Blockchain Papers

Ellie Rennie, Jason Potts

No abstract is available for this record.

Darren Shannon, Michael Dowling, marjan zhaf, Barry Sheehan

Non-fungible tokens (NFTs) rose to prominence as a wide-scale implementation of blockchain technology to support the emergence of crypto-asset markets. These nascent digital markets raise questions about the behaviours of investors in the digital economy and their appetite for risk. Using 28,919 auction listings, 4937 sales, and 30,197 Telegram messages, we conduct a field study on the bidding and selling behaviours of NFT investors in a Dutch auction system. We reveal risk-seeking behaviours in our sample of Dutch auction sales. We document that time pressures and value propositions significantly influence NFT investors: fast clock speeds and greater price separations induce underbidding behaviours and are associated with low value retention for sellers. These results are confirmed using a matched-pairs analysis. Our study raises further questions on the risk preferences of investors in emergent digital marketplaces. We propose value maximisation strategies for marketplace developers and participants, while drawing attention to the presence of potentially exploitable biases and heuristics amongst participants, courtesy of bidding incentivisation schemes significantly altering how investors value NFTs. • We identify the bidding and listing behaviours of NFT investors in Dutch auctions. • 28,919 listings, 4937 sales, and the sentiment of 30,197 messages are examined. • We identify risk-seeking underbidding behaviours from NFT investors. • Time pressures, value propositions, and market experience are influential factors. • Strategies are proposed for NFT developers and traders to maximise profit.

Oleksandr Letychevskyi, Volodymyr Peschanenko, Maksym Poltoratskyi, Olga Konnova

Blockchain and smart contracts have transformed the modern world.They help ensure security and trust in transactions, revolutionize finance, logistics, healthcare, and many other industries.Smart contracts are based on software code, so they can contain errors that lead to incorrect execution of the contract.Since the area of use of smart contracts is often related to finance, the cost of such errors can be quite high.Also, errors in smart contracts that have already been sent to the network cannot be corrected due to the immutable nature of the blockchain.This problem can be solved through smart contract code analysis, which allows developers to check the correctness of their code and protect it from possible errors and vulnerabilities. This article proposes the use of insertional modeling to analyze smart contract code for the Algorand blockchain. This blockchain is one of the fastest, low-cost, carbon-negative blockchains that has advanced smart contract capabilities with low transaction fees. The language used to create smart contracts in Algorand is called Transaction Execution Approval Language (TEAL).In this work, we review existing tools for TEAL code verification and describe the capabilities that each of them provides.Among these tools are Graviton, Tealer, Algo Builder/runtime.In this paper we describe the features of the TEAL language, as well as give examples of writing a smart contract using it.We offer our method for verification created smart contract.It consists in using the algebraic approach, which is implemented in the scope of the insertion modeling system to verify the smart contract code.This approach will allow us to check the smart contract code for some state reachability and deadlocks.

Carlos Molina-Jiménez, Sandra Milena Felizia

Abstract The use of computer technology to automate the enforcement of law is a promising alternative to simplify bureaucratic procedures. However, careless automation might result in an inflexible and dehumanized law enforcement system driven by algorithms that do not account for the particularities of individuals or minorities. In this article, we argue that hybrid smart contracts deployed to monitor rather than blindly enforce regulations can be used to add flexibility. Enforcement is a suitable alternative only when prevention is strictly necessary; however, we argue that in many situations a corrective approach based on monitoring is more flexible and suitable. To add more flexibility, the hybrid smart contract can be programmed to stop to request the intervention of a human or of a group of them when human judgment is needed.

Elmira Mohammadhosseini Fadafan, Rudolf Vetschera

Abstract We consider a situation in which two parties have concluded an efficient contract corresponding to one major bargaining solution. After the parties have agreed on one particular contract, an unanticipated shock may change the contract outcomes in a way that benefits one party but harms the other party. If this happens, they have the option to either stay with the original exchange contract or adjust some contract parameters such as the price. We propose a model to perform such adjustments automatically, to obtain the same bargaining solution as in the initial contract under the restriction that the new contract dominates the outcomes of the original contract. We study several bargaining solutions within this general framework. These bargaining solutions offer various sharing rules to distribute the benefit between the parties. To reflect practical considerations, we only consider adjustments made via one contract parameter (the price), while all other parameters result from the original contract and the random shock. To evaluate the efficiency of the proposed approach, we also compare it to a full re-negotiation scenario, in which all parameters can be modified within the boundaries resulting after the random shock. However, waiting and re-negotiation might be costly compared to the situation when the smart contract executes the adjustment automatically. Therefore, the automatic adjustment might be more efficient compared to the other types of contracts. We present several numerical examples and run large random simulations, which we also check statistically.

Abhinav Jain, Ehan Masud, Michelle Han, Rohan Dhillon · 8 authors

Due to the modern relevance of blockchain technology, smart contracts present both substantial risks and benefits. Vulnerabilities within them can trigger a cascade of consequences, resulting in significant losses. Many current papers primarily focus on classifying smart contracts for malicious intent, often relying on limited contract characteristics, such as bytecode or opcode. This paper proposes a novel, two-layered framework: 1) classifying and 2) directly repairing malicious contracts. Slither’s vulnerability report is combined with source code and passed through a pre-trained RandomForestClassifier (RFC) and Large Language Models (LLMs), classifying and repairing each suggested vulnerability. Experiments demonstrate the effectiveness of fine-tuned and prompt-engineered LLMs. The smart contract repair models, built from pre-trained GPT-3.5-Turbo and fine-tuned Llama-2-7B models, reduced the overall vulnerability count by 97.5% and 96.7% respectively. A manual inspection of repaired contracts shows that all retain functionality, indicating that the proposed method is appropriate for automatic batch classification and repair of vulnerabilities in smart contracts.

Eleonóra Bassi, Margherita Bandirali

In this chapter, the authors give a theoretical overview of the landscape of decentralized autonomous organizations (DAOs) as the native organizational structure of Web 3. The authors place this new formation in the existing theoretical framework of transaction cost economics and new institutional economics analyzing their governance from economic and legal perspectives. They argue that DAOs are so-called hybrid organizations, which embrace features from the free market and from hierarchical organizations. DAOs show characteristics of hybrids such as pooling resources, coordinating operations by contracts and facing competition in their coordination. However, their changing nature imposes challenges in their identification.

Zhenjie Yang, Linda Chelan Li

Decentralized court finance and personnel management practices have been criticized for breeding extra-judicial interventions and corruption in China. Determined to advance law-based governance and to constrain recalcitrant local leaders, the Chinese leadership under Xi Jinping in 2014 rolled out reforms to centralize local court finance to the provincial level with the aim to sever local courts from local influence. Despite high expectations, implementation is at best partial. Close to half of all provinces have not accomplished the required changes, and more than half of all court expenditure continues, to date, to remain reliant upon local governments. The direct reason is that provincial governments lack sufficient and sustainable fiscal capacity to finance the operation of local courts without central assistance. Different interests between major stakeholders, namely the courts and the fiscal bureaus, also add to coordination problems and difficulties in reform implementation, in particular the tension between fiscal adequacy pursued by the judiciary and fiscal management efficiency stressed by finance bureaus.

Yannick Gabuthy

A smart contract can be defined as a computer program, stored on a blockchain, which allows a transaction or an agreement—defined ex-ante—to be self-executed when some conditions are met, and without the need for a central authority to enforce it. Even if this new technology is very promising, it may face a challenge: the codified nature of smart contracts creates new types of disputes that require new mechanisms of dispute resolution, which are precisely based on the blockchain. The aim of this article is to analyze one of these emerging mechanisms, namely Kleros, which is a blockchain-based dispute resolution platform implying crowdsourced jurors whose incentives to make fair decisions are based on game theory. The Kleros case provides also a basis for a broader discussion on the future of the decentralized justice market.

Jens Gudmundsson, Jens Leth Hougaard, Chiu Yu Ko

When actions by one agent force another to deviate from their agreements with a third, “victim” turns into “injurer” in the chain’s subsequent steps. Should the chain’s initiator be responsible only for the direct harm they cause or also bear some of the indirect losses they trigger? Through an axiomatic approach, we characterize the class of fixed-fraction rules, which strike a balance between incentives for accident prevention on the one hand and fairness in terms of how liabilities are assigned on the other. Their simple design make the rules ideal for practical implementation through smart contracts, enabling automated conflict resolution. This paper was accepted by Manel Baucells, behavioral economics and decision analysis. Funding: J. Gudmundsson and J. L. Hougaard gratefully acknowledge financial support from the Carlsberg Foundation [Grant CF18-1112].

Д. Е. Богданов

Technodeterminism determines the main task for civil law when solving issues related to blockchain technologies and smart contracts. This task is connected with the search for answers to the question of the need to amend civil legislation in order to adapt it to new technological challenges or about the possibility of effective application of existing legal norms to the regulation of innovative civil relations. In the doctrine, there is a hypertrophied attitude towards blockchain and smart contract technologies. The standing exists that due to smart contracts, trust in people is replaced by trust in the code. Eschatological predictions were made about the beginning of the end of classical contract law, about emergance of «contract law 2.0». The paper states that the digital code will not be able to replace reality in the field of contractual relations. The revolution in contract law has not happened. Instead of the «revolutionary path» highlighted by some authors, there is a gradual evolutionary development of ideas about a civil contract. The civilistic doctrine has responded to technological challenges by becoming rhizomorphic in its interdisciplinarity, trying to comprehend the legal phenomena associated with the digitalization of public relations. The «ideological core» of the civil doctrine, the «core» of the concept of the contract, remained untouchable. A legal smart contract has remained a speculative phenomenon from a parallel reality, a simulacrum. The Russian and foreign doctrines are dominated by the traditional interpretation of a civil contract, since the concept of a legal smart contract is not able to solve the problem of its incompleteness. From the perspective of futurological perspective, it can be assumed that the traditional approach to the contract will retain its significance, and the digital code will have only an auxiliary, servicing value for the contract.

Cristina Argelich Comelles

Spanish Abstract: El presente estudio examina los smart contracts, la tecnología blockchain que los posibilita y la conexión del objeto del contrato mediante el Internet de las cosas. A estos efectos, se examinará doctrinalmente el concepto de smart contract, las aplicaciones de la tecnología blockchain en materia contractual, y la formación y ejecución del contrato, prestando especial atención al futuro papel del Internet de las cosas. English Abstract: This study examines smart contracts, the blockchain technology that makes them possible and the connection of the object of the contract through the Internet of Things. For this purpose, the concept of smart contract, the applications of blockchain technology in contractual matters, and the formation and execution of the contract will be examined doctrinally, paying special attention to the future role of the Internet of Things.

Alessandro Parenti, Marco Billi

While the general employment of smart contracts has seen growing interest lately, its application in the legal domain raised several concerns . One of the main issues is that these contracts are often written in computer code, thus are difficult to understand for the average person: this could undermine their enforceability before national courts .
\nThe present work proposes an approach for solving this lack of transparency: we shall compare and employ declarative programming languages that have already proven to bring helpful advantages when writing smart contracts , such as Logical English and LPS, both based on Prolog, as well as domain-specific imperative languages, such as Stipula , that allow for the codification of a smart legal contract both understandable for the average person and readable by the machine. 
\nWe will give an outline of the interplay between natural language and programming languages, and show how the lack of understanding reflects on the current employment of smart legal contracts. Fundamental to our reasoning will also be the distinction between B2B and B2C contractual relationships, where the EU principles of clarity and understandability of contract terms come into the picture. Moreover, we believe that uncertainty on whether the contract will execute the code as intended by the parties will negatively impact the trust that people place in such technology. 
\nWe will demonstrate a methodology for writing smart legal contracts in such a way as to improve both the understanding of their contents, by providing a direct transposition in code of the relevant clauses; and the intelligibility of their execution, by implementing the clauses directly, with no further coding required. This shall be done through Logical English, a programming language in which code is represented using a controlled form of the English language. Our intention is to showcase how to build trust in smart legal contracts, moving through a brief literature review of the proposed solutions, following with a demonstration of the drafting of the contract in a computable language understandable by legal experts and citizens alike. We shall utilize a running example to compare the methods we have applied, looking at the advantages, disadvantages and their effect on the overall explainability of the program.
\nTo conclude, we shall compare our results with the desired effect on transparency and see how these may help the general goal of bridging natural language and computer code, especially as far as consumer contracts are concerned. We shall test whether it is possible for the consumer to contribute to the execution process, moving from the written text directly to the computable code, thus strengthening the connection between the contracts and the automation. To reach a common standard, and employ this technology in the legal field, it is necessary to link all parties more closely, be they businesses, consumers, or legal professionals, by providing a way for all to communicate directly with the Smart Legal Contract.

Máté Frank

The aim of this study is to examine the issues of inserting smart contracts into our operative contract law. In this context, I am examining the positive and negative effects of this technological achievement on contract law, as well as its potential dangers. Smart contracts, like traditional contracts, require the consensus of the parties at the time the contract is concluded. The only difference is that the performance of the contract in the case of a smart contract is completely independent of the parties. This attribute could lead to the potential outcome that the application of performance and breach of contract rules in the Hungarian Civil Code–and as well in other continental civil codes–, could become inapplicable due to the lack of possibility of breaching the contract.

Ben Chester Cheong

No abstract is available for this record.

Andrea Stazi

No abstract is available for this record.

Anne Lafarre, Christoph Van der Elst

Blockchain and distributed ledger technologies are considered as transformative for corporate governance and enabling decentralized autonomous organizations (DAOs) that challenge hierarchical structures. However, legal, governance, and liability issues surround DAOs. Despite the aim for decentralization, practical implementation often reveals centralized elements. The chapter also explores blockchain’s impact on traditional corporations, emphasizing improvements in share issuance, trading, and decision-making. Blockchain can also address custody chain problems, enhancing transparency in securities and stock ownership. Yet, transitioning to blockchain, exemplified by ASX CHESS Replacement, is complex. While blockchain holds promise in fostering shareholder and stakeholder rights, a nuanced assessment of limitations and practicalities is crucial. More classical alternatives like secure and transparent centralized systems should also be considered in corporate governance.

Federico Ast, William R. George, Jamilya Kamalova, Abeer Sharma · 5 authors

Decentralized justice is a novel approach to online dispute resolution based on blockchain, crowdsourcing and game theory for adjudicating claims in a neutral and efficient way. Since the launch of the first decentralized justice platform in 2018, the field has attracted wide interest both from practitioners and academics in Web3 and dispute resolution. The decentralized justice approach is based on the ideas of decentralization, economic incentives and a claim to fairness in its decisions. At the current stage of development, decentralized justice is facing a number of technical, market, legal and ethical challenges for further development. This paper provides a review of the short history of decentralized justice, addresses a number of recurrent topics and lays down a path for future exploration.

Alan Moreira Lopes, Jurandir Peinado, Fernando Ressetti Pinheiro Marques Vianna, Francis Kanashiro Meneghetti

This article seeks to identify the main factors in adopting smart contracts and the way these factors are known and taken into account by Brazilian companies. Thus, we conducted 30 interviews among Brazilian businesses. Results confirmed the existence of an alignment among the perspectives of the characteristics, benefits and adoption factors for smart contracts. Also, it was possible to conclude that the practice of smart contracts is still incipient in Brazil, and the prospects for applying them in companies have been spurred by the health restrictions put in place by the combat against COVID-19.

José David Arenas Correa

Abstract The application of blockchain technology to contractual activity has led to a decrease in transaction costs, but also an enormous potential cost of judicial solutions that order reversal of the effects of smart contracts. This research addresses solutions, both from the perspective of updating the unforeseen theory and from clauses that are introduced to the legal smart contracts to allow reducing the costs associated with judicial decisions that declare an anomaly in the contracts.

Luane Nascimento, David Martins

This study aims to describe how smart contracts are made and the legal certainty of using them on business contracts. For this, the study concepted the smart contract, as well its characteristics and the difference between smart contract and e-contract. Itdescribed the legal certainty of smart contracts and how they can be used on business transactions. Besides, the research explained the importance of blockchain, ethereum and cryptocurrency inthe smart contract. At last, it describeshow smart contracts are applied in the legal universe and demonstrated their advantages as self-execution and clauses’ immutability. For this work, bibliographicresearch and deductive method were used. The study concluded that the inexistence of law causes legal insecurity which represents an obstacle to spread the use of smart contracts.

Youwei Huang, Sen Fang, Jianwen Li, Bin Hu · 6 authors

In recent years, research in software security has concentrated on identifying vulnerabilities in smart contracts to prevent significant losses of crypto assets on blockchains. Despite early successes in this area, detecting developers' intents in smart contracts has become a more pressing issue, as malicious intents have caused substantial financial losses. Unfortunately, existing research lacks effective methods for detecting development intents in smart contracts. To address this gap, we propose \textsc{SmartIntentNN} (Smart Contract Intent Neural Network), a deep learning model designed to automatically detect development intents in smart contracts. \textsc{SmartIntentNN} leverages a pre-trained sentence encoder to generate contextual representations of smart contracts, employs a K-means clustering model to identify and highlight prominent intent features, and utilizes a bidirectional LSTM-based deep neural network for multi-label classification. We trained and evaluated \textsc{SmartIntentNN} on a dataset containing over 40,000 real-world smart contracts, employing self-comparison baselines in our experimental setup. The results show that \textsc{SmartIntentNN} achieves an F1-score of 0.8633 in identifying intents across 10 distinct categories, outperforming all baselines and addressing the gap in smart contract detection by incorporating intent analysis.

Richard Holden, Anup Malani

This article examines the implications of Distributed Ledger Technology (a.k.a. blockchain) for several areas of law. While cryptocurrencies have received much attention, the implications of DLT are potentially far reaching. DLT raises interesting and important questions relating to rules of evidence, surrounding issues like hearsay and authentication. The advent of initial coin offerings has implications not only for how firms are financed but also for securities law in regulating such offerings. Cryptocurrencies themselves (e.g., Bitcoin) have raised serious issues for tax avoidance and taxation law. Relatedly, the rise of cryptocurrencies raises issues regarding the relationship between private and nationally issued currencies, and even the role and efficacy of monetary policy. Finally, DLT has practical implications for election law and voter turnout, with such technology already begun to be used for security purposes in online voting and permitted in 32 US states.

YE LIU

SpCon: Finding Smart Contract Permission Bugs with Role Mining This page can be best viewed at: https://github.com/Franklinliu/SpCon-Artifact. This artifact has been archived at the following permanent location: [](https://doi.org/10.5281/zenodo.6534218) We wish to apply for the availability, functionality, and reusability badges. Contents This readme first demonstrates how to quickly use <em>SpCon</em> to detect smart contract permission bugs with an example. Then, we provide details on the result reproduction procedures for the two experiments from the paper. Finally, we give an example to show how to reuse <em>SpCon</em> and its API documentation for potential reusability and integration in the future.