Yustynn Panicker, Ezekiel Soremekun, Sudipta Chattopadhyay, Sumei Sun
Smart contracts are increasingly used in critical use cases (e.g., financial transactions). Thus, it is pertinent to ensure that end-users understand the transfer risks in smart contracts. To address this, we investigate end-user comprehension of risks in the most popular Ethereum smart contract (i.e., USD Tether (USDT)) and their prevalence in the top ERC-20 smart contracts. We focus on five transfer risks with severe impact on transfer outcomes and user objectives, including users being blacklisted, contract being paused, and contract being arbitrarily upgraded. Firstly, we conducted a user study investigating end-user comprehension of smart contract transfer risks with 110 participants and USDT/MetaMask. Secondly, we performed manual and automated source code analysis of the next top (78) ERC-20 smart contracts (after USDT) to identify the prevalence of these risks. Results show that end-users do not comprehend real risks: most (up to 71.8% of) users believe contract upgrade and blacklisting are highly severe/surprising. More importantly, twice as many users find it easier to discover successful outcomes than risky outcomes using the USDT/MetaMask UI flow. These results hold regardless of the self-rated programming and Web3 proficiency of participants. Furthermore, our source code analysis demonstrates that the examined risks are prevalent in up to 19.2% of the top ERC-20 contracts. Additionally, we discovered (three) other risks with up to 25.6% prevalence in these contracts. This study informs the need to provide explainable smart contracts, understandable UI and relevant information for risky outcomes.
Bitcoin gained significant popularity starting in 2017, when the price soared from around $1.000 at the beginning year to nearly $20.000 in December. The aim of this research to analyze the factors of investment in bitcoin in Indonesia. The population of the study is individual who invest in Bitcoin. The sample is purposive with 140 valid respondents from social media bitcoin group. The research used quantitative with online survey, distributed during September to November 2022. This study found that the facilitating conditions, compatibility, trust, power prestige, and retention time positively influence the investing intention in Bitcoin. Awareness does not have significant effect on investment intention. Gender does not moderate the facilitating conditions, awareness, compatibility, trust, power prestige, and retention time with intention to invest in Bitcoin. This study concludes that investors prefer Bitcoin due to facilitating conditions, compatibility, trust, power prestige and retention time. It implies that the provider should pay attention more on facilitating conditions, compatibility, and retention time of the Bitcoin investment in their platform
The world has undergone important technological transformations, making commercial transactions move from normal to electronic and linked to the real world. Still, the new generation of the Internet led to the emergence of the Metaverse world, which attracted many companies and governments, including the UAE, to pay attention to and invest in it. It is based on the use of Blockchain and Artificial Intelligence. This has affected the commercial activities of companies, as it has made contracts done smartly. Its subject will be non-fungible tokens, which is the subject of the study that emphasized the leadership of the UAE government and companies in its interest in the technologies of the Fourth Industrial Revolution and the world of Metaverse and its legislative exclusivity in regulating virtual assets and encrypted tokens and the intelligent agent, but that remains insufficient to control transactions in the Metaverse world.
Falk, Brett, Tasneem Pathan, Andrew Rigas, Gerry Tsoukalas
In this note, we examine voting on four major blockchain DAOs: Aave, Compound, Lido and Uniswap. Using data directly collected from the Ethereum blockchain, we examine voter activity. We find that in most votes, the "minimal quorum," i.e., the smallest number of active voters who could swing the vote is quite small. To understand who is actually driving these DAOs, we use data from the Ethereum Name Service (ENS), Sybil.org, and Compound, to divide voters into different categories.
The advent of blockchain technology and its adoption across various sectors have raised critical discussions about the need for regulatory mechanisms to ensure consumer protection, maintain financial stability, and address privacy concerns without compromising the foundational principles of decentralization and immutability inherent in blockchain platforms. We examine the existing mechanisms for smart contract termination across several major blockchain platforms, including Ethereum, BNB Smart Chain, Cardano, Solana, Hyperledger Fabric, Corda, IOTA, Apotos, and Sui. We assess the compatibility of these mechanisms with the requirements of the EU Data Act, focusing on aspects such as consumer protection, error correction, and regulatory compliance. Our analysis reveals a diverse landscape of approaches, from immutable smart contracts with built-in termination conditions to upgradable smart contracts that allow for post-deployment modifications. We discuss the challenges associated with implementing the so-called smart contract "kill switches," such as the balance between enabling regulatory compliance and preserving the decentralized ethos, the technical feasibility of such mechanisms, and the implications for security and trust in the ecosystem.
G. Zhang, Alexander J. Sannella, Gerard Brennan, Muhammad Talha Afzal
• Proposing a dynamic valuation framework for fair value estimates for illiquid cryptocurrency. • Discussing compliance with fair value accounting standards and cryptocurrency reporting requirements. • Factoring in comparable assets’ market information and news big data analytics that measure market participants’ attention and sentiment in the valuation framework. • Empirically testing the valuation framework with historical market data. • Developing a machine learning valuation model that achieved 87 % prediction accuracy. To address the need for reporting and disclosure of cryptocurrency holdings in compliance with the FASB guidance for the use of fair value measurements for cryptocurrency (FASB, 2023), this paper develops a modeling process for reporting entities to measure the market value of cryptocurrencies with limited or no observable transactions. In this valuation model, we consider the last observable market information with time decay, its comparable assets market index, and dynamic real-time market participants’ sentiment and attention. Notably, the application of exogenous variables allows us to maximize the observable inputs in measuring fair value, such as asset classification based on economic traits and market participants’ attention and sentiment measurement with online media textual analytics. We propose a valuation framework and construct a prediction model that can achieve a prediction accuracy of 87 % on target asset resurging prices.
Blockchain for local communities are blockchain-based applications that support the participation of people in the social and economic life of their local community. These applications leverage tokenization to enable socio-economic processes involving transactions of values where community members take part actively and intentionally. In this field, mechanisms that regulate the functioning of blockchains need to be redirected towards collaborative and social purposes that often differ from the logics on which mainstream cryptocurrencies are based. In order to redesign these mechanisms, sound examination of their system of tokenization and of dynamics of their token economy is required. This paper provides an exploratory review of token economy elements found within cases of blockchain for local community economies, which is an under-explored domain in the relevant literature. The analysis considers 9 projects for systems that incentivize or reward participation, or implement community currency schemes. The dimensions analyzed encompass the type of goals and communities, the blockchains adopted, and token economy design aspects such as: token types, their distribution and incentive mechanisms, the associated platform/wallet functionalities, and the project governance models. We have observed a variety of combinations of these elements being used to facilitate new forms of value circulation. However, there is a tension between the aspiration to introduce transformative systems and the need to ensure the stability of the economic framework. The highly experimental nature of these initiatives requires continuous monitoring of their emergence and development.
We investigate cryptocurrency participation within the context of Regulatory Focus Theory (RFT) among 1,519 individuals in Denmark, Finland and Sweden. Analysis of survey responses identifies the tendency for promotion-focused investors to gravitate towards the high-risk, high-reward potential of cryptocurrencies, while prevention-focused investors adopt a more cautious approach that prioritizes safer assets. Our results which demonstrate that RFT can be used to predict current and future cryptocurrency participation contribute to understanding the profile of participants in the rapidly growing cryptocurrency market.
Despite widespread academic and practitioner interest in non-fungible tokens (NFTs) as a form of digital assets, little is known about how consumers perceive NFT value. This exploratory research investigates why people create, trade or collect NFTs, what value they derive from them, and how online communities contribute to value co-creation. Over the course of two rounds, we interview 38 participants, most of whom are digital natives. We find that engaging with NFTs is the new form of day trading, reflecting financialization of everyday life. The value of NFTs is mainly speculative and utilitarian, and NFTs themselves are best thought of as derivatives. Value co-creation in NFT project communities is largely focused on gaining superior information about the project. We contribute to the crypto-marketing and web3 literature by advancing a novel model of NFT consumer value that extends Holbrook's (1999) typology and distinguishes both positive and negative aspects of consumer value that have been overlooked in mainstream literature. We shed light on the role of communities in an unusual setting: a nascent, illiquid, speculative, informationally opaque market for digital assets. Our study helps creators and brand managers to develop effective NFT strategies.
Natalia Dashkevich, Steve Counsell, Giuseppe Destefanis
The complexity and interconnection within the financial ecosystem demand innovative solutions to improve transparency, security, and efficiency in financial reporting and liquidity management, while also reducing accounting fraud. This paper presents Blockchain Financial Statements (BFS), an innovative accounting system designed to address accounting fraud, reduce data manipulation, and misrepresentation of company financial claims, by enhancing availability of the real-time and tamper-proof accounting data, underpinned by a verifiable approach to financial transactions and reporting. The primary goal of this research is to design, develop, and validate a blockchain-based accounting prototype—the BFS system—that can automate transformation of transactional data, generated by traditional business activity into comprehensive financial statements. Incorporating a Design Science Research Methodology with Domain-Driven Design, this study constructs a BFS artefact that harmonises accounting standards with blockchain technology and business orchestration. The resulting Java implementation of the BFS system demonstrates successful integration of blockchain technology into accounting practices, showing potential in real-time validation of transactions, immutable record-keeping, and enhancement of transparency and efficiency of financial reporting. The BFS framework and implementation signify an advancement in the application of blockchain technology in accounting. It offers a functional solution that enhances transparency, accuracy, and efficiency of financial transactions between banks and businesses. This research underlines the necessity for further exploration into blockchain’s potential within accounting systems, suggesting a promising direction for future innovations in tamper-evident financial reporting and liquidity management.
Christopher De Baets, Basem Suleiman, Armin Chitizadeh, Imran Razzak
In the growing field of blockchain technology, smart contracts exist as transformative digital agreements that execute transactions autonomously in decentralised networks. However, these contracts face challenges in the form of security vulnerabilities, posing significant financial and operational risks. While traditional methods to detect and mitigate vulnerabilities in smart contracts are limited due to a lack of comprehensiveness and effectiveness, integrating advanced machine learning technologies presents an attractive approach to increasing effective vulnerability countermeasures. We endeavour to fill an important gap in the existing literature by conducting a rigorous systematic review, exploring the intersection between machine learning and smart contracts. Specifically, the study examines the potential of machine learning techniques to improve the detection and mitigation of vulnerabilities in smart contracts. We analysed 88 articles published between 2018 and 2023 from the following databases: IEEE, ACM, ScienceDirect, Scopus, and Google Scholar. The findings reveal that classical machine learning techniques, including KNN, RF, DT, XG-Boost, and SVM, outperform static tools in vulnerability detection. Moreover, multi-model approaches integrating deep learning and classical machine learning show significant improvements in precision and recall, while hybrid models employing various techniques achieve near-perfect performance in vulnerability detection accuracy. By integrating state-of-the-art solutions, this work synthesises current methods, thoroughly investigates research gaps, and suggests directions for future studies. The insights gathered from this study are intended to serve as a seminal reference for academics, industry experts, and bodies interested in leveraging machine learning to enhance smart contract security.
Anak Agung Gde Agung, Irna Yuniar, Kastaman Kastaman
After more than 200 years of dependence on refined petroleum fuels, currently countries in the world are starting to switch to battery-based electric vehicles (EV). Apart from being considered cheaper in operational costs, EV technology is considered mature enough for mass use. The battery is one of the core components for EVs, which contributes to around 40% of the production costs of the EV itself. For this reason, EV producing countries and battery manufacturing material providers are competing to secure the material supply chain and battery processing installations. Another reason for the need to secure the battery supply chain is that the materials used to make EVs come from mining materials which have the potential to pollute the environment and be dangerous to health. For this reason, a recording and tracking mechanism is needed in the battery supply chain, starting from raw materials to reuse/post usage. Blockchain through smart contracts can handle this problem. Smart contract applications running on blockchain have immutable and traceable properties, two properties that are critical points in the supply chain. Blockchain also has transparent and secure properties, so that even though only defined parties can interact, supply chain data can be seen by users. The solution and output target for this Community Service activity is to adapt the smart contract that was created in previous research with the partner's business process, and test the performance of the smart contract directly. By implementing this smart contract, it is hoped that partners will have more competitive advantage in the electric motorbike conversion workshop ecosystem
This academic paper delves into the intricate legal dimensions of smart contracts within the context of traditional contract law, tracing the evolution of smart contracts, their intricate linkages with blockchain technology and ethereum, and their thriving applications in diverse fields such as finance and supply chain management. Using a combination of literature review and comparative analysis, this study not only highlights the multifaceted advantages offered by smart contracts, such as automated execution capabilities and greater security, but also provides insights into the legal challenges they pose. These challenges contrast with the principles of traditional contract law, including the dilemmas of the legal nature of smart contracts, contracting, performance, and modification and remedies. To reconcile these differences, this paper argues for a set of innovative solutions. These include the adoption of the integration of multi-signature protocols to enhance mutual agreement, the strategic involvement of governmental oversight to ensure regulatory compliance, and the implementation of hybrid models that synergize on-chain functionality with off-chain operations. Through this comprehensive analysis, the paper aims at forging a path towards coordinating the dynamic capabilities of smart contracts with the established tenets of contract law, thereby unlocking their full potential in a legally compliant.
Abstract Decentralized finance (DeFi) has emerged to offer traditional financial services such as lending, borrowing, and trading without intermediaries (e.g., banks). DeFi transactions are typically executed using a special digital class of contracts called smart contracts. These contracts are self-executing and hard-coded directly on a blockchain. We observe the emergence of a new class of voluntary audits that evaluate the integrity of these contracts. Using a hand-coded sample of about 8,500 smart contract audit reports, we provide some of the first evidence showing that (1) these audits are pervasive, (2) the audit firm market is composed of new technical audit firms, (3) the scope of these audits can span a variety of contract features, (4) the audit inputs and outputs differ substantively from those of conventional financial audits, and (5) the market reacts positively to the release of these audit reports, suggesting that these reports are value-relevant. These findings highlight the demand for novel assurance services driven by blockchain technology.
In this era of rapid development of online transactions and platform economies, many companies operate as intermediaries between Party A and Party B in transactions and gain profits from every transaction. The "middleman", that is, the intermediary, mainly introduces Party A's resources in the form of a platform and allows more users to see and understand Party A's resource information. Platform users, that is, Party B, can save them from searching for the resources they want during the intermediary's promotion and introduction. time cost; however, some intermediaries take advantage of the process of transferring Party B's money to Party A as an intermediary and use some unfair means to obtain profits that exceed their original gains in the transaction as an intermediary, thus causing information between Party A and Party B. Asymmetry creates ambiguity, leading to serious problems in transactions. In this work, we will discuss the advantages of the decentralized sharing economy. Furthermore, this paper will focus on analyzing the shortcomings of intermediary operations in contemporary society from the perspective that intermediaries need to spend a lot of time and economic costs to establish credibility, the lack of intermediaries which are controlled artificially, and the friction of platform p2p transactions. Targeting the above three aspects, the paper will also explain and analyze the operating model of Ethereum to demonstrate that Ethereum is a better online transaction model that can replace the artificial intermediary model in contemporary times.
The present study discusses how adopting cryptos affects financial inclusion in developing economies. Primary constructs like Financial Inclusion (FI), Perceived Economic Empowerment (PEE), Trust in Financial Institutions (TFI), User Satisfaction (US), and Cryptocurrency Adoption (CA) were tested through Structural Equation Modeling (SEM). The results indicated that CA significantly and positively influenced FI, US, TFI, and PEE. These relationships extend to the interaction effects: US, TFI, and PEE all positively related to FI. It is a reflection of cryptocurrencies as an opportunity to redress most of the afflictions characteristic of traditional finance systems and to promote financial inclusion and economic empowerment in developing countries. Future research should also investigate whether digital literacy and regulatory environments support cryptocurrency access.
This study examines the relationship between Bitcoin market dynamics and user activity on the r/cryptocurrency subreddit. The purpose of this research is to understand how social media activity correlates with Bitcoin price and trading volume, and to explore the sentiment and topical focus of Reddit discussions. We collected data on Bitcoin’s closing price and trading volume from January 2021 to December 2022, alongside the most popular posts and comments from the subreddit during the same period. Our analysis revealed significant correlations between Bitcoin market metrics and Reddit activity, with user discussions often reacting to market changes. Additionally, user activity on Reddit may indirectly influence the market through broader social and economic factors. Sentiment analysis showed that positive comments were more prevalent during price surges, while negative comments increased during downturns. Topic modeling identified four main discussion themes, which varied over time, particularly during market dips. These findings suggest that social media activity on Reddit can provide valuable insights into market trends and investor sentiment. Overall, our study highlights the influential role of online communities in shaping cryptocurrency market dynamics, offering potential tools for market prediction and regulation.
Robert Wayne Gregory, Roman Beck, Ola Henfridsson, Niam Yaraghi
Enhancing cooperation among strangers is challenging. Strangers, who lack previous interactions and trust, cannot rely on human reciprocity as they engage in social and economic exchange. They have a tendency to defect for maximizing individual interests rather than to cooperate for benefiting each party in the exchange. Blockchain-based smart contracts come with the promise of solving this dilemma of cooperation. In this paper, we trace this promise to a new mechanism of cooperation, programmed reciprocity, defined as coded instructions for automatically returning good for good (positive reciprocity) and ill for ill (negative reciprocity). Programmed reciprocity is rooted in the algorithmic enforcement capability of blockchain networks, defined as the ability to guarantee the execution of the rules of an exchange agreement without a central authority and the possibility of human interference by either of the involved parties. We propose that algorithmic enforcement capability positively affects the viability of cooperation among strangers on the blockchain through programmed reciprocity. This is contingent on the level of contract complexity and blockchain confidence. Our proposed framework extends the nascent literature on blockchain governance with a novel explanation of how programmed reciprocity can enhance cooperation among strangers. In doing this, it also addresses a significant yet unresolved problem in the literature on cooperation in social and economic exchanges.
This study examines the challenges related to the music industry's digital transformation and potential role of blockchain from the perspective of collective management organizations (CMOs). Building on desk research and primary data from semi-structured surveys conducted with C-level executives and managers, this empirical analysis identifies major projects, their state of development, and prospects for digital transformation based on blockchain in the music industry. The findings reveal that there are a limited number of blockchain projects led by and/or with the relevant participation of CMOs. However, most are just research projects, proofs of concept, or pilots, showing that blockchain is currently in an experimental phase of development on the periphery of the music industry's digital transformation. This is not very different from analysts' understanding of the current situation and perspectives on the mass adoption of blockchain in other industries. In summary, blockchain is neither at the core of the music industry's digital transformation nor a priority for CMOs leading this process from the perspective of intellectual property rights management. The limited quality of music metadata, sparsity of sound data sources, and absence of a common data governance framework among different stakeholders within the industry are the main impediments to transforming blockchain into a global solution with transformative potential. Overall, the results provide a snapshot of the current status and possible future trajectories of blockchain adoption as a paradigm for intellectual property rights exchange within the music industry.
Sanjeev Kumar, Hadiya Begum, Hindu Preethi, G Yasashwini
Access to higher education is severely limited in poor nations due to a lack of financial resources. Due to their parents' unemployment and their nations' failing economy, brilliant but financially struggling youngsters are unable to finish their education. Consequently, the pupils' abilities are underutilized. Student loans are a financial aid program that governments provide to college students so that they may finance their education and realize their academic potential. Student loans are made available by the government via the government of education. When the students enter the workforce, they are required to repay the loan plus interest. Student loans have historically only ever been funded by governments. The worldwide economic catastrophe is a direct consequence of the Russia-Ukraine conflict and the COVID-19 pandemic. Government expenditure has grown in response to the worldwide economic downturn. We want to use blockchain technology and crowdsourcing to completely revamp the student loan program, which will help the government save costs. This paper introduces a crowdsourced decentralized loan platform that uses blockchain technology to enable investors to contribute to the funding of higher education. Investors via the platform's network of regulated financial institutions will be able to lend money to students. When the students join the employment, they will repay the debts, along with interest. Students will be able to pay for their own education via the proposed platform, investors will earn interest, and governments will be able to reallocate funds now allocated to college loan programs to other uses. We support the efficacy of our endeavors with numerical findings and do a comprehensive security study.
Smart contracts, known for their immutable nature to ensure trust via automated enforcement, have evolved to require upgradeability due to unforeseen vulnerabilities and the need for feature enhancements post-deployment. This contradiction between immutability and the need for modifications has led to the development of upgradeable smart contracts. These contracts are immutable in principle yet upgradable by design, allowing updates without altering the underlying data or state, thus preserving the contract's intent while allowing improvements. This study aims to understand the application and implications of upgradeable smart contracts on the Ethereum blockchain. By introducing a dataset that catalogs the versions and evolutionary trajectories of smart contracts, the research explores key dimensions: the prevalence and adoption patterns of upgrade mechanisms, the likelihood and occurrences of contract upgrades, the nature of modifications post-upgrade, and their impact on user engagement and contract activity. Through empirical analysis, this study identifies upgradeable contracts and examines their upgrade history to uncover trends, preferences, and challenges associated with modifications. The evidence from analyzing over 44 million contracts shows that only 3% have upgradeable characteristics, with only 0.34% undergoing upgrades. This finding underscores a cautious approach by developers towards modifications, possibly due to the complexity of upgrade processes or a preference for maintaining stability. Furthermore, the study shows that upgrades are mainly aimed at feature enhancement and vulnerability mitigation, particularly when the contracts' source codes are accessible. However, the relationship between upgrades and user activity is complex, suggesting that additional factors significantly affect the use of smart contracts beyond their evolution.
Victor Takashi Hayashi, Renato Penha, Gabriela de Morais da Silva, Lucas de Britto Vieira · 8 authors
Uma solução foi proposta para criar pools de seguros mútuos eficientes, baratos e seguros na Blockchain Ethereum para uma startup de seguros localizada em São Paulo (SP), Brasil. Os grupos são formados por pessoas que se unem para proteger contra riscos predeterminados e são autoadministrados até certo ponto. Os resultados mostram que a administração do grupo é realizada por meio de contratos inteligentes que executam automaticamente as condições acordadas pelas partes. Todas as regras de negócios e reservas financeiras são mantidas no contrato inteligente. Os usuários interagem com o sistema em uma aplicação web que utiliza uma API Web3, que possui uma área de cliente e uma área de seguros P2P para gestão de novos grupos e atuação no processo de indenização. Os resultados mostraram que os smart contracts foram acionados automaticamente quando as condições predefinidas foram atendidas, eliminando a necessidade de intervenção humana e minimizando erros e fraudes, além de melhorar na administração e na satisfação dos grupos de seguros.
Creating a robust supply chain is one of the factors for more sturdy agriculture. Most of the agricultural produce is getting wasted while storing and transporting the goods. AgroString in Section 3 system collects real-time temperature and humidity data from the IoAT edge device and performs secure data storage and transmission through a distributed ledger. Research and studies are being conducted to forecast the availability of clear groundwater with the help of traditional techniques to meet worldwide food requirements. Collecting quality data from various groundwater sites for storing and sharing for further analysis has become a more significant challenge. Our current work, Section 4, G-DaM, increases the value and reliability of groundwater data by implementing Distributed ledger with a public Blockchain, Ethereum, on the edge layer. Agriculture uses 65% of the world's freshwater for farming, half of which goes wasted; the same is the scenario for energy. We design an insurance system called IncentiveChain, which uses a distributed ledger on edge to incentivize farmers whenever they use resources at a needed level to give similar or more agricultural yield in Section 5. In the current research, we address some of the problems in data management and implement state-of-the-art distributed ledger designs and computing capabilities on the edge layer to show performance improvements in data from smart farming.
The secure management and sale of digital assets has become a critical problem in an increasingly digitized environment. This project intends to address this issue by creating decentralized applications (dApps) that use blockchain technology to provide secure and efficient digital asset management, with a focus on NFTs. The NFT marketplace includes secure wallet connections, NFT image creation, minting, the marketplace, and profile management. Solidity-based smart contracts are utilized to create the NFT Marketplace back end, and IPFS is used for storage. The NFT Marketplace's front-end development uses React JSX and the web3js framework, allowing developers to connect to the Ethereum network. NFT Marketplace may assist creators in selling their art through a smart contract system, in which the artwork's ownership transfers to the new owner upon submission of a digital certificate.