the day for all the work you’ve done instead of waiting until the end of the month? Or your payday?
Exactly! The Superfluid Protocol would let you transfer the salary to your employees constantly – so as an employer, you don’t have to see a series of debits and as an employee, you’re constantly rewarded. Isn’t that super?
Installments
Imagine paying your installments and mortgage for the month as soon as the salary comes in. You’re basically left with holes in your pockets in 2 weeks ensuring all the payments are done.
Well, this time, fret not! You can decide if you want to send your tokens to the receiver in a continuous flow through a CFA or instantly in proportion with a total set amount through an IDA.
This allows your funds to flow to the accounts you owe, slowly, but steadily. You are neither too early, nor too late to the payment because it’s happening throughout the month!
Rentals
Anything that you rent or subscribe to comes with various payment plans. Well, Superfluid allows you to specify how many tokens and you can set the time of the transaction to occur over a day, a week, or a month.
In essence, you get to decide how much to pay to which service provider and the speed. You pay continuously and get the services continuously. Win-Win, while making sure you don’t go broke in the middle of the month.
DeFi Apps
Superfluid is a DeFi protocol running on an Ethereum-based blockchain. One of the most innovative, exciting, and experimental things a developer could do is to build dApps using the Superfluid Protocol.
Certain dApps such as Ricochet Exchange and The Loan Stream have gained mass popularity for the unique utilization of the protocol and for making DeFi superfluid!
Superfluid-based DeFi applications can ensure not just secure transactions in the stream but make the process smoother to monitor and control the flow of assets.
Vesting
On-chain lending and borrowing often experience a one-time borrow or repay event. The user states that they shall borrow or repay the money to the particular recipient within the blockchain while the miners/validators work through the encryption to validate the statement.
It is a time-consuming process.
Now consider this, you can borrow from A at a constant rate and lend to B at another constant rate; maintaining the financial flow and making the transaction in real time.
The Superfluid Protocol permits this functionality to your stream so you can save your pocket, not go broke, and perform transactions at the same time.
Summary
The Superfluid Protocol is a DeFi protocol that lets you stream money/tokens/assets to multiple parties in real time.
The Superfluid Protocol is beyond awesome and it is all thanks to the 4 pillars it runs on. The Super Tokens, Super Agreements, Super Apps, and the Superfluid Host contract.
In unison, they work together, interact continuously and ensure the financial flow is maintained between accounts.
The importance of the Superfluid Protocol is supported by its many applications globally as many nations kick-start trading and investing in cryptocurrency.
Moreover, we have more novel dApps that releases to the world – making Life and DeFi a piece of cake! These dApps help you pay your loans and subscriptions, and some even aid you in converting from one token form to another.
What dApp would you build with Superfluid Protocol? Got an idea? Let’s discuss this in the comments below!
That’s amazing. Thank you for helping us discover Superfluid.