Thats not so much an effect as some good compositing and planning.
They probably shot a clean plate (no actor), the plate with the actor with the clay overlay mask (the pink hockey mask thing) and then the beauty pass with all the actors and action. They may have run a pass of her in a green screen mask so they can get Adams hands separately.
Then you track the actors face in the beauty pass, add in a the green screen separated hands over top of the real actor and match the move to the the clay reveal pass and do a bit of masking. The multi coloured layers of the peel back are probably layers of clay built into the flesh colored mask so that melt effect was actually done practically as he smushes the clay mask up.
I think I might have eliminated two steps by making the outer layer of clay green and letting the inter colors reveal through thereby making their own mask and keying Adams hands all at the same time, but they may have found in some tests that it was easier to blend in a flesh colored clay mask on to the real skin instead of fighting green spill and a keyer generated mask.