The transition to Next-gen Smart Contracts

Ziliqa, EOS, OffChain Labs and Ernst & Young have all come out with improvements to Smart Contracts

A Smart Contract is an agreement between two parties, which gets executed based on a set of predefined instructions — the functionality was introduced by the Ethereum platform and it became one of the most desirable & innovative features not just for the native platform but for all the subsequent projects. And while one can’t deny the utility of smart contracts with their auto-enforcing ability, immutable nature, cost-effectiveness & self-execution — their biggest weakness lies in the static nature of machine-readable instructions of code.

I have written about Ricardian contracts earlier, which is one such innovation that has improved on the limitations of the smart contracts by converting human-readable legal contract between multiple parties into machine-readable software code which can be executed with all the features of the smart contract. We are going to look at some of the recent developments which have sought to improve the functionality & efficiency of the traditional smart contracts.

Scilla Smart contracts (Ziliqa)

Most recently Ziliqa — a publicly scalable blockchain network added the smart contract functionality to its main net. The test net has managed to achieve a speed of 2828 TPS. Although not a huge number considering some of the other networks are claiming higher throughput than this — linear scaling capability gives Ziliqa the capability to continue to grow with the increasing demand.

Coming back to the smart contracts, the ones used on Ziliqa are created via “Scilla” (Contract Intermediate-Level Language). This programming language has the functionality of static checks & formal verification giving developers the capability to perform thorough checks on the smart contracts to make sure they are executed as intended.

World’s First Smart Contract Firewall (EOS)

The largest ICO-to-date platform EOS has launched FireWall.X — which boasts of improving the security of smart contracts created on the EOS platform. It is basically a Cyber defender for smart contracts, preventing any malicious attacks. All the dApps created on the platform will be able to employ this smart contract firewall against intruders.

The security utility claims to have stopped out 2985 hacker addresses & intercepted 119,740 attacks on 32 dApps so far. The firewall has built a joint defense system using oracle technology and integrating BTI (Blockchain Threat Intelligence). Developers only need to add FireWall.X’s smart contract security code libraries to the smart contract code they are writing to add protection against malicious attacks.

Arbitrum Protocol (OffChain Labs)

A blockchain startup OffChain Labs, co-founded by Ed Felten a Computer Science professor at Princeton University, intends to resolve the issues of scalability & privacy in the Enterprise blockchain implementations. They have created their own protocol dubbed Arbitrum making smart contracts more scalable.

The protocol also makes the smart contracts more private by moving a part of the smart contract data off the public blockchain. The credentials of the team & prototype model of the tool have gotten the investors interested enough to close a $3.7 million in a seed round recently, led by crypto hedge fund Pantera Capital.

Smart Contract Analyzer tool (Ernst & Young)

And finally, we have a mainstream company entering the smart contract arena — Big Four Auditing firm Ernst & Young (EY) has also recently released a Smart Contract Analyzer tool for Ethereum public blockchain. According to the announcement, the private beta release of the tool would allow the users to monitor smart contracts for known security risks.

It has become increasingly important to understand the risks involved with the execution of the smart contracts, especially for investors who are adopting the tokenization of assets based on them. EY has developed a set of 250 tests covering malware, coding errors, proper execution and following of industry standards among others. The tool also allows for the development of customized token tests.

The central theme that has emerged from all these smart contract upgrades is of scalability, privacy & security. While all these improvements are being reported on individual platforms, it is nonetheless encouraging to see smart contracts are coming of age. Maybe in the near future, we could have a library of smart contract tools that amalgamates these improvements into an industry-standard smart contract.

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