Superfluid Raises $ 9 Million for Programmable Crypto Money with New Business Potential – Ledger Insights
Today, the startup Superfluid raised $ 9 million for its “money streaming” startup. Despite the new jargon, Superfluid appears to be a foundational programmable money application on the public blockchain. Currently, it may be targeting the crypto world, but the potential for real-world commercial applications is huge.
Blockchain is known for its hyperbole. Multicoin Capital’s Kyle Semani, who led the roundtable, wrote that Superfluid “represents the biggest step forward in value transfer since the advent of Bitcoin.” And he might be right.
Basically, Superfluid allows recurring payments using cryptocurrencies or stablecoins. Since repeat payments are available outside of the blockchain, that’s not that novel in and of itself. But when you combine it with programmability and composability, it becomes something quite special.
Think about payday installments, especially for people who often need to resort to payday loans. What if you could pay them by the hour? With Superfluid, it is quite possible. It allows you to open a “feed” where you set a rate over a period of time, say $ 15 / hour. It converts that to an amount per second and can stream that amount to the recipient’s wallet. Of course, people don’t work around the clock, but you get the idea.
One of the challenges with Ethereum is gas or the sometimes high transaction costs, and gas only needs to be paid for when the flow is open.
Because this is programmable money, the beneficiary could also set up a flow to use the incoming salary payment, perhaps to pay their rent if their landlord has a wallet.
A solution for margin calls
The use of margin in stock market transactions became essential after the failure of the Archegos family office. When stocks or any other asset is traded using leverage, as the price of the asset moves, the margin requirements change. But the settlement of margins is usually delayed, which creates counterparty risk. Using Superfluid, the amount could be streamed based on the value of the assets.
The core of this app has already been implemented using private blockchains, but the payment leg is done in the conventional way. For example, in 2019 JP Morgan adopted a system that uses a distributed ledger for derivatives so that collateral and payment can be adjusted in real time. Don’t be surprised if in the future JP Morgan uses something similar to JPM Coin linked Superfluid for the payout leg.
Superfluid is still in its infancy, so we’ll have to see how it develops. But it shows huge potential and could be the start of a shift in mindset.
Uber and other tech startups have ushered in the on-demand economy. One of the reasons a lot of things are still payable by the week or by the month is because that is the way the systems operate now. The question is whether Superfluid will make pay-per-second payment the new standard.