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.
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.
A relatively recent phenomenon, smart contracts have slowly revolutionized the sphere of commercial transactions through faster, cheaper and automated means, by removing layers of unnecessary negotiation. A combination of law and coding, smart contracts have the potential to redesign our understanding of the basic doctrines of contract law. This article investigates the possible link which exists between smart contracts and the theory of detrimental reliance through the application of such contracts to certain age-old landmark cases, predominantly cited in the realm of contract law. It proposes the notion that issues pertaining to negotiation and miscommunication which have been the core matter of disputes in such cases, may have been easily avoided through an application of smart contracts, which compel enforcement at every stage. In particular, this article has explored the verdict of the jury in the matter of Pennzoil v. Texaco and construed that smart contracts have a key role to play even in instances of in-principle agreements. Further, this article has explored the possibility that, like any novel invention, smart contracts are not without their flaws and has examined the criticisms put forth regarding the applicability and adoption of such contracts, in certain instances. Finally, the author has concluded that a mechanism which would combine the strengths of both smart contracts and paper-based agreements is the need of the hour, to eliminate issues of ambiguity, enforcement and to permit the determination of more subjective legal criteria, as may be contractually required. Consideration, detrimental reliance, Pennzoil v. Texaco, promissory estoppel, smart contracts
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.
O mercado de Non-Fungible Tokens (NFT) está crescendo rapidamente nos últimos anos. A tecnologia ganhou maior notoriedade recentemente a partir da sua utilização vinculada ao mercado de artes digitais e, em razão da relevância econômica das transações, atraiu grande atenção em todo o mundo. No entanto, poucos são os trabalhos acadêmicos, especialmente os jurídicos, que tratam do assunto. O presente artigo apresenta um estudo inicial sobre o tema, a fim de demonstrar as linhas preliminares sobre a natureza jurídica do NFT. No primeiro capítulo é demonstrada a forma de organização e funcionamento de um NFT. No segundo capítulo é diferenciado o NFT de outros tipos de token. No terceiro capítulo são investigadas as possibilidades de enquadramento do NFT como valor mobiliário, contrato derivativo e bem móvel. Ao final, no quarto capítulo, a fim de demonstrar casos práticos de aplicação do enquadramento jurídico investigado, serão demonstrados dois exemplos concretos de aplicação do NFT.
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.
This chapter elucidates the position of smart contracts from the perspective of contracts as a means of connecting execution to human intentions, and draws several conclusions with regards to the consequences and limitations of the use of smart contracts. Contracts presume a human execution chain: humans interpret the contractual rules to realize the contract through actions. Interpretation functions as a means of making execution conform to party expectations, with the help of contractual terms in human-readable form, corrected by contract law. Smart contracts offer an alternative, an automated execution chain. This does not remove the need for translating party expectations into a specification of actions (the contract). It does imply that the specification is liberated from the need to be readable by humans. Consequentially, this chapter argues that the smart contract has no expressive force as to its actions: the impression given by the code to a human reader has no intrinsic connection to what the smart contract will do. As a result, smart contracts can execute contracts without exactly following contract law doctrines, although parties probably expect smart contracts to broadly conform to contract law as protecting background expectations. Smart contracts are limited in only following background expectations that have explicitly been programmed: they are unable to follow the precise, case-based and <italic>ex-post</italic> decided way in which equity and fairness operate as correctives. Parties to a smart contract should realize that they lose <italic>ex-post</italic> control such as unfair terms protection.
This chapter argues that promoting and facilitating the use of smart contracts will require us to confront some basic questions concerning definitions, enforceability, and regulation. First of all, is there agreement on what a ‘smart contract’ is? Secondly, assuming that there is a working definition of smart contracts, can traditional contract law adequately govern them? Finally, even if the traditional law can do so, would we require regulation to ensure that their proper use? Ultimately, for smart contracts to become a reality of legal practice, we will require a balanced legal environment that gives a sufficient level of certainty about legal rights under such contracts.
Απόδειξη είναι η επικύρωση συμπερασμάτων με την εφαρμογή λογικών επιχειρημάτων και κανόνων σε υποθέσεις. Στα μαθηματικά, ένας ισχυρισμός για να γίνει δεκτός ως αληθής ή έγκυρος πρέπει να συνοδεύεται από απόδειξη. Ωστόσο, αποδεικτικές διαδικασίες δεν υπάρχουν μόνο στα μαθηματικά, αλλά σχεδόν παντού – στις φυσικές επιστήμες, στην επιστήμη των υπολογιστών, στη νομική και ηθική επιχειρηματολογία, στη φιλοσοφία και ούτω καθεξής. Κατά τη διάρκεια της αποδεικτικής διαδικασίας, απαιτείται διάλογος μεταξύ των δρώντων (agents) για να διευκρινιστούν τα ασαφή βήματα, να καλυφθούν κενά ή να αποδειχθούν έμμεσες υποθέσεις σε μια μη ολοκληρωμένη απόδειξη. Κατά συνέπεια, η επιχειρηματολογία είναι αναπόσπαστο συστατικό της διαδικασίας ανακάλυψης των αποδείξεων γενικότερα αλλά και –πιο συγκεκριμένα– στις μαθηματικές αποδείξεις. Το πρώτο σκέλος της εργασίας παρουσιάζει πώς οι θεωρίες επιχειρηματολογίας που βασίζονται στη λογική μπορούν να εφαρμοστούν για να περιγράψουν συγκεκριμένα χαρακτηριστικά στην ανάπτυξη των αποδεικτικών συμβάντων (proof-event), τονίζοντας τη σχέση μεταξύ επίσημης απόδειξης, άτυπου ανθρώπινου συλλογισμού, γνωστικών διαδικασιών και κοινωνικών αλληλεπιδράσεων. Η έννοια του αποδεικτικού συμβάντος επινοήθηκε από τον Goguen, ο οποίος περιέγραψε τη μαθηματική απόδειξη ως ένα κοινωνικό γεγονός που λαμβάνει χώρα σε συγκεκριμένο χώρο και χρόνο, σχεδιασμένο να καλύπτει όχι μόνο τις «παραδοσιακές» τυπικές αποδείξεις αλλά όλα τα είδη αποδείξεων, συμπεριλαμβανομένων των ελλιπών ή υποθετικών αποδείξεων. Στις πραγματικές γνωστικές διαδικασίες, ο άτυπος ανθρώπινος συλλογισμός και οι κοινωνικές πτυχές παίζουν σημαντικό ρόλο. Η προσέγγισή μας επιχειρεί να κάνει τα αποδεικτικά συμβάντα πιο περιεκτικά για να εκφράσει την πλήρη τροχιά μιας μαθηματικής διαδικασίας, συμπεριλαμβανομένων τόσο των τυπικών όσο και των άτυπων βημάτων απόδειξης, μέχρι την τελική επικύρωση του αποτελέσματος της απόδειξης. ΄Ετσι, παρουσιάζουμε μια εκτεταμένη εκδοχή του λογισμού αποδεικτικών συμβάντων με το όνομα Argumentation-based ProofEvent Calculus (APEC), η οποία βασίζεται σε θεωρίες επιχειρηματολογίας των Pollock, Toulmin και Kakas που έχουν σχεδιαστεί για να μπορούν να καταγράφουν την εσωτερική και εξωτερική δομή μιας συνεργατικής μαθηματικής πρακτικής. Στο δεύτερο σκέλος της εργασίας παρουσιάζονται δύο πεδία εφαρμογής για να τονιστεί η αποτελεσματικότητα και η εκφραστικότητα των βασισμένων στη λογική προσεγγίσεων σε πραγματικά σενάρια αποδεικτικών διαδικασιών. Το πρώτο πεδίο αφορά άμεσες πρακτικές μαθηματικής απόδειξης που μπορούν να εφαρμοστούν είτε για μια εις βάθος ανάλυση των εσωτερικών βημάτων σε μια μαθηματική απόδειξη, όπως υποδεικνύεται στο παράδειγμα των Zero Knowledge Proofs, είτε για τη μοντελοποίηση μιας πιο εξωτερικής προοπτικής για την ανάδειξη των κοινωνικών αλληλεπιδράσεων και της εξέλιξης κατά τη διάρκεια μιας διαδικασίας απόδειξης πολλών δρώντων, όπως απεικονίζεται στα παραδείγματα του Mini-Polymath 4 πρότζεκτ και του Τελευταίου Θεωρήματος του Φερμά. Το δεύτερο πεδίο αφορά έμμεσες διαδικασίες απόδειξης που αναφέρονται σε ηθικές και νομικές πτυχές των ιατρικών συσκευών και των φορητών ρομπότ (wearable robots). Τα νομικά μοντέλα τεχνητής νοημοσύνης στον ιατρικό τομέα μπορούν να εκφραστούν αποτελεσματικά μέσω συστημάτων που βασίζονται στη λογική, όπου ένα νομικό κείμενο περιγράφεται από κανόνες που μπορούν να εκφράσουν νομικά επιχειρήματα και εξαιρέ- σεις και μπορούν να ελεγχθούν και να παράσχουν επεξηγήσεις για το πώς αποδείχθηκε ένα συγκεκριμένο συμπέρασμα. Τα συστήματα με βάση τη λογική που παρουσιάζονται σε αυτήν την εργασία είναι: το WeaRED, ένα σύστημα ηθικής λήψης αποφάσεων σχετικά με το απόρρητο των προσωπικών δεδομένων των Wearable Robots, τα συστήματα AMeDC και Medical Devices Rules σχετικά με τη νομοθεσία για τα ιατροτεχνολογικά προϊόντα, και το σύστημα ExosCE σχετικά με το νομικό καθεστώς των εξωσκελετών.
We study a scenario where an adjudication task (e.g., the resolution of a binary dispute) is outsourced to a set of agents who are appointed as jurors. This scenario is particularly relevant in a Web3 environment, where no verification of the adjudication outcome is possible, and the appointed agents are, in principle, indifferent to the final verdict. We consider simple adjudication mechanisms that use (1) majority voting to decide the final verdict and (2) a payment function to reward the agents with the majority vote and possibly punish the ones in the minority. Agents interact with such a mechanism strategically: they exert some effort to understand how to properly judge the dispute and cast a yes/no vote that depends on this understanding and on information they have about the rest of the votes. Eventually, they vote so that their utility (i.e., their payment from the mechanism minus the cost due to their effort) is maximized. Under reasonable assumptions about how an agent's effort is related to her understanding of the dispute, we show that appropriate payment functions can be used to recover the correct adjudication outcome with high probability. Our findings follow from a detailed analysis of the induced strategic game and make use of both theoretical arguments and simulation experiments.
Mikkel Milo, Eske Hoy Nielsen, Danil Annenkov, Bas Spitters
We provide three detailed case studies of vulnerabilities in smart contracts, and show how property-based testing would have found them: 1. the Dexter1 token exchange; 2. the iToken; 3. the ICO of Brave's BAT token. The last example is, in fact, new, and was missed in the auditing process. We have implemented this testing in ConCert, a general executable model/specification of smart contract execution in the Coq proof assistant. ConCert contracts can be used to generate verified smart contracts in Tezos' LIGO and Concordium's rust language. We thus show the effectiveness of combining formal verification and property-based testing of smart contracts.
Decentralized Finance (DeFi) is an emerging financial service model based on blockchain technology. DeFi composability denotes the ability for different DeFi services to interact with one another resulting in new forms of financial services. The DeFi ecosystem is largely based on ERC-20 tokens that can represent the value of an asset. Collateralized assets in DeFi composability are locked and additional profit cannot be generated. In this paper, we propose a method to generate profit from locked assets by using ERC-721 Non-Fungible Tokens (NFTs) and perpetual contracts. NFT represents the rights to a certain asset. A perpetual contract is a futures contract that does not have an expiration date. We propose perpetual contract NFT, a new form of NFT that can be used as collateral, which exploits perpetual futures contracts in the cryptocurrency derivatives market. Collateral needs to be provided to back the value of a perpetual contract. If the perpetual contract is minted as NFT, the resulting NFT represents the rights to the perpetual contract and its collateral. Therefore, the perpetual contact NFT itself can be used as collateral for DeFi composability. A proof-of-concept smart contract and a web application for perpetual contract NFT are provided to demonstrate its functionality. To validate the profitability of the perpetual contract NFT using a real-world scenario, we experiment with the position NFT of Uniswap v3 decentralized exchange. The position NFT is a form of perpetual contract NFT. Specifically, we present validation with three types of pools: stablecoins, stablecoin/wrapped tokens pair, and wrapped tokens.
This article provides an overview of the non-fungible tokens (NFTs) as an investment class. The first part focuses on the NFT infrastructure including the NFT primary and secondary markets, different types of NFT exchanges, NFT aggregators, NFT borrowing and landing, NFT staking, and finally NFT fundraising. The second part investigates the leading blue-chip NFT collections and their performance in the short- and long-term, both during the bull and bear markets. Analyzing close to two million NFT transactions, we find that profile picture (PFP) NFTs dominate the NFT market and yield exceptionally high returns both on the raw and market-adjusted basis. For example, NFTs from the collection Bored Ape Yacht Club (BAYC) deliver a buy-and-hold return of close to 2,000%. Furthermore, NFTs from other categories (art, gaming, metaverse) do not perform as well as PFPs, however, they outperform the cryptocurrency market by roughly 100%.
In this paper, we analyze the formal and material requirements of the jurisdictional agreements made in the field of smart contracts and Blockchain technology. Specifically, the study focuses on the formal aspects of this type of agreement, detailing under what circumstances an express submission agreement between subjects that use smart contracts (to self-execute one or more contractual clauses) will be valid. The different formats in which these types of agreements can appear are also explained, considering the new platforms and computer applications that have appeared in recent years. The theoretical constructions are accompanied by examples and graphics that are intended to illustrate, as far as possible, the practical aspect of smart contracts and jurisdictional agreements. Regarding the systematics of this paper, without prejudice to the introductory sections and the conclusion, it is divided into several sections according to the different types of smart contracts according to the form they take (or, rather, according to the form of the underlying contract that usually accompanies the smart contract), which has allowed a more rigorous study of the jurisdiction agreements carried out in this area. Finally, the study focuses especially on Regulation No. 1215/2015 due to its preeminent application in the Spanish Private International Law.
Ángel Alberto Varón Quimbayo, Yenny Marcela Mina Hinestroza
Esta investigación pretende presentar la forma como blockchain asocia el desarrollo de Contrato Inteligentes (Smart Contracts), a través de una nueva plataforma que relaciona aspectos éticos, legales, sociológicos y filosóficos que se consideran latentes. Los contratos inteligentes plantean un nuevo protocolo informático el cual garantiza el cumplimiento de cláusulas de un contrato automáticamente, generando una serie de derechos y obligaciones entre las partes intervinientes, actualmente existen varias plataformas para crear y gestionar este tipo de contratos, sin embargo la más recomendada es Ethereum que fue creada específicamente para Smart Contracts. Su objetivo enfoca en que se pueda utilizar en un gran número de servicios en sectores como servicios judiciales, salud, banca, inmobiliario, bolsa de valores entre otros, con la posibilidad de que surjan investigaciones para mejorar la forma cómo se ejecutan los contratos actualmente. en este artículo se describe qué es un contrato inteligente y como se realiza, Qué hace que un contrato sea inteligente, entre otros conceptos que nos ayudaran a entender a mayor profundidad teniendo encueta que el objetivo principal de los Smart Contracts, es mejorar el proceso y la ejecución de los contratos tradicionales, haciéndolos más seguros y económicos, para entender el funcionamiento de los contratos inteligentes es de suma importancia Identificar y analizar el funcionamiento y uso del blockchain ya que es una parte fundamental se basa en la infraestructura Ethereum para hacer posible la ejecución de contratos inteligentes, y como está a aportado y beneficiado la tecnología actualmente. En esta investigación se realizó una búsqueda de artículos científicos, donde se hizo una lectura crítica y analítica para poder emitir juicios de valor y poder construir el artículo, donde se obtuvo como resultado el análisis y la implementación del Smart Contract y cómo estos contribuyen a la promoción de los contratos en general y por último concluimos que los contratos inteligentes se expresan en códigos y que se ejecutan de forma automática, eliminando la necesidad de que existan intermediarios, ofreciendo seguridad y reducción de costes.
The fundamental question that this chapter aims to answer is whether traditional contract law has been challenged by the rise of smart contracts and, if so, in what manner. This chapter demonstrates that smart contracts are neither smart nor contracts in the legal sense. Smart contracts are rather a form of new technology that is used to secure the execution of promises established through a legal contract that contractual parties are using in line with the principle of freedom of contract. The discussion on smart contracts ask many more questions than it answers. This is still a new form of technology that is increasingly being used by businesses, but it remains to be seen how it fits in traditional contract laws. Smart contracts are not yet sufficiently tested and assessed, especially before the courts, and it is interesting to see what kind of answers case law will provide in the future. When it comes to the enforceability of smart contracts, that does not yet seem to be problematic as they are to be understood in line with the principle of freedom of contract.
Contracts in which computerized protocols execute the terms—referred to as smart contracts1 —are being increasingly used. Especially, recent advancements in a blockchain have fueled the rapid growth of such contracts.2 Indeed, one of the most high-profile uses of a blockchain has been used in coding and processing smart contracts.
Smart contracts, as written by computer code, would secure the performance of the contract. It is believed that this feature of smart contracts is marketed as the solution to traditional contracts, which can be easily breached. The potential benefits of automated performance, such as certainty, would bring benefits to all parties. However, this idea of automated performance would not be desirable all the time. Not allowing for a breach by insisting on the specific performance required by a smart contract would be considered practically and economically inefficient, and which might deter their widespread use. As an illustration of this inflexibility, “efficient breach theory” will be used to prove that insisting on the specific performance of the obligation secured by a smart contract would not be desirable for the contractual parties. After showing this inflexibility, a feasible solution for this concern will be presented within the design of contracts. Before discussing this issue, in the second section, the definition of smart contracts and, and its potential benefits, will be explained. In the third section, as the main issue, how automated performance can cause inflexibilities, the difficulty of predicting future events, and the impossibility of a breach will be analysed. After detecting these problems, whether the design of a smart contract can help to alleviate these inflexibilities will be discussed.
Purpose As a remedy to usually voluminous, complicated and not easily readable construction contracts, smart contracts can be considered as an effective and alternative solution. However, the construction industry is merely known as a frontrunner for fast adoption of recent technological advancements. Numerous administrative risks challenge construction companies to implement smart contracts. To highlight this issue, this study aims to assess the administrative risks of smart contract adoption in construction projects. Design/methodology/approach A literature survey is conducted to specify administrative risks of smart contracts followed by a pilot study to ensure that the framework is suitable to the research question. The criteria weights are calculated through the fuzzy analytical hierarchy process method, followed by a sensitivity analysis based on degree of fuzziness, which supports the robustness of the developed hierarchy and stability of the results. Then, a focus group discussion (FGD) is performed to discuss the mitigation strategies for the top-level risks in each risk category. Findings The final framework consists of 27 sub-criteria, which are categorized under five main criteria, namely, contractual, cultural, managerial, planning and relational. The findings show that (1) regulation change, (2) lack of a driving force, (3) works not accounted in planning, (4) shortcomings of current legal arrangements and (5) lack of dispute resolution mechanism are the top five risks challenging the adoption of smart contracts in construction projects. Risk mitigation strategies based on FGD show that improvements for the semi-automated smart contract drafting are considered more practicable compared to full automation. Originality/value The literature is limited in terms of the adoption of smart contracts, while the topic is receiving more attention recently. To support easy prevalence of smart contracts, this study attempts the most challenging aspects of smart contract adoption.