What is Smart Contract?
A Smart Contract is computer code that gets executed automatically when specific conditions are met, whereas it is unique compared to traditional contracts. Smart contracts do not depend on any third party or intermediary to bring trust, in fact, they are coded as the agreement between two or more parties. Quick settlements in various business processes can be made between all authorized parties, which eliminates the intermediaries, which ultimately saves time and cost
Globally industries have been opting for Smart Contract development in their business modules, as they offer numerous advantages like:
- Transparency
- Efficiency
- Trust
- Accuracy
How Smart Contracts are revolutionizing industries
Rights management
Smart Contracts have revolutionized the way to create, track, and assign ownership rights to users through the way of specific digital tokens existing on blockchain networks. When tokens are issued, they are programmed with various functionalities in the form of smart contracts having details of the user. Those details can include personal information for utility/insurance during a dApp (utility token), or even voting rights during a protocol (governance token), equity of a company (security token), ownership claim to a singular real-world, or a digital asset like non-fungible tokens.
Financial products (DeFi)
Decentralized Finance (DeFi) apps have carved their niche among a specific section of users due to the ease of usability they brought in regarding financial services. Smart Contracts have reformed traditional financial services by ushering in new concepts like money markets, options, stablecoins, exchanges, and asset management. Through permissionless composability, smart contracts have combined multiple services to make further financial opportunities where it can hold users’ funds in escrow and distribute them between users supported predefined conditions.
Gaming
There has been use of Smart Contracts in blockchain-based games to ensure contaminate implementation of in-game operations. One of the most popular Play-to-Earn games named Axie Infinity has been at the forefront of using smart contracts for various activities within the game like selling land, reward claiming, and breeding. It is predicted that the Fantasy Sports market will witness a growth rate of 7% CAGR till 2025 and thanks to the use of smart contracts that have become a tool in democratizing this fast-growing industry and ensuring transparency.
In terms of real-life sports, it is possible to employ smart contracts to monitor the performance of athletes and accordingly alter the many fantasy teams.
Insurance
Insurance-based payouts are something that is dependent on some specified kinds of events and smart contracts offer tamper-proof infrastructure for monitoring them. Proper data capture like in the case of crop insurance, where smart contracts are employed where a user purchases a policy that supports specific weather information like seasonal rainfall during a geographic location. In case of any events that are mentioned in the terms of insurance like short rainfall within a specified location, then the smart contract triggers a payout automatically.
This ensures that the insurer gets timely payment and also lets users deposit funds into a pool so that collected premiums are distributed to pool participants supported by a share of their contribution to the pool.
Supply chain management
Smart Contracts are deep into supply chain management and are transforming it manifold. There are multiple instances in which smart contracts are helping in the tracking of items within the availability chain with full visibility and transparency. Smart Contracts are letting enterprises track their inventories more accurately and also keep an eye on other areas like the availability of goods for processing. This would ensure that there are lesser frauds, and thefts and additionally when businesses install additional equipment, including sensors, to their supply chain it streamlines the whole chain through a sensible contract application.
Conclusion
Smart Contracts-based automation are been utilized by a large section of industries and the list is huge. A senior Smart Contract developer at Rejolut quotes that, with every coming day the type of industries involved is increasing and the secured nature of smart contracts are not just employed by leading corporates but even by emerging start-ups.
About the Author/s
The New Jersey Digest is a new jersey magazine that has chronicled daily life in the Garden State for over 10 years.
