Superfluid Finance, an Ethereum-based money streaming protocol that automates recurring transactions, has raised $9 million in a seed funding round.
The round was led by Multicoin Capital, with participation from Semantic Ventures, DeFiance Capital, Delphi Digital, DeFi Alliance, Divergence Ventures, and others. Angel investors, including Balaji Srinivasan, Ryan Selkis of Messari, Stani Kulechov of Aave, also backed the round.
The fresh injection of capital will help Superfluid grow its team and build an ecosystem of new "real-time financial applications" co-founder and CEO Francesco George Renzi told The Block. These applications will enable money flows in real-time, including subscription payments, salaries, and rewards, with single on-chain transactions.
Superfluid is currently live on the Ethereum, Polygon, and xDAI networks. Using an ERC20 token called Super Token, Superfluid allows users to perform multiple tasks in a single transaction, said Renzi.
Let's say for example a user wants to donate to a few different open-source projects on a regular basis. "The first thing you'd do is get your hands on a Super Token, for example, DAIx on Polygon. You could do this by upgrading your existing DAI tokens using Superfluid, a process much like wrapping ETH into WETH," said Renzi.
"Once you have Super Tokens, you simply need to sign one transaction to start a stream. Once the transaction is confirmed on the blockchain, the stream will start. As the sender, your balance will start ticking down as the receiver's balance ticks up."
Since Superfluid only requires a single transaction to initiate a money stream, there are no additional gas or transaction costs on a go-forward basis.
Unlike payment channels, users don't have to keep a channel fully funded with Superfluid, and thus the protocol helps with capital efficiency, said Renzi. It, therefore, unlocks an entirely new subscription-based economy on-chain, he added.
"Streaming payments—meaning from one account to another, and then to others, concurrently, all in real time—has long been the holy grail of decentralized finance. State channels were thought to be the solution but by definition cannot scale due to the 'locked assets' problem and the capital inefficiency of design," said Kyle Samani, managing partner at Multicoin Capital. "Superfluid is pioneering an entirely new category of cash flow and incentive design."
There are currently seven full-time employees and a few part-time members working for Superfluid, and the project is looking to hire at least eight more people across marketing, developer relations, and engineering functions, said Renzi. Superfluid is also creating a grants program with the fresh funding in place to enable more Web2 developers to join the crypto space, according to Renzi.
"We believe we need to create a new generation of crypto natives who will be paid in streaming money," he said.
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