How streamflow is redefining salaries with payroll streams

A deep dive into payment streaming — how streams work, the benefits of pay streams vs. salaries, and much more!

Fifty years ago, the fastest form of p2p payment was by check — prompting constant trips to the bank. You also required a bank account to cash checks from your job and anyone else.

As the 1980s came around, financial systems evolved to include “instant payment” solutions like Direct Deposit — saving you a trip to the bank. Though it solved some issues, the cost incurred by your employer discouraged them from making direct deposits regularly.

For instance, most jobs pay their employees bi-weekly or monthly to keep their overhead costs low. This model is insufficient because employees provide value to their company throughout the work week in real-time but do not receive compensation at the same rate.

As we approach 2023, not much has changed with the centralized financial systems and the frequency and medium of which employees receive pay, but with the emergence of web3 comes the advent of payment streaming — a form of truly instant & constant payments.

Instead of performing multiple transactions, employees can set up continuous streams of value that last each pay period.

Streamflow: a new age of payments

By streaming payments with Streamflow, employees can access the value of their paycheck everyday! Streamflow allows employers to set up payroll streams that consistently release value to employees over the duration of each pay period.

With payment streams, you can substantially reduce overhead costs while providing a better experience to your employees.

Along with payroll streams, our token distribution platform offers access to token vesting and the possibility for developers to create new use cases via our SDK. Streaming payments with Streamflow is:

💸Low cost — Token streaming only requires one transaction, diminishing the need for recurring payments. There’s no need for gas or any further transactions by the sender or receiver. Solana also boasts transaction fees of less than $0.01!

⚡️Fast — Solana has a slot time of 400 milliseconds and is currently processing 2,123 TPS (Transactions per second) at the time of writing this.

🤝Transparent — Token streaming details are accessible to both parties, and all transactions are verifiable on the Solana blockchain explorer.

🧑‍💻Trustless — No bank account is required. The sender and receiver only require SPL wallets.

🔐Secure — Streamflow is fully audited.

🧩Composable — Buildooors can create new use cases for Streamflow via our SDK and integrate the streaming primitive within their protocols.

Streamflows tool suite

Our token distribution platform allows users to stream tokens in two ways:

  • Payroll streams💸
  • Token Vesting📊

Payroll Streams 💸

Payroll streams are the most efficient and secure way of making recurring payments to service providers in the modern era. You can stream according to a release rate and top up the ongoing payroll stream with more funds. Payroll streams are customizable and allow you to create the perfect payment workflow:

  1. Customizable Schedule — The sender can specify the release frequency and the number of tokens for each stream. You can stream tokens to the recipient every couple of hours or even every second!
  2. Automatic Withdrawals — Automatic withdrawals allow all unlocked funds to be deposited automatically into the recipient’s wallet.
  3. Batch Payments — With batch payments, you can set up streams for multiple recipients at once.
  4. Topping Up Streams — When the sender tops up a stream, they increase the duration of the stream by adding more funds. The ability to top-up streams is an essential feature for projects where the rate of compensation changes or you extend the project due date. The ability to top up streams also helps employees with less working capital, as they can add funds to the ongoing payment stream as they become available to the employer.
  5. Transferable Streams — The sender/employer can choose whether or not the sender can transfer the stream to another SPL wallet. Once transferred, the stream will continue to stream tokens to the new wallet.
  6. Cancel Streams — Streams can be canceled at any time, returning all locked tokens to the sender. The recipient receives all locked tokens upon cancellation.

Scenario #1: Web3 Company

Imagine you’re the founder of a web3 company- and you decide to contract people globally. With Streamflow, you can enter into a smart contract with the service provider, and as work is complete, the stream releases value to the service provider instantaneously.

Streaming is the best way to promote transparency, as employees can see the locked funds and the balances reflecting their issued payments.

What this looks like:

You’ve contracted a developer for a new landing page for $3000 with a deadline of one week. As the employer, you can choose to stream tokens to your employee at any interval of time you choose:

Per Minute: ~$.29 streamed every minute

Hourly: ~$17.8 streamed per hour

Daily: ~$428.5 streamed, every 24 hours

Let’s say you choose to stream $17.8 to the developer every hour.

It’s the last day of the project- and the stream — and you’ve decided to implement some new features to the landing page. You’ve agreed with the developer on a price of $1000, increasing the total amount of the project to $4000. Adding more funds to an existing stream is as simple as topping up your stream and extending the expiry date.

After topping up the stream with $1000 the recipient would continue to receive payments for approximately three and a half days.

Token vesting📊

Token vesting is the process of locking up a portion of tokens from the total circulation to be released on a specific schedule to stakeholders. Usual vesting periods can be anywhere from 12–48 months.

Token vesting is available to team members, partners, and investors as a way to distribute equity over a fixed time. Vesting funds ensures the core stakeholders cannot exit their position in a manner unfavorable to the overall liquidity and market price of the project token.

Token vesting is similar to payroll streams, but it gives users access to a few more features specific to vesting:

  1. Vesting Duration — You can select a start and end date & time for the vesting schedule. Token vesting has a fixed duration, unlike payment streams which include end dates according to the stream amount and release frequency.
  2. Setting Cliffs — Setting a cliff allows you to specify a date for a percentage of vested tokens to unlock immediately.
  3. Batch Payments — Batch payments are helpful for token vesting as you can create vesting contracts for all stakeholders simultaneously.

Scenario #2: NFT project vesting tokens with cliff date

Streamflow is the perfect solution for projects looking to distribute equity through token vesting. Let’s say you’re the founder of an NFT project, and would like to vest 10,000 tokens to an investor for a specific period but want 10% (1,000 X tokens) of total vested tokens to be immediately unlocked once the vesting contract starts streaming.

To achieve this, you can set the cliff date/time to the same value as the start date/time of the vesting period and set the release percentage to 10%. According to your release frequency (per minute, hourly, daily), 10% of tokens will immediately get unlocked and sent to the recipient once the vesting contract starts. The remaining amount streams to the investor at a constant rate for the remainder of the vesting period.

Benefits of Payroll streams

Although payroll streaming is a seemingly simple concept, it has widespread implications for the economy and employee satisfaction as a whole

For employers

If you use payroll streaming instead of direct deposit, you can greatly reduce your overhead costs for payroll. To put things in perspective: Sending a Stream costs less than $.50 to set up. Comparatively, direct deposit can cost anywhere from $50-$150 for each employee per pay period! Additionally, payment streams avoid the processing cost of recurring payments by only requiring one transaction.

Payroll streams also allow employers to operate with less working capital. For instance, you can send a stream of 4000 USDC/month even with 500 USDC in your wallet! However, the stream must be topped up before your wallet’s USDC balance reaches zero.

Payroll streams can also help you gain an edge in the market for web3 talent!

For employees

Payment streams allow for a continuous stream of value to recipients encouraging a capital-efficient workflow for both the employer and employee.

Streaming is vital to fixing the current payment model. Employees provide value to their company throughout the work week in real-time but do not receive compensation at the same rate.

More frequent payments also lead to happier employees overall. Jeffrey Pfeffer, the Thomas D. Dee II Professor of Organizational Behavior at the Stanford Graduate School of Business, reports:

When [people] think of their time in terms of money, the connection between income and happiness goes up and they become economic evaluators of their use of time in their life.

Pfeffer goes on to explain that hourly wages force employees to think about money, time, and happiness differently:

How organizations pay people has profound effects outside of that organizational context. If you’re paid by the hour, you come to see your time in a certain way that doesn’t change when you walk out of your employer’s door.

Since people are happier when they’re made aware of their hourly wage, it’s safe to assume that employee satisfaction would increase if they received their hourly wage straight to their account.

Everyone Wins

By substituting centralized payroll solutions for payroll streams, employers can substantially reduce their overhead while providing employees a better experience.

In turn, employers can increase their overall employee satisfaction and turnover rate. 🔁

The endless possibilities of streams🧪

Payment streams are still relatively new, and we are yet to see their full potential. Here are some of the potential applications of Streamflow:

DeFi — Automated investment strategies

Devs can build on top of Streamflow and integrate new uses for DeFi (Decentralized Finance), such as:

  • Staking funds as they are received.
  • Dollar-cost averaging into a particular asset.
  • Much more.

Vesting contracts secondary market

Building with Streamflow would allow you to establish a secondary market for token vesting streams. Imagine having the ability to buy an investor’s locked tokens for a project that interests you. The possibilities are truly endless.

Streaming to unlock fractional NFTs

Users can choose to direct streams to protocols like Bridgesplit to participate in the fractionalized NFT Market.

Subscriptions

If you’re a web3 entrepreneur, you can use Streamflows SDK to enable subscriptions for your products or services.

Build with us

Streamflow was built with developers in mind. We are working towards creating an extremely flexible environment, empowering builders to explore the boundaries of the payment streaming primitive. You can access our SDK here.

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