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

A smart contract system for decentralized borda count voting

In this article, we propose the first self-tallying decentralized e-voting protocol for a ranked-choice voting system based on Borda count. Our protocol does not need any trusted setup or tallying authority to compute the tally. The voters interact through a publicly accessible bulletin board for executing the protocol in a way that is publicly verifiable. Our main protocol consists of two rounds. In the first round, the voters publish their public keys, and in the second round they publish their randomized ballots. All voters provide Non-interactive Zero-Knowledge (NIZK) proofs to show that they have been following the protocol specification honestly without revealing their secret votes. At the end of the election, anyone including a third-party observer will be able to compute the tally without needing any tallying authority. We provide security proofs to show that our protocol guarantees the maximum privacy for each voter. We have implemented our protocol using Ethereum's blockchain as a public bulletin board to record voting operations as publicly verifiable transactions. The experimental data obtained from our tests show the protocol's potential for the real-world deployment

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

How Effective are Smart Contract Analysis Tools? Evaluating Smart Contract Static Analysis Tools Using Bug Injection

Security attacks targeting smart contracts have been on the rise, which have led to financial loss and erosion of trust. Therefore, it is important to enable developers to discover security vulnerabilities in smart contracts before deployment. A number of static analysis tools have been developed for finding security bugs in smart contracts. However, despite the numerous bug-finding tools, there is no systematic approach to evaluate the proposed tools and gauge their effectiveness. This paper proposes SolidiFI, an automated and systematic approach for evaluating smart contract static analysis tools. SolidiFI is based on injecting bugs (i.e., code defects) into all potential locations in a smart contract to introduce targeted security vulnerabilities. SolidiFI then checks the generated buggy contract using the static analysis tools, and identifies the bugs that the tools are unable to detect (false-negatives) along with identifying the bugs reported as false-positives. SolidiFI is used to evaluate six widely-used static analysis tools, namely, Oyente, Securify, Mythril, SmartCheck, Manticore and Slither, using a set of 50 contracts injected by 9369 distinct bugs. It finds several instances of bugs that are not detected by the evaluated tools despite their claims of being able to detect such bugs, and all the tools report many false positivesComment: ISSTA 202