<aside> 👋 gm – we'd love your feedback on this draft. Our goal is to provide an overview of how the protocol works. Please leave comments and questions, or join us in Discord.

</aside>

• Table of Contents

• Core Concepts

What is Splits?

Splits is a decentralized protocol for sharing onchain income. It is live for testing on Ropsten & coming shortly to Ethereum and other EVM-compatible chains. It’s an easy, composable, and gas-efficient way to split a onchain income with multiple parties. After a Split has been created (either via the website or calling the smart contracts directly), all you have to do is send ETH or ERC20s to the Split’s address. Each Owner is guaranteed to receive their portion. Since everything lives onchain, Owners don’t need to trust each other or any third party to receive their share.

When would you use this?

Splits are valuable whenever you want to allocate percentages of an income stream to different parties. DAOs are incredibly powerful coordination tools, but we believe they can be too heavy for many smaller project & forms of cooperation (especially when the work has already been done). We want to see onchain collaboration flourish and believe a composable, recursive, gas-optimized splitter with a simple UI is an important missing primitive in the space.

A project that would benefit from using Splits is a group working together to launch an NFT. The proceeds from minting and later royalties from secondary trades can be pointed to a Split’s address. Each Owner then receives their portion, designated at Split creation, of all future income. If the team's work was inspired by another project, they may also choose to make that project a small Owner in the Split as a way of giving back.

Another example might be a group of open source contributors who wish to receive onchain tips and donations. Rather than listing a single donation address and trusting one of the contributors to disperse the proceeds among the group, they may simply create a Split and have it receive the donations. All future donations will be automatically distributed amongst the contributors, without anyone having to lift a finger or operate in good faith.

Remember, each Split is just a smart contract and can interact with any other smart contracts on both the inflow and outflow. We’re excited to see what interesting use cases emerge within the community over time.

When would you not use this?

• Very large projects: Splits are designed for groups of people less than ~500. While you can stack Splits multiple layers deep (i.e. Splits that point to other Splits), you should make sure enough funds will flow through the Split to limit earnings lost to gas. The larger the group, the more you should consider some kind of rebasing token or perhaps a DAO.
• Single-use: Splits are designed to be gas-optimized when receiving streams of income over time. If the payout is expected to arrive in a single lump sum, a Multisend via a multisig may be more efficient.