Understanding smart contracts as a new option in transaction cost economics

Among different concepts associated with the term blockchain, smart contracts have been a prominent one, especially popularized by the Ethereum platform. In this study, we unpack this concept within the framework of Transaction Cost Economics (TCE). This institutional economics theory emphasizes the role of distinctive (private and public) contract law regimes in shaping firm boundaries. We propose that widespread adoption of the smart contract concept creates a new option in public contracting, which may give rise to a smart-contract-augmented contract law regime. We discuss tradeoffs involved in the attractiveness of the smart contract concept for firms and the resulting potential for change in firm boundaries. Based on our new conceptualization, we discuss potential roles the three branches of government – judicial, executive, and legislative – in enabling and using this new contract law regime. We conclude the paper by pointing out limitations of the TCE perspective and suggesting future research directions

Trusted operational scenarios - Trust building mechanisms and strategies for electronic marketplaces.

This document presents and describes the trusted operational scenarios, resulting from the research and work carried out in Seamless project. The report presents identified collaboration habits of small and medium enterprises with low e-skills, trust building mechanisms and issues as main enablers of online business relationships on the electronic marketplace, a questionnaire analysis of the level of trust acceptance and necessity of trust building mechanisms, a proposal for the development of different strategies for the different types of trust mechanisms and recommended actions for the SEAMLESS project or other B2B marketplaces.trust building mechanisms, trust, B2B networks, e-marketplaces

Contracts Ex Machina

Smart contracts are self-executing digital transactions using decentralized cryptographic mechanisms for enforcement. They were theorized more than twenty years ago, but the recent development of Bitcoin and blockchain technologies has rekindled excitement about their potential among technologists and industry. Startup companies and major enterprises alike are now developing smart contract solutions for an array of markets, purporting to offer a digital bypass around traditional contract law. For legal scholars, smart contracts pose a significant question: Do smart contracts offer a superior solution to the problems that contract law addresses? In this article, we aim to understand both the potential and the limitations of smart contracts. We conclude that smart contracts offer novel possibilities, may significantly alter the commercial world, and will demand new legal responses. But smart contracts will not displace contract law. Understanding why not brings into focus the essential role of contract law as a remedial institution. In this way, smart contracts actually illuminate the role of contract law more than they obviate it

Securitisation on Blockchain: Implementation and Legal Challenges

Dissertation presented as the partial requirement for obtaining a Master's degree in Law and Financial MarketsBlockchain has disrupted the architecture of financial transactions more than any other innovation in the last decade. The tokenisation of real-life assets is explored in many corners of the capital markets, including the securitisation market. Howbeit, European Law, may not be sufficiently equipped to shelter the particularities of Distributed Ledger Technology (DLT). This paper constitutes a qualitative legal analysis of securitisation on blockchain in the Capital Markets Union. The primary question assesses European law's proclivity to accommodate securitisation on a blockchain. The focus lies herein firmly on disclosure requirements and continuous data reporting because DLT may streamline conventional channels. Potential implementations of blockchain precede the legal discussion as they lead to contrasting observations. Benefits and challenges for issuers, investors and regulators are displayed in an attempt to underline the utility of implementing blockchain. In summary, the paper studies the implementation, the impact, and the level of harmonisation with the existing law of securitisation on a blockchain. The amalgam of securitisation and DLT is relatively new, resulting in the scarcity of legal documents to consult. Hence, most observations are derived through deductive reasoning by juxtaposing existing law and the singularities of blockchain. The Securitisation Regulation, Markets in Financial Instruments Directive, Prospectus Regulation, Anti-Money Laundering Directive, Central Security Depository Regulation and DLT Pilot Regime constitute the foundation of this analysis. In terms of implementation, the paper recognises permissioned blockchains and tokens as most suitable to comply with legal provisions. Furthermore, the paper observes that European securitisation law does not obstruct the use of blockchain as a data reporting tool for private securitisation, whereas some legal barriers are identified for public offerings. Other legal issues emanate from general questions relating to the issuance, trading, and settlement of tokenised securities. Enhanced risk monitoring and standardisation are expected advantages of implementing DLT as a data layer for securitisation. Apart from legal issues, the nascency of DLT and interoperability with traditional software are considered significant challenges for large-scale adoption. Thus, the most vital catalyst may be trusting the integrity of the technology

Smart Contract Templates: foundations, design landscape and research directions

In this position paper, we consider some foundational topics regarding smart contracts (such as terminology, automation, enforceability, and semantics) and define a smart contract as an automatable and enforceable agreement. We explore a simple semantic framework for smart contracts, covering both operational and non-operational aspects, and describe templates and agreements for legally-enforceable smart contracts, based on legal documents. Building upon the Ricardian Contract, we identify operational parameters in the legal documents and use these to connect legal agreements to standardised code. We also explore the design landscape, including increasing sophistication of parameters, increasing use of common standardised code, and long-term research

Blockchain-based Smart Contracts: A Systematic Mapping Study

An appealing feature of blockchain technology is smart contracts. A smart contract is executable code that runs on top of the blockchain to facilitate, execute and enforce an agreement between untrusted parties without the involvement of a trusted third party. In this paper, we conduct a systematic mapping study to collect all research that is relevant to smart contracts from a technical perspective. The aim of doing so is to identify current research topics and open challenges for future studies in smart contract research. We extract 24 papers from different scientific databases. The results show that about two thirds of the papers focus on identifying and tackling smart contract issues. Four key issues are identified, namely, codifying, security, privacy and performance issues. The rest of the papers focuses on smart contract applications or other smart contract related topics. Research gaps that need to be addressed in future studies are provided.Comment: Keywords: Blockchain, Smart contracts, Systematic Mapping Study, Surve