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What models and frameworks can you use to govern smart contracts?

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Smart contracts are self-executing agreements that run on blockchains, enabling trustless and transparent transactions. However, smart contracts also face challenges such as interoperability, scalability, security, and governance. How can you design and manage smart contracts that can adapt to changing conditions, resolve disputes, and coordinate with other contracts and platforms? In this article, you will learn about some models and frameworks that can help you govern smart contracts effectively.

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Miguel ángel Fernández-Salinero San Martín

Abogado Senior Socio Director / Attorney in Law at Crown Acquisitions Law Firm Abogados

1 Legal Engineering

Legal engineering is the process of translating legal rules and principles into code, using formal methods, logic, and computational tools. Legal engineering can help you create smart contracts that are compliant, consistent, and verifiable. For example, you can use legal engineering to define the terms, conditions, and obligations of a smart contract, as well as the possible outcomes and remedies in case of breach or dispute. You can also use legal engineering to link smart contracts to external sources of law, such as regulations, standards, or arbitration clauses.

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2 Decentralized Autonomous Organizations

Decentralized autonomous organizations (DAOs) are collective entities that operate on blockchains, governed by smart contracts and the votes of their members. DAOs can help you manage smart contracts that involve multiple parties, resources, and goals, without relying on a central authority or intermediary. For example, you can use DAOs to create and fund projects, distribute rewards, allocate resources, and make decisions collectively. You can also use DAOs to implement governance mechanisms, such as voting, proposals, delegation, and reputation systems.

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Miguel ángel Fernández-Salinero San Martín

Abogado Senior Socio Director / Attorney in Law at Crown Acquisitions Law Firm Abogados
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No hay normas en la regulación europea proyectada, como MiCA, a pesar de que sí se regulan los mercados de criptoactivos, donde los smart contracts están presentes en todas las operaciones. Y tampoco hay regulación sobre ello en el Reglamento UE 2022/858, aunque también estarán presentes en las liquidaciones de la operativa, permitiendo integrarla completamente en una única infraestructura de mercado, debido, justamente, a esta tecnología, que facilita la automatización, asegurando la compensación, liquidación y registro tras la contratación. Esta ausencia de regulación normativa debe ser superada en aras al alcanzar la seguridad jurídica plena de los smart contracts.

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3 Modular Design

Modular design is the practice of breaking down a complex system into smaller and simpler components that can be reused, combined, and updated independently. Modular design can help you improve the interoperability and scalability of your smart contracts, as well as reduce the risk of errors and bugs. For example, you can use modular design to create smart contracts that can interact with other contracts and platforms, such as cross-chain bridges, oracles, and protocols. You can also use modular design to create smart contracts that can be upgraded, replaced, or removed without affecting the whole system.

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4 Formal Verification

Formal verification is the method of proving or disproving the correctness of a system according to a set of specifications, using mathematical techniques and tools. Formal verification can help you enhance the security and reliability of your smart contracts, as well as detect and prevent potential vulnerabilities and attacks. For example, you can use formal verification to verify the logic, functionality, and properties of your smart contracts, as well as the compatibility and compliance of your smart contracts with other contracts and platforms. You can also use formal verification to test and debug your smart contracts before deployment.

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5 Smart Contract Audits

Smart contract audits are the process of reviewing and evaluating the code, design, and functionality of a smart contract, using manual or automated methods, to identify and fix any issues or risks. Smart contract audits can help you ensure the quality and performance of your smart contracts, as well as increase the trust and confidence of your users and stakeholders. For example, you can use smart contract audits to check the security, efficiency, usability, and compliance of your smart contracts, as well as the accuracy and validity of your smart contract data and transactions. You can also use smart contract audits to get feedback and recommendations from experts and peers.

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Miguel ángel Fernández-Salinero San Martín

Abogado Senior Socio Director / Attorney in Law at Crown Acquisitions Law Firm Abogados
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En relación con las auditorias de los smart contracts, ha de plantearse una regulación europea o, en su defecto, estatal, sobre dichas auditorias y, particularmente, sobre los oráculos. Es necesario exigir cierta seguridad, fiabilidad y responsabilidad, a quienes generan, mediante software, hardware o validación personal, datos relevantes en los que los smart contracts van a recurrir como evento para determinar la ejecución preprogramada. La regulación será la base de la seguridad jurídica de los smart contracts.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Miguel ángel Fernández-Salinero San Martín

Abogado Senior Socio Director / Attorney in Law at Crown Acquisitions Law Firm Abogados
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Los SMART CONTRACTS, como código autoejecutable constituyen una de las piezas fundamentales para aprovechar todas las eficiencias, la inmediatez, la seguridad, la reducción de costes o la seguridad que nos permiten los registros DLT (Blockchain).? Para su funcionamiento utilizan sistemas lógicos (If...Then...) y se condicionan mediante eventos, datos o información off-chain u on-chain. Así, una entrega contra pago (configurada como operación atómica, porque no puede separarse una prestación de la otra) solo se ejecutará si se valida la operación con un evento preprogramado que sea el establecido.

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What models and frameworks can you use to govern smart contracts?

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2

3

4

5

6

1 Legal Engineering

2 Decentralized Autonomous Organizations

3 Modular Design

4 Formal Verification

5 Smart Contract Audits

6 Here’s what else to consider

Blockchain

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What models and frameworks can you use to govern smart contracts?

1

2

3

4

5

6

1 Legal Engineering

2 Decentralized Autonomous Organizations

3 Modular Design

4 Formal Verification

5 Smart Contract Audits

6 Here’s what else to consider

Blockchain

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