With a focus on gas efficiency and composability, 0xSplits has become the payment protocol of choice for some of web3’s most innovative and successful projects. Co-founder Abram Dawson speaks with Clovis McEvoy about the problems they set out to solve and the journey so far.
Blockchain technology is shaping a new financial landscape. Rapid, direct financial transactions have enabled a new generation of artists, builders, and communities to flourish. Yet, until recently, payment protocols tailored to the needs of small to medium sized projects have been conspicuously absent. This is the problem that 0xSplits set out to solve.
“0xSplits allow groups of people to programmatically split funds according to different rules,” says co-founder Abram Dawson. “You configure the rules, deploy the contracts, and anytime you want funds split according to those rules, all you have to do is send them to the contract.”
After exploring other splitter contract implementations, Abram felt there was promise that was not matched by actual usage. “We wondered why this was,” he says. “We started talking to users and learned that the current splitter implementations didn’t quite fit the needs for groups from 4 to 1000 people. We focused on building a solution for them.”
Their solution was to put a premium on gas efficiency, composability, and to ensure their protocol is independent of any third-parties by keeping everything onchain. They also set out to tackle the payment issues most relevant to the creative industries, such as splitting royalties from secondary sales and the ability to trade copyright between parties. Working closely with Songcamp, the web3 music-making platform, the company developed Liquid Splits, which uses NFTs to facilitate the transfer of ownership in a contract — a practice that is now commonplace in the music industry.
Since launching in February 2022, 0xSplits’ payment infrastructure has become indispensable for groups and individual creators alike, and has now been integrated into large scale visual arts marketplaces like SuperRare and 1stDibs, as well as music platforms such as Sound and Arpeggi Labs.
In parallel with the rapid adoption of Splits by major web3 platforms, Abram and the team have been rolling out a series of new contracts to cover core financial operations like Vesting Module and, more recently, Waterfall — a contract that allows funds to be distributed in a specified order. This latest contract is especially useful for projects that involve upfront costs for development or launch, with one party, like early backers, recouping their outlay before further revenue is distributed.
“Splits lower the barriers of getting some structure in place, which allows people to invest in the future.”
— Abram Dawson
Multi-recipient payments are not only essential for scaling up a group project, but they are also a foundational part of how innovation gets started in the first place. “All collaboration requires some amount of structure — be it loose social trust or strict codified rules,” Abram says. “Splits lower the barriers of getting some structure in place, which allows people to invest in the future.”
Getting that structure in place can be expensive, complex, and time consuming, particularly for organisations looking to get off the ground. For small scale creative projects, the value of which is yet to be realised, this can present an insurmountable challenge. By comparison, 0xSplits provides a cheaper, instant, and fully reliable alternative for distributing income. “Splits allows codified rules to be created for a fraction of the cost, allowing even the smallest projects to not only create structure, but to create structure that is credibly neutral,” Abram explains. “It can’t be influenced by any third party, which is unlike most other types of structure you can create today.”
“Splits allows codified rules to be created for a fraction of the cost.”
— Abram Dawson
Moving forward, Abram says that 2023 will see the launch of a number of new payment contracts and apps, and that the company is focused on making it easier for groups to manage onchain payments.
From vertical-specific apps that address a particular use case to foundational tools needed by the wider web3 community, 0xSplits’ overarching mission is to put programmable payments into the hands of innovators. The next step will be to see what new projects, organisations, and architecture those innovators will make over the coming years.
“Personally,” Abram says. “I’m most excited about what sort of creative structures will emerge when people begin to stack and combine these contracts with one another, to see what the community creates with these building blocks.”
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