Eternity Law International News Examples of use cases for hybrid smart contracts

Examples of use cases for hybrid smart contracts

September 13, 2022

The sector of DLT has been determined by the enthusiasm around smart contracts – programs that operate on the blοckchain. Primarily related to a decentralised, distributed ledger just like Eth, they allow to creation of decentralised apps that reshape all kinds of goods without applying for middlemen. The use cases for hybrid smart contracts (below mentioned as HSC) are differed; some of them we will take a look at in this overview.

Overview of scenarios of usage for HSC

Since HSCs can receive offchain details via a decentralised oracle network (DON), they can displace common analogs. For instance, insurance for the conditions of weather  — a kind of financial protection against losses incurred because of bad, measurable weather conditions – is currently accepted by common contracts. If a DON submits details on adverse weather, this protection can be carried out by alternative mechanisms. Generally, any program that is remunerated on the grounds of actual conditions can be carried out on blockchains, if there is a DON that can submit these offchain details.

Having a decentralised nature, HSCs can also conduct structures that feature enhanced computatiοnal cοmplexity compared to their traditional equivalents. For instance, the VCG algorithm is a closed, bid auction structure. It is used by Google and Facebook to operate advertisement auctions. The only challenge with this algorithm is that it’s a bit hard to compute. It could be too much costly to realize an algorithm in its whole form on blοckchain technolοgies. However, if the cοmputation was referred to as offchain computing applying a HSC, VCG could be cost-efficient and fully carried out on blοckchains.

DONs that act as deterministic random bit generators can work with many onchain gambling fits, however, they also can process systems and algorithms employing a degree of randomness, some of which show more efficiency than their nonrandom equivalents. For instance, there is an auction mechanism, which is similar to the common English auction. The only difference is that instead of finishing after a scheduled time, the auction finishes randomly. E-Bay clients may face the scalping issue in which approximately all bidding activities take place just prior to the ending of the auction.

This may be disappointing for purchasers, as they do not possess the details about the actual prices the auction will clear at prior to its ending. The auction mechanism based on HSCs resolves that issue by spurring participants to place bids earlier so that they can obtain them prior to the ending of the auction. Without a deterministic random bit generator, there would be no way to execute such mechanisms on the blοckchains.

While the first blockchain-grounded contracts played a highly essential role in the creation of tokens and DApps, the next generation will cover HSCs that can interrelate with the offchain details, serving as a bridge between this new world to our existing world. With more interesting datasets being entered on blockchains via DONs, the use cases for HSC are becoming stronger and more powerful over time.

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