Streamflow: Making Token Vesting Simple! A Deep Dive
Today we will be doing a deep dive into Streamflow, a platform that aims to solve the tedious process of Token Vesting & the other complexities involving the creation of a Token Vesting contract for projects as well as individuals!
Introduction📚
The crypto space is growing super rapidly 🚄 and it seems every other day we are hearing about a new project launch that aims to solve real-world problems, but what about solving the project’s own real problem? 🤔 Let me explain…
Multiple projects have seen the light of day in a crypto bull-run and have disappeared into an abyss during a bear-market. Do you know the reason? It can mainly been attributed to the team dumping their tokens & moving on. Also, teams dumping their tokens and rugging investors is a very real thing in the Wild Wild West of Crypto.
This is where Token Vesting enters the scene (will explain more in details below) and this is what Streamflow as a platform aims to solve.
The following deep dive will not only aim to cover everything there is to know about Streamflow, but we will also discuss the importance of vesting, cliff periods and use actual projects to understand the significance of Streamflow. The structure of the deep dive is as follow:
Table of Contents:
- What is Token Vesting? 🤔
- Why Token Vesting is IMPORTANT? ☑️
- Actual Project Token Distribution & Vesting Model 📊
- How does Streamflow ease the process of token vesting? 🤷♂️
- Utility of Streamflow to projects as well as individuals 🦾
- Detailed project research report of Streamflow 🔬
…
Understanding Token Vesting & Cliff ⏱
The term Vesting originates from the Latin word “vestire.” Putting it into more simpler terms, vestire refers to the act of putting an asset in the custody of a 3rd party.
I know the term VESTING might sound very crypto-native and leave you dazed 😵💫, but hold on, I will break it down to even more simpler terms. Token Vesting is nothing more than a Lockup period for project tokens that were part of an ICO (Initial Coin Offering), IDO (Initial Dex Offering) &/or a part of token allocation to the team/partners/venture capitalists.
Vesting can be further divided into two broad categories:
Linear Vesting: Under this method of distribution, tokens are released in a linear manner or simply put, released in equal parts.
For example, Project XYZ has vested 100,000 tokens for its team. Under linear vesting mode, 10,000 project tokens can be unlocked monthly, which will complete the entire vesting schedule over a span of 10 months.
Twisted Vesting: Under this method of distribution, tokens are unlocked in random parts within a particular time-frame.
For example, Project XYZ has vested 100,000 tokens for its team. Under twisted vesting mode, 20% of 100,000 project tokens can be released monthly for 3 months and the remaining 80% tokens can be released following a 9 months cliff.
I will cover both types of vesting methods with real-life project examples a little further down in the article.
“Ser, then what is Cliff?”
Cliff is nothing but a fancy term to explain the duration period of the vested tokens.
Now lets get to the more crucial question below:
So why is Vesting required? 😶🌫️
You see, every project needs some kind of funding 💰 to sustain, launch, grow and distribute. All of these things require liquid funds that can be deployed by the team on immediate basis. But where does this funding come from? They can come from multiple sources, but we will talk about the 2 most prominent sources of funding:
- Venture Capitalists &/or Partners
- Private sale rounds
Now, Venture Capitalists are the hardcore numbers people — they will invest in a potential project that would give them an absolutely explosive returns over their initial funding. But as most things in life, this initial funding comes in with certain conditions as well. A venture capitalist pouring in cash into a project team coffers demands some form of immediate return…this is where the project ends up allocating a percentage of their total available tokens to secure funding.
Lets take some hardcore data into account to understand better:
The above data has been taken from Mesari.io and it shows some prominent token allocations to different types of investor class:
- Public Sale
- Community Allocations
- Insiders (Venture Capitalist, Partners & Team)
- Foundations
For the purpose of our deep dive, we will focus on the 3rd investor class and the graph above represents the investor class allocation in pink (DO NOT quote me on the colour shade 🫠)
The perfect example for our study will be Internet Computer ($ICP) :
The above image says that Internet Computer had allocated 39% of their token supply to Venture Capitalists, Partners & Team. $ICP total tokens data:
Guess what happened when the tokens were listed on Centralised Exchanges simultaneously? 👇
As you can see in the chart above, $ICP dumped BIG TIME after the initial CEX listings and has lost over -99% of its value today since its listing price.
Brain Teaser for the day: Who could have dumped these tokens on listing, when retail had no access ⛔️to the project? 🤯
Yeah, it was the Venture Capitalists & Project Insiders! This entire massacre is to be blamed on an absolutely horrible token distribution model adopted by Dfinity (developer of Internet Computer) An excerpt below from Arkham Intelligence
“Our analysis has led us to believe that possible insiders connected to Dfinity have been dumping billions of dollars of ICP on exchanges at the expense of small early supporters and retail investors.”
So, could this have been avoided?
Absolutely. If the project team of $ICP had been more dilligent and deployed a proper token vesting schedule with a predefined cliff period & scheduled percentage unlock of the tokens — then this preventive measure would have absolutely saved the project from this ugly dump.
Need of Token Vesting from a Security POV :
Now that we have gained knowledge about Token Vesting and its relevance in modern day crypto space — Let us now try to see the NEED of Token Vesting through the lens of Cyber Security.
If past Security Breaches in the crypto space are revisited, the data will have you gasping for breath due to sheer volume of the funds lost FOREVER.
23rd March, 2022 witnessed the largest crypto hacks to have ever taken place in the historical existence of the Crypto space — A cumulative loss of $625 million in ETH drained from the Ronin network, crippling the Axie Infinity ecosystem.
So, how does Streamflow Token Vesting tackle the security risk?
- Automated Transaction: Streamflow has made the entire vesting process completely automated. The project team just needs to add the relevant data: Contract Address, Cliff Period, Release schedule and confirm. This automation ensures that the system releases the exact number of tokens to the correct wallet address, at the correct time and at the correct designated intervals
- Fast, Faster, Fastest ⚡️: Since the entire vesting schedule after creation on the Streamflow platform is handled according to the entered data, the smart contract ensures that token payouts are done at the predefined time without the requirement of further human intervention
- Saving the Money (through fees): If a token vesting schedule is created manually, then every transfer of tokens would incur a higher transactional fees — with Streamflow, since the entire process is happening through the Solana network, gas-fees are super low and so is the platform fee charged by Streamflow
Now that we have gone in-depth with understanding the benefits as well as security risk mitigation through vesting, we can move on to our next topic:
Understanding Token Vesting & Distribution Model through Real Projects:
All the above information leans more towards the theoretical side of things. Let us now take few examples of project with a solid token distribution model in place & how the actual token vesting of these projects look like.
Further, we should also be able to understand factors that influence the entire vesting schedule. We will include the following metrics for our Project Case Study:
- Tokenomics
- Token Distribution
- Token Vesting Schedule
Note: The projects I have selected below are on built on Solana, since Streamflow is available only to SPL tokens.
Project 1: Heavenland; Native token : $HTO (Twisted Vesting)
1.1: Tokenomics of $HTO:
1.2: Token Distribution model of $HTO:
1.3: Token Vesting Schedule of $HTO:
The above graph gives us a detailed look at the vesting schedule of the project. If we zoom-in and focus on the bar graph data of the Team tokens (represented in blue), we can see that the team tokens are locked for the first 18 months & the final unlock happens over a duration of 42 months. This is an example of a Twisted Vesting schedule.
Project 2: Serenity Shield; Native Token: $SERSH (Linear Vesting)
2.1: Tokenomics of $SERSH:
$SERSH will have a total supply of 100 million tokens, with an initial circulating supply of 25 million tokens.
2.2: Token distribution model of $SERSH:
2.3: Token vesting schedule of $SERSH:
- Investors get 25% unlocked with the initial release with a 4 month cliff period. 75% then unlocked via linear vesting over 5 months
- Team allocation gets 20% allotment unlocked with a 6 month cliff period. The remaining 80% allotment gets unlocked with a breakup of 20% token unlock every Quarter.
- Token allotment to Advisors have a 3 month cliff with a 15% initial release, followed by a linear release over 5 months for the remaining 85% of the tokens
- Private sale rounds have a 2 months cliff with 20% unlock at initial release, followed by a linear release over 5 months for the remaining 80% of the tokens
If you have all of the above details in hand, the Streamflow platform would not require any additional data from the end-user to setup the entire vesting contract, irrespective of how large the token unlock schedule could get.
How does Streamflow make Token Vesting easy 💻:
In my time spent researching on how a project enables token vesting, I understood the process is super technical and is usually achieved by manually adding the vesting data through a project’s smart contracts.
Streamflow comes in at full power and makes token vesting for projects as easy as buying Solana on a centralised exchange. No fuss, No complexities…just Easy-Peasy-Lemon-Squeezy 🍋. The most insane part behind this ease-of-use is that an individual can setup something so crucial like Vesting right from their smartphone 📲 (I will cover the whole working mechanism a little later)
The purpose behind creating Streamflow
Streamflow was created with the aim to provide the missing tools for Web3, for example, token vesting was quite a complicated task for other projects as there were no configurable tools that enabled Vesting for Solana SPL (Solana Program Library) tokens in a decentralised and secure manner.
Seeing the absence of the above tools , Streamflow introduced configurable token vesting contracts exclusive to SPL tokens, and created a Permissionless, Decentralised, Trustless SPL token vesting system.
Going a step beyond token vesting, Streamflow also introduced Payroll Streams where individuals and companies can easily stream payments to employees, freelancers, contractors etc. Users of the platform can even choose to create real time payment streams 🚀. Additionally, Streamflow is also going to introduce Batch payments setup as well as Multisig Vaults on Solana.
As per a discussion with MrSohail94#8701 on Streamflow’s Discord server, he gave the following information:
We are also going to launch multsig wallet to help DAOs and teams manage their treasury.
To give context: Multisig wallets require two or more keys to control the funds within the liqiuidty pool. No withdrawals can be done by a single key/user alone. In a larger working group, this comes in super handy for safety & security when things go south 🔐👮
Batch Payments- Users will be able to use this feature in both the vesting contracts and payment streams. Next, they are going to launch multi-signature wallet for treasury management. Users will also be able to create contracts and streams using multi-sig (not launched yet).
Token vesting contracts and Payroll streams are the main core products of Streamflow.
Vesting contracts are used to vest tokens to investors, teams, VCs, and community. These contracts are configurable and have unique features like cliff time release, email notifications, automatic withdrawal, and many more.
Payroll streams are used to stream payments to
employees, freelancers, contractors, service
providers, etc. Payment steams are also configurable with some uniques features.
How to achieve all of this in a jiffy?
The Streamflow app is super easy to use. It has all the necessary tabs and info capture system, which allows Project members to setup their Token Vesting schedule and teams/individuals setup Payroll Streams.
In my entire time spent on researching for this deep dive, one school-of-thought that has been common to all the available resource materials is how complicated the entire token vesting process actually is. So I will take this opportunity and demonstrate on how to initiate a token vesting schedule & payment stream contract right on my smartphone 📱…lets go 🚀
Quick Heads up for Smartphone users: Though you can access the Streamflow platform (app.streamflow.finance) on your smartphone from your mobile browser, you will not be able to connect your wallet through this method.
To successfully connect your wallet and use the platform, visit app.streamflow.finance through the built-in browser on Phantom and Solfare wallets to create (and interact with) vesting contracts and payroll streams.
Creating a Vesting Contract on Streamflow
Step 1: Landing Page & Wallet Connect
Self-explanatory and basic step to connect the wallet which holds your tokens you intend to start a vesting schedule or payroll stream from
Step 2: Setup a New Vesting schedule
In the above screenshot, there are some very basic details that need to be entered by the Vesting creator:
- Amount- Total number of tokens that will enter the Vesting contract. These tokens can belong to any project as long as they are SPL tokens
- Token- Type of token, could be a stablecoin like USDC or Streamflow’s native token $STRM (not yet launched)
- Recipient wallet address- Enter the wallet address that would receive the tokens. Make sure this wallet address does not belong to a centralised exchange
- Contract Title- Name that you are assigning to the vesting contract
- Start Date & Time- Period which you want the vesting to go live
- End Date & Time- Period which you want the vesting to end
- Recipient Email- Email notifications are sent out to the recipient when a vesting contract or payroll stream is created and also when the unlocked amount is withdrawn into the wallet (example image below)
Above image is an example of confirmation email shared on Streamflow’s Discord server by the project community manager.
- Release Frequency- Time interval you want the contract to release the tokens to the given wallet address. Frequency can be set in Second, Minute, Hour, Day, Week, Month & Year
- Cliff Date & Time- This is the time period when the initial percentage of tokens chosen by the user are released
- Release- The initial percentage of tokens to be released
Contract Cancelation & Contract Transfer permission- User is given an option by Streamflow to choose between Recipient, Sender, Both or Neither for both permissions
Overview- Based on the overall data entered as shown in the above screenshots, Streamflow gives the user a summary of what the Vesting contract will perform, at what given date, between what intervals and the end date. This makes it simple for anyone to understand and goes to show how Streamflow has successfully managed to create a platform, that it takes no more than 5 mins to setup a vesting contract right from your smartphone.
Streamflow Fees:
Before creating the vesting contract, Streamflow clearly mentions the fees they would be charging. These fees are over-and-above the Solana network fees.
The fees is a flat 0.25% and is charged on the principal amount being streamed. So if you have setup $100 release every month for 10 months, then Streamflow would charge 0.25% on $100 every time streaming takes place.
Creating Payments Streams on Streamflow
The process to create a new payments stream is exactly the same as creating a new vesting contract as explained above. One of the factors that changes while creating a Payment Stream is that there is no option to setup a Cliff Period.
Also, Streamflow provides the sender with the option to add more funds within an already active payroll stream. This is a super well-thought idea, since it will save the sender from the headache of creating a new payroll stream after exhaustion of the stream’s fund.
Transfer a payroll stream- I am an absolute fan of the transfer a payroll stream feature. Many a times while working on a project long-term, there could be unforeseen circumstances that might have a payment recipient want to change their receiving wallet address, and this can be easily achieved through Streamflow, even when a payroll stream is active.
Note: On transfer of recipient wallet address, the stream will transfer both the available funds as well as the unlocked amount that has not been withdrawn.
For example-
- Payroll stream has a total of $1,000 USDC
- The stream has already unlocked $100 USDC to the original recipient address
- Now, when the sender transfers the stream to a new recipient wallet address, the stream will move in entirety to the wallet address; which will include the unlocked amount of $900 USDC as well as the $100 USDC which was already released
Note: The last point is only valid if the $100 USDC has not been withdrawn from the original wallet. The recipient can choose to withdraw the $100 USDC before adding the new wallet address to the stream.
Streamflow Consolidated Dashboard
Streamflow has made navigation of the app auite a breeze. They have not only acheived to make a complicated process such as Token Vesting simple, but also kept the platforms UX very straightforward.
In the screenshot above, users have the option to check multiple data
- New Vesting- To create a new Vesting contract
- New Stream- To create a new Stream payment
- All Streams- Consolidated data on all active & expired streams
- Incoming- Streams that are due to be received
- Outgoing- Streams that are due to begin delivery
- Multisig Wallet- Coming soon & under development
Streamflow Devnet Mode 🧑💻
Developers & project teams can also experience Streamflow in Devnet mode. To access Devnet mode on the Streamflow app, a user will need to click on the dropdown menu of the connected wallet address to access the option. Check the image & GIF below:
The sandbox environment helps projects and individuals to get a basic feel of the platform before creating a contract and streams involving large sums of tokens on the mainnet.
Streamflow- A detailed project research report
In my project research report for your benefit to understand the fundamentals of Streamflow as a project and the utility it has to offer as a platform— I will cover the following points in details:
- Tokenomics of Streamflow 🪙
- Whitepaper & public information 📚
- Project Audit Report 🔍
- Team &/or Advisors 👭👫🧑🤝🧑
- VCs & Partnerships 🤝
- Unique Selling Points of Streamflow 🔦
- Community & Social Media presence 📱
Tokenomics of Streamflow 🪙
At the present moment, Streamflow has no native token as a part of its project offering. They have announced plans to launch $STRM token, but the tokenomics, launch schedule & other details are yet to be announced.
The team is busy at work on delivering the Multisig wallet feature. This feature is of high priority for the team, since the platform will become more appealing to a larger portfolio of projects who are operating within the Solana project ecosystem.
Whitepaper & Public Information 📚
The Whitepaper is not available online. On enquiring about the same on their Discord server, MrSohail94#8701 informed that the whitepaper was previously available on their website, but has been since taken down to be updated.
Streamflow Project Audit Report 🔍
Any project in the crypto space that has been audited is a huge win in my books. It helps to determine that the project team is serious about making crucial information public and also fixing any vulnerabilities that are brought up within the report. Audit for Streamflow was carried out by OpCodes
Going through the audit report, the information I could gather was that Streamflow took the report findings very seriously and patched multiple reported vulnerabilities.
Security Level of Streamflow was awarded a Good rating.
Summary of Vulnerabilities as per Op Codes:
Summary of Vulnerabilities found within Streamflow:
Overall, seeing the report findings in the above image, it is safe to conclude that Streamflow team took the necessary measures to have the risks mitigated.
The Streamflow Team 👫🧑🤝🧑
The team is not fully doxxed, so there is no LinkedIn profiles to check here. I have attached the teams avatars, names as well as their roles on Streamflow (source: project documentation)
Note: Names below are in the same order as the team avatars I have uploaded above.
- imprfekt (The Glue aka CEO)
- duleu (QA, automation & support)
- Angelo (BD, analytics)
- Markiz (design)
- lui (communications, content, community)
- Watson (software developer)
- MrSohail (community manager, support)
- Tokha (software developer)
Venture Capitalists & Partnerships 🤝
The below image will give you a brief overview of Streamflow’s backers ecosystem:
Unique Selling Points of Streamflow 🔦
After doing my thorough research on Streamflow and all its offerings, I would place the below points as USPs of the project:
- Making a complicated technical procedure simple, useable & accessible to projects as well as regular users
- Stream Payments is a super utility product and I can see a lot of projects using the feature to pay their freelancers through this
- Since Streamflow is a platform whose primary goal is to facilitate crypto transfers between wallets, built on Solana, it helps keep the transaction fees super low. A huge win for smaller projects & users (budget wise)
- Batch Payments are still in development. Token vesting contracts and Payroll streams are the main products of Streamflow. Vesting contracts are used to vest tokens to investors, teams, VCs, and community. These contracts are configurable and have unique features like cliff time release, email notifications, automatic withdrawal, and much more to offer.
- Payroll streams are used to stream payments to employees, freelancers, contractors, service
providers, etc. Payment steams are also configurable with some uniques features.
Speaking of batch payments, you will be able to use this feature in both the vesting contracts and payment streams. Next, they are going to launch multi-signature wallet for treasury management. You will also be able to create contracts and streams using multi-sig.
Social Media presence 📱
- Twitter- Currently at 4,210 followers, the team updates about critical updates there. Recent example being the Solana network’s “coordinated time” mismatch.
- Discord- Member numbers are not public on their server, but engagement is on the higher side. Channel segregations are well managed and it is easy to find the relevant resources if you know your way around Discord
Special Mention: MrSohail94#8701 (Community Manager) is super prompt with responses and directs a members question to the correct source, on or off the server 💯
- Medium- The blog on Medium has articles covering on how to use Streamflow and might be a good read for anyone to get some basic idea on the platform functionality and usability
- Podcast- Hosted on The Cove’s Spotify podcast channel, which focusses on Builders & Creators of the Solana ecosystem.
Conclusion ✍🏻
I have at large gone out and about to discuss the unique proposition of token vesting and why it is an absolute necessity for new projects coming into the crypto space, not only for security reasons, but also to protect the investors from team dumpings and vice versa.
Previously what was a cumbersome task is now been made easy by Streamflow and even allowed a user like me, with no coding & developer background to navigate and setup a Vesting contract on the Streamflow platform.
Unlike other crypto offerings that are operating more in the consumer centric space, like Play-to-Earn, DeFi protocols, Launchpads, Crypto Payment Solutions…Streamflow is a niche product offering aimed at being utilised mainly by projects with a solid token distribution model. The execution is super good and catering to projects on the Solana blockchain is a huge win already for the Streamflow team (in terms of handling TPS and low fees).
I am sure with the curiosity surrounding Streamflow, it is seen as a project that is operating in a non-cluttered space with virtually non-existent competition, the project with its offered utility has a super bright future and they are already ramping up their footprints with their partnerships.
Further more, the team is already busy working on their native token $STRM, which will surely have many takers in the space, owing to the unique use-case of project (This is not financial advice). I am also of the opinion that the introduction of a Multisig wallet and batch payment feature would make Streamflow a complete packaged offering with super utility coupled with ease-of-use.
These were my closing thoughts after doing my due dilligence on the product offerings and wrapping my head around the overall functionality of Streamflow in a modern crypto world.
Resources & Relevant Links:
Website: https://streamflow.finance/
Platform: https://app.streamflow.finance/
Data & Graphs
https://www.arkhamintelligence.com/icp
Token Model Project study:
Streamflow app screenshots & GIFs:
All screenshots taken on my personal device & GIF created through screen recording.
