Superfluid & Stakewise are among the leading cutting-edge web3 startups in their respective domains, how did they start? What obstacles do they face? How do they view the current market? How do they hire? Read through this deep dive conversation with their Co-Founders ZhiCheng Miao & Dimitry Tsumak, moderated by Tanya Chaikovska the Co-Founder of Salto X.

Tanya Chaikovska, Co-Founder Salto X:

Today we sit down with ZhiCheng Miao the founder of Superfluid & Dmitri Tsumak the founder of Stakewise to talk about the future of web3 and the process of building solutions in this sphere. I am Tanya Chaikovska, co-founder of Salto X. Salto X is building a solution that enables companies to give their economic upside to contributors in the fastest and easiest way possible. I want to applaud our speakers for joining us, it is one thing for founders to sit back and build their products, it’s another to put themselves out there and share their experiences to better their community.

Q: Tell us about yourself and your companies.

ZhiCheng Miao Co-Founder Superfluid:

Superfluid started three years ago, we develop a prototype with my co-founder, a solution on Ethereum where you can put Dai -a type of stablecoin- wrap it, and then you can redirect its interest to a different wallet, an interest redirection program. Then we turned the continuous aspects of the money into a company which now we call Superfluid. The name Superfluid comes from the physics phenomenon, where things like atoms move around frictionlessly. We want money to move around frictionlessly. Allowing the money to move a bit every second from every block from account to account, also allows mass distribution so from one account to any number of accounts frictionlessly at very low costs.

Dimitry Tsumak Co-Founder Stakewise:

I got especially excited about crypto the time I had problems with my bank and they arrested my account. I was working as a full stack engineer as a DevOp engineer, and I was looking to combine my knowledge in security and mobile computing with cryptography into something that could become a good product.

When Ethereum announced its new release, moving from proof of work to proof of stake, I wanted to become a validator. However, to become a validator you need to have 1k ETH, which was quite a large amount, so I thought to build a pooling system where people can pull their funds together to become validators and share the rewards proportionally to the amount of ETH they staked. That’s how Stakewise started.

I was working on it just in stealth mode as a hobby project for around two years. In 2020 I realized that the product became more mature and we need to focus on the financial part, that’s when I brought in my co-founder. At that time Stakewise was just pulling funds from the users. Fran and Miao from Superfluid were the ones to tell us that we have to look into the DeFi space, that’s when we transitioned from just a pulling system to a liquid staking protocol, which means that you stake your ETH, and you receive tokens that keep the interest grows in numbers while you hold it. That’s that part where you can actually go to some other DeFi project, you can utilise that token, you can increase your yields and you can do more fun stuff. We launched 2021 in march, and as of now, we have around 75 000 ETH staked on our platform.

Tanya Chaikovska Co-Founder Salto X:

Q: What are your biggest fuck-ups and biggest wins?

ZhiCheng Miao Co-Founder Superfluid:

We had a security breach a while ago, and luckily we recovered. I think the solution we’re building is very noble, as I come from a computer science background I care a lot about the correctness of the program. However, in this space there is a general nobility, there’s also a trade-off you need to make in terms of when to release a product. Since the space is so young, it takes a long time to ensure the security of your product, but we can’t afford to develop a product for three years waiting for 0 issues.

We already have a live product, so we can develop a more mature framework meanwhile and keep the current implementation going, we can afford to do deeper research into how to make our program more secure while keep innovating in new technologies.

As for the wins, I think fundraising is great and well we hired a lot of great people, we are a distributed team of almost 20 people. We built two developer community support projects, Superfluid reactor our program that supports people building new companies on Superfluid to raise funds. We are building the ecosystem to make superfluid a general payment technology that enables others to succeed, so it’s not only about us, but about the people that can succeed on Superfluid.

Dimitry Tsumak Co-Founder of Stakewise:

Our mess up was the time we went to market, we were the second ones to go live on the Ethereum staking side. Because it took a while for us to do the security audit for our smart contracts, which started in early December and it lasted until the end of January due to the holidays, along with multiple updates to the contracts and reviews. We lost a bit of momentum, then we had to catch up to our competitor in the number of integrations and the amount of e-stake. I think that was our biggest fuck-up.

Similarly to Superfluid, our greatest win is that we are well funded and we can hire more people so we can keep building. Of course, we try to minimize mistakes by being vigilant about what we build, that’s very important because building something wrong costs you money, so you have to be careful, and think about what you want to focus on. Our team is 10 people right now, but we are quite experienced in different fields starting from content to smart contracts, and we are looking now for a designer because we want to build the next version of our UI.

Tanya Chaikovska Co-Founder Salto X:

Q: What kind of advice can you give the web3 community based on what you’ve learned from your fuck-ups?

Dimitry Tsumak Co-Founder Stakewise:

It’s pretty hard to build something, build it fast and with no fuck ups. It’s always a chance that you have to take, you can minimize it by proper testing, by spending a lot of time on test nets, and thorough audits. But in general, there is no kind of path that is 100% protected from fuckups, you can always minimize this through insurance protocols that can ensure your users to make sure that their tokens are not stolen or they don’t lose their funds. Also, the more eyes you get on your code the better your chances are to reduce fuckups.

ZhiCheng Miao Co-Founder Superfluid:

Compared to two years ago when our project was starting, the tooling in the Ethereum environment definitely has matured and better fuzzing tools. If you are really patented, you can even use some of the formal verification frameworks, but your code base might not be ready for that. Bug bounties are also an option, we currently have a 100k bounty for a critical bug. Insurance could be a way but I don’t see any good options yet. Also, note that some developers are more trained regarding how to write good tests and good fuzzing-based tests or quick checks or whichever type of test you think is good for you.

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Tanya Chaikovska Co-founder of Salto X:

Q: With the state of the market, did you change your strategy? Did you have to stop hiring or cut costs?

ZhiCheng Miao Co-Founder Superfluid:

It’s very difficult to look beyond a few months at a time. Because, as you may see, the market itself is not very clear in terms of whether is it really a bear market, or is it just uncertain. So we definitely don’t put a super bullish view, like six months before intense when it comes to hiring for the developer-related resources but at the same time, we’re not into the deep bear market territory either so there’s some adjustment but I wouldn’t say it’s drastic.

Sometimes we have to adapt to the fact that not everyone is adapt to the streaming payment paradigm, especially if you talk to an accountant, they will scratch their head “what do you mean every second someone receives money? it doesn’t compute!” so we have to come up with a walk around, and at the same time fit it into our technology without breaking away too much from our way. To wrap the experience as close to the existing workflow as possible but without creating entirely new technology.

Dimitry Tsumak Co-Founder Stakewise:

Not much changed for us except for our liquidity pool, which got a bit more liquid. We have a staking derivative that should be one-to-one with ETH, but because there is no way you can withdraw ETH from F2 without a secondary market, and because of the bear market there was a bit of a discount for our token, so we were selling it for like a five percent discount for some time. As a company, we continue existing, we continue hiring, and we continue building.

Tanya Chaikovska Co-Founder Salto X:

Q: Which web3 solutions do you believe will die very soon?

ZhiCheng Miao Co-Founder Superfluid:

The good thing about open source technology is that a lot of things developed in web3 space will exist so long as they have some sort of value, they will exist as code, even if they haven’t found a product market fit. What would definitely die is a project that can be created over the weekend, whereas a project that takes years to develop and even if the time is not right, and thanks to the nature of the open source, I think they will exist one way or the other if not as a company but as a technology.

Tanya Chaikovska Co-Founder Salto X:

Q: What web3 products are on your watch list?

Dimitry Tsumak Co-Founder Stakewise:

Superfluid, I’m following them every day that’s for sure. Mostly I’m following projects we plan to integrate with, looking for their code that’s probably the top 10 DeFi projects out there, landing protocols also call strategies, and some other projects specific to the staking space like different operators and how they perform like the development of Ethereum.

But in general, I think there are especially interesting projects on the infrastructure level. More and more talents join the infrastructure level. More and more interesting solutions are emerging there, cool cryptography solutions like ZK and roll-ups. Of course, there is the NFT space, unfortunately, I’m not following a lot because there are not many intersections between staking and NFTs.

Tanya Chaikovska Co-founder Salto X:

Q: How do you hire? Who do you hire? Is it important for you that a candidate have web3 experience?

Dimitry Tsumak Co-Founder Stakewise:

First, it depends on the role, for a solidity developer we would really look at how they work, and what experience they have in blockchain. As for any other field, we first look into the expertise in that specific area, being front-end back-end, or a specific language. Secondly, what drives the candidate’s interest in that field, is it just because of money, or is it a passion for the field and belief in its future? Of course, there are other factors, like how they fit into the team, their location, what’s the time zone difference.

ZhiCheng Miao Co-Founder Superfluid:

The most important thing is the cultural aspect fit, in terms of web3 culture to first believe in what it stands for in the longer term, especially that in the bull market you might get people that simply believe in the short-term opportunity, in a slightly less bullish market you tend to get a better selection in a sense.

I don’t emphasize hiring people with the existing web3 experience, sometimes I would even think it is baggage, especially for people who start their curriers in web3, I find it makes a very limited world view. Especially for a senior position, I prefer a more diverse background, as long as they come into the industry because they really believe in the future of web3.

From the practical side, sometimes people may think that we can hire from any time zone, but in practice, it’s very difficult, especially now that we have more of a remote team. Even though there are a lot of talented people from other sides of the world. So that’s something that I was hoping that the European side can have more talent.

Tanya Chaikovska Co-founder of Salto X:

Q: Dimitry, You mentioned philosophy culture around web3, what are the demands that your contributors have for you, do they want you to become more decentralized do they want you to turn into a DAO?

Dimitry Tsumak Co-Founder of Stakewise:

We are a DAO already, we are governed on-chain with our token SWISE. There are a lot of initiatives from the users, it’s just a matter of filtering out the ones that are more important. For example, right now, we are transitioning into the post-merge version, we listed different options that the protocol can take and there were many different interesting opinions that were proposed by the users or by projects that are outside Stakewise, so you become a large team with the contributors from your community.

ZhiCheng Miao Co-Founder of Superfluid:

Okay, first a joke “decentralization is the future so we’ll do it in the future”

I think there are difficulties and in our case, we do have to push the solutions since not all businesses value the aspect of the movement, so sometimes we need to take a more practical approach. But the fact that we’re hiring people that are in the web3 culture in general, makes it so that we have a general alignment internally in the company, about having decentralization as a goal no matter how long it takes, that’s the goal we are working towards, that’s not something that we’ll forget about.

Q: What are the biggest challenges for you when building web3 solutions while governments are changing their regulations all the time?

Dimitry Tsumak Co-Founder Stakewise:

I think decentralization is the key, the more decentralized your solution is the more it can exist without the government intercepting it by shutting down your back or front end, you can deploy your front and IPFs or fully run on a smart contract, it’s pretty hard for someone to shut down your project because it’s popular people are gonna find it, people are gonna use it or people are gonna redeploy it in case it stops working or it needs upgrades. I think it’s building the community, being decentralized and engaging the community and just trying to build as better solutions as you can.

ZhiCheng Miao Co-Founder Superfluid:

I have long thought about this, my personal view on it is that what we don’t like, is a monopoly on the regulation, not that we don’t like regulation. We understand the need for regulation but not necessarily by the government, but if we don’t regulate then the government will and they will take the default power. So I think we should do better as a community to provide a better system that everyone can thrive in, we should do better at making our environment more healthy and more inviting for more people to join so that government doesn’t have a reason to regulate.

Q: Do you guys plan to go to Tennessee or Wyoming? Since they are the first to legalise DAOs, do you consider registering your DAO there?

Dimitry Tsumak Co-Founder Stakewise:

I completely support any government’s adoption of anything related to web3, Especially DAOs and as we are a DAO we definitely want to explore opportunities to legalise ourselves, I hope the Estonian government will follow in legalising DAOs. I see a huge value in DAOs, openness, the community participation. If you build it properly you can basically have users work for the product itself because they use it, they see the parts that need improving, and it’s pretty hard to do that in a normal company.

ZhiCheng Miao Co-Founder Superfluid:

I think all these kinds of legal tourism are interesting to follow, but I take a bit more conservative approach of “wait and see.” I wouldn’t be the first to make that step, it would take time, so maybe it will take a couple of years to see what happens.

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