Introduction

In the DeFi space, transaction costs and liquidity efficiency have always been key challenges. Superposition proposes a bold solution: enabling users to earn native yield through transactions and leveraging an on-chain order book to facilitate liquidity sharing. This approach not only disrupts the traditional fee model but also opens new possibilities for both developers and users. As the first Layer 3 application chain specifically designed for DeFi, can Superposition deliver on its promises? Let’s take a closer look.

Superposition: A DeFi Layer-3 with Native Yield

Introduction to Superposition

Launched by Fluidity Labs in July 2023, Superposition is the first Layer 3 chain designed exclusively for DeFi. Built on Arbitrum One, it utilizes Arbitrum Orbit (a framework for easily deploying custom blockchains) and Stylus (which supports multi-language smart contract development, improving performance and reducing gas costs). Superposition aims to offer a low-cost, ultra-fast DeFi trading experience.

The core architecture of Superposition, known as the Super Layer, comprises Super Assets, the Longtail Order Book (Superbook), and Utility Mining:

• Super Assets: When assets are bridged to Superposition, they are automatically converted into Super Assets—yield-generating assets that offer returns whether held passively or actively used. These yields are derived from interest earned by lending the underlying assets. As more users adopt Super Assets, the protocol can even offer negative transaction fees—meaning the blockchain pays users to transact.
• Longtail Order Book (Superbook): Superposition uses a fully on-chain Central Limit Order Book (CLOB) model, allowing all applications within the ecosystem to share liquidity. This provides several key benefits:
  • Improved Capital Efficiency: By aggregating liquidity, the Longtail Order Book ensures capital is not left idle.
  • Solves the “cold start liquidity problem” for developers: Developers can tap into the Superbook’s liquidity from day one, accelerating the launch of innovative applications.
  • Market Fairness: Regardless of size, all participants can access the shared liquidity pool, ensuring a fair and efficient market environment.
• Utility Mining: This is an innovative incentive mechanism that allows Superposition and its DApp developers to distribute rewards and tokens based on user activity. It’s designed to boost user engagement and drive ecosystem vitality. \

In summary, Superposition integrates a native yield mechanism and leverages an on-chain order book to enable shared liquidity throughout its ecosystem, enhancing both capital efficiency and the user trading experience.

Superposition X Cover
(Source: https://x.com/Superpositionso)

Ecosystem Projects

The Alpha version of the Superposition mainnet launched in mid-January this year, and over 40,000 official commemorative NFTs have already been minted. To experience Superposition’s ultra-fast, low-cost transactions, users can first transfer assets via the official bridge and explore its growing ecosystem, which includes the following applications:

• DEX – Longtail: The first AMM built with Arbitrum Stylus and the native DApp on Superposition L3. All trading pairs are tied to Super Assets, ensuring that every trade is incentivized. Currently supports assets such as ETH, WBTC, USDC, and ARB. It is planned to evolve from an AMM into a fully on-chain Central Limit Order Book (CLOB).
• DEX – Camelot: Supports token swaps and liquidity mining. It has generated over $20 million in trading volume with Longtail.
• Domain Service – Meow.Domains: Converts wallet addresses into “.meow” suffix domain names, with prices starting at 0.0021 ETH (around $4). Over 10,000 domains have been registered so far.
• Prediction Market – 9lives: Developed by the Superposition team, this platform now features over 1,000 prediction markets, spanning market trends, sports, and business.

After about two months of operation, Superposition’s Total Value Secured (TVS) has surpassed $1.3 million, with total transactions exceeding 2 million. As more protocols continue to launch, the Superposition ecosystem is steadily expanding.

Diagram and Superposition Ecosystem Applications
(Source: https://superposition.so/mainnet-dapps)

3. Team and Funding

Superposition is developed by Fluidity Labs, the team behind the yield-generating protocol Fluidity. The team focuses on incentivizing users to actively utilize crypto assets. As a result, Superposition shares some connections with Fluidity, particularly regarding yield mechanisms and tokenomics. Core team members include:

• Alexander Baigent: Co-founder and CTO. He has been engaged in software engineering since 2013 and holds a degree in Corporate Finance from the University of Adelaide. He leads technical development for both Fluidity and Superposition. \

• Shahmeer Chaudhry: Co-founder. A graduate of the University of Adelaide, he was named one of Pakistan’s “Top 25 Tech Talents Under 25.” He has excelled in both game design and blockchain development. \

• Ivan Seara Nunes: Chief Product Officer. Currently pursuing a double degree at the University of Adelaide, he has over three years of experience in product development and strategy, focusing on team management and value delivery. \

Superposition’s yield mechanism draws inspiration from Fluidity’s Fluid Assets—a type of 1:1 pegged wrapped asset that rewards users upon usage. These rewards stem from the cumulative yield generated by depositing and lending the underlying assets through money markets, allowing users to earn additional returns through everyday transactions.

As of now, Superposition has not publicly disclosed its fundraising amount or investor list. However, according to its whitepaper, 20% of its token allocation is set aside for investors, indicating the presence of external funding. Notably, in October 2022, Fluidity successfully raised $1.3 million in a seed round led by Multicoin Capital, with participation from Circle Ventures, Solana Ventures, Lemniscap, and others.

Diagram: Fluidity Secures $1.3 Million in Funding, Led by Multicoin Capital
(Source: https://blog.fluidity.money/fluidity-announces-1-3-million-seed-round-led-by-multicoin-capital-943ee3fbe0e6)

Tokenomics

Superposition’s native token is $SPN, with a total supply of 10 billion tokens, all of which will be fully unlocked within four years following the Token Generation Event (TGE). These tokens are designated for purposes such as governance, liquidity mining rewards, and staking. After the initial four-year period, the DAO may authorize an additional issuance of up to 2% to support protocol growth and operations.

Fluidity ($FLY) Price Chart

In addition to $SPN, holders of Fluidity’s governance token $FLY also influence Superposition’s operations—for example, by voting on reward distribution across trading pairs. Moreover, additional revenue generated from Superposition’s trading activities will be shared with $FLY holders.

Price Trend of Fluidity ($FLY)

A New Benchmark for DeFi Application Chains?

Superposition is redefining the way blockchain technology is interacted with—not only by introducing account abstraction to lower the barrier for users, but also by offering additional rewards. The ecosystem is currently in an expansion phase and has integrated with projects like LayerZero, Conduit, and Hyperlane to enhance interoperability. Incentive mechanisms are being used to attract more users and developers. Growing community engagement can be observed through metrics such as the number of commemorative NFTs and domain registrations, suggesting the ecosystem has strong development potential.

However, as a DeFi-specific application chain, whether Superposition can gain market traction will depend on several factors: the smoothness of the user experience, the richness of the ecosystem, the availability of high-yield liquidity mining opportunities, and whether the ecosystem can generate significant wealth effects. Moving forward, key points to watch include whether Superposition can effectively consolidate liquidity through its order book to improve capital efficiency, and whether its innovative Utility Mining token distribution model can deliver meaningful and attractive returns to users.