Smart contracts play a critical role in blockchain applications, managing vast amounts of valuable assets. However, they are often vulnerable to attacks due to the inherent difficulties in modifying their code once deployed. Existing security analysis tools and verifiers primarily focus on single-contract verification, while many real-world blockchain applications involve multiple contracts and transactions. In this paper, we introduce an automated verifier, iCon, for inter-transaction properties of smart contracts on the Tezos blockchain platform. iCon is based on our program logic, which verifies inter-transaction properties in the presence of both known and unknown contracts. We present an abstraction technique for unknown contracts and propose a proof technique to ensure that an inter-transaction property holds for any existence of unknown contracts. The proof technique supports the correctness of our verification approach. We have implemented iCon on top of the Why3 verification framework, demonstrating its effectiveness through several case studies, including the decentralized exchange service Dexter2, of which a previous version had a flaw in its implementation.
João Ricardo Pereira Marques, Jo�ão Fabrício Filho, R.A. Pereira Goncalves
Este artigo apresenta uma abordagem para a criação de um dataset com os códigos dos contratos implantados na rede Ethereum. O critério de seleção compreende os três tipos de transações: regulares, de criação e de execução do código dos contratos. As ferramentas ethereumetl e Duckdb são utilizadas para extração dos dados e a criação do banco de dados. A base de dados reúne informações de blocos, transações, código dos contratos, informações sobre as instruções utilizadas em cada contrato e quantas vezes cada contrato foi executado e em quais versões da Ethereum Virtual Machine (EVM).
Despite their potential benefits for advancing organizational models of the digital economy, a significant challenge for the adoption of Decentralized Autonomous Organizations (DAOs) are the existing legal uncertainties that result in significant risks for their operators. In particular, there are three main areas of legal uncertainty that complicate the operation of such organizations: their treatment under company and partnership law, questions around the legal nature of smart contract technology, and the treatment of these organizations’ novel form of governance by securities law. In this chapter, we analyze these fundamental legal challenges to the wide-spread adoption of commercial DAOs, and argue that they lead to the conclusion that as a novel form of economic organization, DAOs are not capable of being meaningfully developed by simple analogy to the existing legal frameworks. This in turn raises the fundamental conclusion that either the DAO model as such, the law, or both need to be adapted and evolved in order to facilitate these organizations’ thriving in the economy. As we lay out in this chapter, if DAOs are indeed found to become of major benefit to the way economies are organized, the law must follow suit to market innovation by creating innovative novel legal structures that are capable of responding to these economic needs and realities. The studies of emerging legal framework that follow give a first glance of the direction which such emerging legal frameworks could take.
<h5 class=annotation lang-ru sigil_not_in_toc>Американский суд признал правомерным наложение санкций на криптовалютный миксер <span class=CharOverride-6><b>Tornado Cash</b></span> — своеобразную автоматическую систему обеспечения конфиденциальности владельцев криптовалюты. Суд признал, что для целей санкционного законодательства эту систему можно считать «лицом», а используемые ею смарт-контракты — «имуществом». Поэтому уполномоченный государственный орган может при наличии соответствующих оснований внести систему в санкционный список, а ее смарт-контракты — заблокировать.<br /> Несмотря на спорность некоторых тезисов судьи с формально-юридической точки зрения, общий исход дела вполне соответствует здравому смыслу. Иной подход означал бы капитуляцию правопорядка перед хитроумными техническими средствами обхода санкций.</h5>
Regulating cryptocurrency’s place in America’s most popular retirement savings vehicle generates thorny legal, ethical, and social justice dilemmas. Too little regulation could hurt those at highest risk of underfunded retirement. Too much could exacerbate existing racial, ethnic, and gender inequities. Though recent regulatory efforts suggest 401(k) administrators violate their fiduciary duty of care by offering cryptocurrency investment options to plan participants, the established fiduciary regime protects 401(k) plan participants from cryptocurrency risk while respecting their savings preferences. Yet, the current framework falls short of ethically and equitably serving all plan participants, particularly members of underserved communities— a problem largely unaddressed in academic, industry, or regulatory discourse. This Article demonstrates how regulators’ needlessly paternalistic approach toward cryptocurrency options could disproportionately impact minority retirement savings participation. Applying the existing fiduciary framework and practical mechanisms that plan fiduciaries currently use would minimize cryptocurrency risk to participants without rewriting the rules governing plan administration. This Article also proposes a novel, scientifically supported method by which fiduciaries should convey retirement planning information to improve retirement outcomes for all: via non-traditional media.
This article explores the ethical dilemmas propelled by a significant shift in the allocation of trust and intelligence due to blockchain technology and AI, resulting in a notable decrease in transaction costs. The ethical and political implications of democratizing the resulting productivity gains are noteworthy, and while the pie is expanding, how its slices are distributed remains an open question. Enter Worldcoin, an innovative worldwide initiative that creates an identity system based on proof of personhood and zero-knowledge proofs (ZKP) to provide everyone with a distinct and anonymous "World ID. Using the author's “cyberethics-mix" framework, this paper examines the possible implications of such a system concerning data's protection, ownership, accuracy, and accessibility, underscoring the ethical significance of a political approach emphasizing inclusivity and sustainability through digital decentralization.
Post hoc privacy auditing techniques can be used to test the privacy guarantees of a model, but come with several limitations: (i) they can only establish lower bounds on the privacy loss, (ii) the intermediate model updates and some data must beshared with the auditor to get a better approximation of the privacy loss, and (iii) the auditor typically faces a steep computational cost to run a large number of attacks. In this paper, we propose to proactively generate a cryptographic certificate of privacy during training to forego such auditing limitations. We introduce Confidential-DPproof , a framework for Confidential Proof of Differentially Private Training, which enhances training with a certificate of the (ε, δ)-DP guarantee achieved. To obtain this certificate without revealing information about the training data or model, we design a customized zero-knowledge proof protocol tailored to the requirements introduced by differentially private training, including random noise addition and privacy amplification by subsampling. In experiments on CIFAR-10, Confidential-DPproof trains a model achieving state-of-the-art 91% test accuracy with a certified privacy guarantee of (ε = 0.55, δ = 10−5)-DP in approximately 100 hours.
Open access
Law, Economics, and Judicial Systems
Occupational and Professional Licensing Regulation
Abstract Smart contracts govern transactions using the blockchain as the enforcing medium. They may be a cheaper form of governance of transactions compared to traditional contracts, the hierarchy of firms, and relational contracts. However, I argue that smart contracts do not eliminate transaction costs; rather, they can increase them, particularly when considering the issue of ex‐post efficiency‐enhancing adaptation. Thus, while smart contracts offer a new theoretical and practical way to govern transactions, they are not without challenges and limitations.
Corporate governance encompasses a set of processes, customs, policies, laws, and institutions that affect how a corporation is directed, administered, or controlled. Technology both enhances and disrupts the traditional board-centric corporate governance system, enhancing efficiency and transparency while introducing new challenges and risks. In this work we examine three key themes comprehensively: the redefinition of information and information asymmetry through the generation of and access to big data; blockchain technology’s transformative potential for aggregating preferences and exercising shareholder voting rights while blurring the line between securities and tokens; and the impact of smart contracts and their underlying infrastructure on the expansion of contracts and the implementation of decentralized governance through decentralized autonomous organizations. These innovative technological solutions empower stakeholders to exercise governance rights effectively, but their complexity also gives rise to new barriers and inequalities. As technology evolves, collaboration among researchers, policymakers, and practitioners is imperative to ensure that corporate governance remains effective and responsive to the current dynamic business environment.
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.
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.
DAO Regulation and Legislation This article explores the contrast between traditional centralized corporate entities and Decentralized Autonomous Organizations (DAOs) in the U.S. financial regulatory landscape. While traditional entities operate with a centralized structure and clear managerial hierarchies, DAOs disrupt this paradigm with their decentralized, democratic, and digital nature, thanks to blockchain technology. DAOs face significant legal challenges due to their unique structures, including regulatory uncertainty and liability issues. The paper highlights the need for regulatory clarity and adaptation to accommodate the participatory structures of DAOs. It concludes that while existing financial regulations apply to DAOs, they often fall short due to DAOs' unique nature, necessitating an update in regulatory approaches to appreciate the specific virtues of DAOs and Legal Autonomous Organizations (LAOs). The evolving landscape of DAOs demands close observation and involvement from various stakeholders in the blockchain industry to address these regulatory challenges effectively.
Wyoming’s DAO Statutes - A Model for Wider Adoption This article examines the first American statutes that address the legal organizational structure of decentralized autonomous organizations (DAOs). In 2021, the state of Wyoming folded the cryptocurrency-based organizations into the state’s definition of limited liability company (LLC), a legislative move that almost immediately drew widespread attention and criticism, while prompting the introduction of mirrored legislation in other states. This article addresses Wyoming’s novel statutory framework, securities regulation in this context, the practicality of treating DAOs as LLCs, and the first DAO organized under this statutory regime.