Understanding The Significance Of Smart Contracts

Smart contracts are an essential building block within the cryptocurrency ecosystem and are the core of many decentralized applications (dApps).

These programs run when predetermined conditions are met to help automate workflows, execute agreements, and carry out other essential tasks that can be governed with “if/when…then…” statements.

Programmed by developers, smart contracts are trustless, autonomous, decentralized, operate transparently, and are unable to be reversed or modified. These attributes make smart contracts a useful tool in reducing or even eliminating the need for intermediaries or third parties. The code arbitrates the terms of an agreement or contract.

Unsurprisingly, the benefits of smart contracts mean many traditional companies are looking towards the technology to optimize operations.

Research published in December 2021 projects the global smart contract market size is expected to jump to $770.52 million by 2028 up from about $145 million in 2020.

Smart contracts have already made notable waves within the supply chain industry as businesses aim to better track products. In the summer of 2021, blockchain and crypto mobile app provider Epazz Inc announced plans to launch its StreamPay Blockchain Smart Contract App. The company noted the application could be used by supply chain managers to keep watch on raw materials as they are transformed into finished goods, thanks to smart contracts.

The traceability benefits of smart contracts have also attracted some in the legal industry to take a look at the technology. Some believe smart contracts could build on the advent of e-signatures for legal documents to create scenarios where lawyer fees and other costs could be reduced by making agreements with the help of customized smart contracts.

Back in 2017, Arizona Governor Doug Ducey signed HB 2417 into law, which asserted smart contracts were legal and enforceable under state law.

By far, Ethereum remains the most popular blockchain for running smart contracts. Smart contracts run on the Ethereum Virtual Machine (EVM), a global, decentralized computer where Ethereum nodes provide power in exchange for Ether tokens.

Any Ethereum user can write a smart contract and deploy it to the network as long as they have enough ETH and understand how to code in a smart contract language like Solidity or Vyper.

As EVM remains the most popular platform for smart contracts, blockchain compatibility remains of utmost importance for teams interested in attracting users. Compatibility reduces the amount of gas needed for contract verification and execution.

Lycan Chain is one example of an up-and-coming EVM compatible blockchain with its own secure consensus mechanism. Developed by the team who introduced Werewolf, one of the world’s first DeFi ecosystems, Lycan Chain focuses on alleviating scalability issues and fostering full smart contract adoption.

Compatible with EVM and interoperable with Web 3.0, developers can rely on Lycan Chain’s unique hybrid proof-of-stake architecture to quickly integrate dApps onto the blockchain.

Named after the mythical Lycan species famous for its speed and immortality, the Lycan Chain team announced the launch of its Testnet in early March 2022.

As smart contracts remain the soul of ever-changing and dynamic blockchain industry, EVM compatibility remains of utmost importance for new and dynamic blockchains interested in helping developers quickly build scalable and secure solutions.