Programmable cash flows & money streaming

At this point, for most payroll teams, the future can wait. Intuitively, their focus is on the more immediate challenges of COVID-19 and adapting to the ongoing changes - from worldwide tax law swings to layoffs and layoff compensation.

Blockchain technology leverages the distributed ledger concept to provide real-time verification of payments eliminating the necessity for intermediaries including banks and clearinghouses. Removing the middlemen allows payroll processes to be streamlined, accelerated, and made dramatically less expensive - resulting in a reduced role for banks, which in turn means a decrease in bank fees.

Faster, more intelligent payments undoubtedly make sense in the context of a growing gig economy, which is expected to grow even further given the now widespread uptake of remote working. Gig economy workers such as freelancers and home-based contractors alike often suffer from cash flow issues and could benefit significantly from streaming payments, which can be aided by the use of "smart contracts" stored in the general ledger, allowing the payment to be cleared as soon as the specific task is accomplished.

Up until now, streaming payments - i.e., payments from one account to another and then to others, simultaneously and in real-time - used to be the holy grail of decentralized finance. Government channels were thought to be the answer, but because of the problem of "locked assets" and the inefficient design of capital, they are unable to scale.

Can you imagine DAOs that are able to redirect all of their income streams to contributors as instant as they come in?

@Vinnybalbo @Dizzy_d718
Photo by Drew Graham / Unsplash

Superfluid

Unlike monthly payments, streaming money is the perfect exchange of time (or services) for money, so no trust or upfront payments are required.

The Superfluid protocol focuses on building an infrastructure that enables real-time financial transactions. The smart contracts framework allows users to shift assets up the chain and apply predefined rules, called "agreements," to streaming transactions.

This allows for potentially zero working capital and completely eliminates payment delays. Streaming payments also offer employers/employees a new kind of accountability and agility that was simply unthinkable with legacy payment infrastructure.

This allows the system to accomplish the following:

  • Money streaming – constant flows on-chain with no capital lockups
  • Reward distribution – fixed cost distribution in a single transaction for any number of receivers
  • Batch calls
  • Contract callbacks

Superfluid is currently active on the Ethereum, Polygon and xDAI networks. Using an ERC-20 token called Super Token, Superfluid allows its users to perform multiple tasks in a single transaction. Because Superfluid requires only a single transaction to initiate a flow of funds, there are no additional gas or transaction costs. In addition, streaming digital assets requires only a single transaction on-chain, significantly reducing recurring payment processing costs and enabling the emergence of a new subscription-based economy on-chain.

This is a big difference from something like Sablier or traditional monthly payments, as streaming transactions do not require trust or upfront payments.

Superfluid tokens are ERC-20 and ERC-777 compliant, but also have built-in agreements that allow real-time balances in a wallet to be automatically updated without requiring transactions.

Multicoin Capital closed a $9 million seed round investment in Superfluid. In turn, investments were made by Semantic Ventures, which had already led the pre-seed round, and DeFiance Capital, Delphi Digital, MetaCartel Ventures, Fabric Ventures, The LAO, DeFi Alliance, Divergence Ventures and MMC Ventures also participated in the investment. Several well-known angel investors such as Balaji Srinivasan, Stani Kulechov, Do Kwon and Ryan Selkis are other investors worth mentioning.

By joining the Opolis Association or Decentralized Employment Organization (DEO), freelancers, creatives, consultants, and entertainers can provide the same high-quality benefits and services as full-time employees while maintaining independence. Health insurance, cryptocurrencies and traditional retirement plans, tax compliance automation, etc. are provided to Guild members.

Coordinape

Coordinape is a platform for DAOs to distribute assets to contributors without top-down management or HR – a "Decentralized payroll for flat organizations". Community grants, internal salaries, and special projects are all able to be incentivized and rewarded by the community directly. Rather than voting or black box committees, contributors themselves can reward the value they think has been created.

Coordinape is just part of a broader effort to further decentralize the management of yearn to distribute the Yearn DAO community's US$ 40,000 per month discretionary budget. In the case of yearn, each Coordinape member has a designated number of "allocation points" to distribute to peer members with which they have interacted in a given month. Members with the most interactions and allocations receive weighted shares of the grant budget.

The simplistic premise is that by asking everyone in the community who is performing well, the collective answers will give a good sense of where the value lies and as to who should be rewarded the most. Over time, this also gives the DAO valuable insights into what kind of work is a priority, where the community finds the most value, and who is making the most significant contributions in different areas. Shared visuals allow everyone in the community to see who is working on what and find opportunities to collaborate or reduce duplication of effort.

As a final side note, other alpha partners for Coordinape besides yearn include other heavyweights like C.R.E.A.M., SushiSwap and Gitcoin.

Sablier & HiFi Finance

Similar to streaming movies on Netflix or streaming music on Spotify, Sablier allows anyone all over the world who has an internet connection and an Ethereum wallet to stream payments in the form of ERC-20 tokens. Currently supported tokens include DAI, USDC, SAI, and Compound Finance's cDAI and cUSDC.

Payments are transferred from the sender to the receiver over time in the form of "money streams". Money streaming is an alternative term first coined by Andreas Antonopoulos in 2017.

HiFi Finance (formerly Mainframe), a blockchain company that launched in 2018 as a decentralized communications platform, has announced in July 2020 plans to relaunch as Mainframe Lending Protocol after it acquired Sablier.

The company planned to integrate Sablier's money-flow technology into a fixed-rate lending protocol and create tokenized debt markets to advance the development of decentralized finance (DeFi).

The HiFi Lending Protocol empowers anyone to create fungible on-chain debt securities that are economically comparable to zero-coupon bonds. The tokenized bonds are backed by a surplus of collateral deposited in audited and publicly viewable Ethereum smart contracts. A novel system of incentives, including penalties, rebates, and arbitrage opportunities, protects the protocol from under-collateralization. Future compatibility with other DeFi primitives will allow participants to earn income simultaneously with multiple DeFi protocols. HiFi tokens balance the incentives of all participants, ensure balanced participation among ecosystem members, and provide certain desirable benefits within the system.

Decentralized Employment Organizations

Opolis pioneered the concept of Decentralized Employment Organizations (DEOs), merging established legal and technological frameworks. Verified members have the freedom to partake in an infinite number of DAOs, while they only need to be part of one DEO. Members are vetted through employment verification requirements and can work under pseudonymous status throughout their work cycle while complying with KYC and AML regulations.

"DEOs will allow for sustainable mutuality between employer (service consumer) and employee (service provider)." – Opolis

People will be able to change freely from one DEO to another as their preferences demand. It is anticipated that the main factors by which people will organize themselves will include social and political beliefs, skills, and geography. DEOs will be self-governing and adopt the changes made by their members. If any changes are made to a DEO and a member dislikes the outcome, they will have the option to leave the DEO and join an organization that is a more suitable fit for them.

Universal Basic Employment (UBE)

DEOs could potentially opt to propose a Universal Basic Employment (UBE) social safety net that would compensate members who are in between work projects with a predetermined fee for services. Qualified members would perform tasks established by DEO and receive compensation for doing so. Members would also contribute to this fund through payroll deductions, and there would be rules for distribution based on voting proposals from DEO members.

Universal Basic Income (UBI)

If members choose to implement a Universal Basic Income (UBI) in to their DEO, they then would vote to have a certain percentage of their regular paycheck deducted and deposited into a DEO-owned designated UBI fund. Members likewise would vote on the structure of the basic income distribution (i.e., members could decide that any member who belongs to their DEO should be able to access basic income funds if they are out of work for more than one month, or some other period of time decided by the DEO). Members who do not wish to participate in UBI could simply choose a DEO in which UBI is NOT part of the welfare program.

Opolis & $WORK rewards

Opolis was born from the vision of a more egalitarian global employment framework: A system "that provides self-employed individuals with powerful tools and infrastructure to shape their work lives to fit their personal life preferences." The platform provides a digital employment cooperative that offers, affordable employment services and shared services to independent contractors, freelancers, digital nomads, solopreneurs and sole proprietors. Opolis recently announced the launch of its new community patronage token, $WORK.

Based on principles proposed by Elinor Ostrom in Governing the Commons, the Opolis Employment Commons has developed an economic model that will reward members of the Commons for patronage activities described as wage consumption, referral of new members, and outreach. As a utility token for managing, deploying, and distributing patronage within the Commons, $WORK (token whitepaper) owners must be members of the Employment Commons to receive all its benefits.

Opolis establishes the technological and legal framework for the self-determined worker. Decentralized employment organizations (DEOs) will enable sustainable reciprocity between employers (service demanders) and employees (service providers).

Superfluid and RaidGuild collaborated with the Opolis core team to develop the underlying technology that $WORK will provide to Commons members. Superfluid will pursue its partnership with Opolis to develop streaming finance for payroll and other employment related use cases.

"The means to an end paycheck to paycheck culture needs to evolve." -John Paller, Opolis Founder & Executive Steward

Source: ETH Denver 2021, Paller John

More information:

Final Thoughts

The future actually can't wait!
According to Opolis by 2025, it is expected that more than 50% of the U.S. workforce will be freelance/gig workers, whereas 84% of Millennials and 81% of Generation Z are already exploring the idea of being part of the gig economy. That said, not many are equipped to manage the life changes that come the day they embark on freelancing. In fact, a lot of them get it wrong and pay the consequences in terms of having to retire with tax penalties, uninsured medical expenses, or years later with zero savings. Conversely, those who do it right can spend hours each week maintaining their records in order.

The website and the information contained therein are not intended to be a source of advice or credit analysis with respect to the material presented, and the information and/or documents contained on this website do not constitute investment advice.