The possibilities of smart contracts are endless. Smart contracts can do basically anything that facilitates the connection between two or more parties with definite sets of rules (predetermined conditions, actions, and outcomes). These parties can be both external (among individuals or organizations) or internal (within organizations). We will further examine smart contract applications and their use cases.
Source: Signity Solutions
Decentralized Finance (DeFi)
Firstly, we can’t talk about smart contract use cases without addressing decentralized finance (DeFi) [1]. Momentarily, it is but the first and most important use case for smart contracts. A whole new and improved financial ecosystem leveraging the benefits of blockchain technology can include activities such as financial data recording, trading, credit (lending/borrowing) markets, trade finance (through cross-border payments), asset management, crowdfunding, and plenty of other products and services. Stripped-down intermediaries provide the opportunity for almost everyone to have access to the financial markets, in a fast and affordable manner.
Compound, AAVE, Balancer, Uniswap and countless others are taking the lead in offering decentralized financial services.
Insurance
If set up correctly [2], smart contracts can simplify the process of insurance claims by automatically triggering the predetermined process when certain events occur. For instance, a smart contract can begin respective claims after recognizing accidents. In the case of automobile accidents, the damage extent, car number, and location where the incident occurred could be recorded on the blockchain in order to determine the exact amount of compensation.
For simpler cases, insurance firms like AXA have been offering flight-delayed insurance products since 2017, streamlining the compensation process for both providers and claimants [3].
Supply-chain management
The use of smart contracts can improve many aspects of supply-chain management. For example, as items move through the supply chain, smart contracts can record and track ownership rights and confirm who is responsible for the product at any given time; thus they provide full visibility and transparency. Inventory tracking can be visible to a granular level and it reduce to a minimum the need for verification, as well as fraud and theft. Nonetheless, these benefits don’t come free of attachments; institutions would need to add additional equipment to facilitate the process, like sensors and other relevant instruments.
For example, Adapt Ideations developed a smart contract between four organisations. Established sensors monitored important parameters of the machines such as temperature, operating time and relayed this data to their platform. Any violations of temperature or operation time of the machines triggered the smart contract and all the concerned organisations were notified [4].
Record keeping
Organisations can utilise smart contracts for accurate and transparent data recording. Health, finance, or virtually any other organisation can benefit from this system for record keeping. Hence, manual and error-prone paper-based filings for institutions, as well as micro-data, could be automated and bills reduced by the use of smart contracts.
Real Estate
By automatically connecting the parties, process payment and release liens from land records when a loan is paid, smart contracts are able to automate real estate contracts.
Finally, other areas for smart contract development include electoral processes, Internet of Things (IoT), escrow services, clinical trials, health care, digital rights management, and plenty more.
Your smart solution
In all the use cases mentioned above, smart contract execution can only be as good as the written code. To help smart contract projects be as successful as possible, at Scalable Solutions we count with an interdisciplinary team of computer science and infosec PhDs with years of experience in developing and auditing smart contracts.
We can develop, audit, test, or even simply consult on your already existing smart contract project, without disregarding operational security.
You can discover more of our smart contact capabilities here or request a quote today.
Resources
[1] “The Decentralization of Finance (DeFi) .” Resources, Scalable Solutions, 16 Oct. 2020, scalablesolutions.io/news/the-decentralization-of-finance-defi/
[2] “Smart Contracts and Their Characteristics.” Resources, Scalable Solutions, 7 April 2021, http://scalablesolutions.io/news/smart-contracts-and-their-characteristics/
[3] Terekhova, Maria. AXA Turns to Smart Contracts for Flight-Delay Insurance. Business Insider, 15 Sept. 2017, www.businessinsider.com/axa-turns-to-smart-contracts-for-flight-delay-insurance-2017-9.
[4] “How Are Smart Contracts Transforming Supply Chain Today?” Adapt Ideations, 8 July 2019, www.adaptideations.com/how-are-smart-contracts-transforming-supply-chain-today.
Sources
Mohanta, B. K., Panda, S. S., & Jena, D. (2018, July). An overview of smart contracts and use cases in blockchain technology. In 2018 9th International Conference on Computing, Communication and Networking Technologies (ICCCNT) (pp. 1-4). IEEE.
