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How are streamable finances achieved?

EIP-1822 and ERC-777
Streamable finance leverages two blockchain standards in particular: the EIP-1822 and the ERC-777.
ERC-777 is a fungible token standard created to improve the existing ERC-20 standard. The standard introduces hooks, a function described inside of a smart contract. Hooks get called when tokens are sent or received through the contract. This allows a smart contract to react to incoming or outgoing tokens. The hooks described are registered and discovered with the help of the EIP-1822 standard.
Streamable Finance uses an extended version of the ERC-777. Tokens created with ERC-777 standard can be interacted with as ERC-20 tokens. ERC-777 is retro-compatible with the ERC20 standard and enables real-time finance capabilities by reading token balances via calculations instead of generic static mapping. This calculation is the sum of functions and static balances at any given time.
Streamable Finance introduces real-time finance and continuous settlements

Is the money flow actually streamed and settled or just calculated?

The flow is continuously settled. The money is flowing between senders and receivers. Every second the sender balance is decreased and the receiver balance is increased. The sender cannot access the assets that have flown out, while the receiver can. Therefore, the payments are continuously settled and balances are credited / debited at each block finality:
payment rate * (current block height - starting block height)
Incoming and outgoing flows are netted in real time