Bringing Microeconomic Leverage to the Masses With Money Streams

By empowering individuals and firms with self-custody of their assets, trustless transactions, and decentralized governance models, web3 is transforming microeconomics. We believe that by building upon these principles, crypto protocols can further enhance microeconomic leverage — and Superfluid Protocol is no exception.

In today’s article, we’ll examine how Superfluid money streaming unlocks two new dimensions of microeconomics: microinvesting and micropayments.

Redefining Microeconomics in Web3

When we refer to “microeconomic leverage,” we don’t just mean the economic power that results from optionality (as noted by Balaji), but also the direct financial empowerment of individuals.

In a conversation with Naval, Balaji illustrates the power of microeconomic leverage as it pertains to self-directed investing, stating,

“It’s pretty hard to build something, but with crypto there’s no longer any threshold for investing . . . You can invest a dollar, you can invest $10 . . . [with crypto] you totally remove all thresholds . . . just as easily as you’d ‘like’ something or ‘poke’ somebody, you could send them a dollar.”

With Superfluid, crypto assets are transferred every second. Moreover, streams only take a single transaction to open and continue to flow as long as you maintain a healthy wallet balance — meaning you can use Superfluid to transfer extremely small amounts of value (e.g., 0.0000001 USDC) every second in a hyper efficient manner. As realized by Ricochet Exchange, this is an extremely powerful use case for investing, especially when coupled with programmable dollar-cost-averaging.

Putting the microinvesting implications of money streaming aside (it’s a topic we’ve written about at length in the past), Superfluid streams can be used to make repetitive micropayments financially feasible.

Money Streaming Makes Ongoing Micropayments Possible

In a 2009 article titled, “How to Save Your Newspaper,” Walter Isaacson, former managing editor of TIME, wrote,

“. . .[Charging for content is] something [publications] used to do at the dawn of the online era, in the early 1990s. Back then there were a passel of online service companies, such as Prodigy, CompuServe, Delphi and AOL. They used to charge users for the minutes people spent online, and it was naturally in their interest to keep the users online for as long as possible. As a result, good content was valued.”

Isaacson continues,

“One of history’s ironies is that hypertext–an embedded Web link that refers you to another page or site–had been invented by Ted Nelson in the early 1960s with the goal of enabling micropayments for content. He wanted to make sure that the people who created good stuff got rewarded for it. In his vision, all links on a page would facilitate the accrual of small, automatic payments for whatever content was accessed.”

Finally,

“. . .A person who wants one day’s edition of a newspaper or is enticed by a link to an interesting article is rarely going to go through the cost and hassle of signing up for a subscription under today’s clunky payment systems. The key to attracting online revenue, I think, is to come up with an iTunes-easy method of micropayment. We need something like digital coins or an E-ZPass digital wallet. . .”

Despite being well over a decade old, Isaacon’s article (which was published just one month after Bitcoin’s launch) is eerily prescient.

Not only does he reference the concept of using real-time, automatic payments for access to content — something now possible thanks to our Unlock and Collab.land integrations — but he touches upon an issue near and dear to our hearts: pull vs. push payments.

In an interoperable web3 environment, ongoing “push” payments are far more efficient than recurring “pull” payments. That’s because traditional pull payments require periodic transactions (which in web3, come with gas fees) and/or setting up a subscription account (which as Isaacson notes, is a hassle). In comparison, ongoing Superfluid streams are painless to open, and they allow you to pay fractions of a penny every second.

Frictionless Money for the People

As individuals look towards more inclusive, sustainable monetization models, micropayments will play an increasingly important role in society. With second-by-second Superfluid streams, programmable micropayments are now technically possible — presenting a meaningful way for individuals to attain microeconomic leverage.