Short Description – In recent years, the evolution of advanced programming languages has enhanced the capabilities of smart contracts. Projects like Aztec Protocol and Enigma are opening up opportunities for applications in finance, healthcare, and supply chain management. The integration of artificial intelligence (AI) and machine learning (ML) in smart contracts has promoted their use in industries like real estate. Circle announced the launch of its two new Web3 services products – gas station and smart contract platform. Citi Treasury and Trade Solutions announced the launch of Citi Token Services for trade finance and cash management.
Smart contracts are self-executing contracts with the terms of the agreement directly written into code. They are designed to automate the execution of various processes safely and smoothly without relying on intermediaries. They run on blockchain platforms, such as Ethereum, and automatically enforce and execute the terms of the contract when predefined conditions are met.
Introduced by Nick Szabo in the 1990s, smart contracts eliminate the need for intermediaries, such as lawyers or banks, and provide a transparent, temper-proof, and decentralized way of executing agreements. They are stored and replicated across a distributed network of computers, ensuring immutability and security.
Smart contracts are programmable and can perform various functions, including transferring digital assets, verifying identity, and facilitating complex transactions without the need for human intervention. They have applications across various industries, including finance, supply chain management, real state, and healthcare, revolutionizing the way agreements are made and executed in the digital age.
Technological advancements in smart contracts –
In recent years, the evolution of advanced programming languages has enhanced the capabilities of smart contracts. Initially, the contracts were run by an Ethereum-based language called Solidity. The Ethereum based smart contracts were considered the most secure platforms for transactions and storing sensitive files. Now also, because of their high speed and efficiency, Ethereum based smart contract platforms are expected to hold the lion’s share by garnering a revenue of $540.4 million from 2022 to 2032.
Moreover, to address the scalability limitations of Ethereum, several layer 2 scaling solutions such as Optimistic Rollups and zkRollups have been developed. These solutions enable smart contracts to be executed off-chain or in a more efficient manner, significantly increasing transaction throughput while reducing costs.
Furthermore, interoperability between different blockchain networks has become a focus area for smart contract development. Projects such as Polkadot, Cosmos, and bridges such as Chainlink have been working on enabling smart contracts to operate seamlessly across multiple blockchains, allowing for greater flexibility and connectivity. Standardization efforts like ERC-20, ERC-721, and ERC-1155 have paved the way for the creation and interoperability of tokens on blockchain networks. New token standards and protocols are continually being proposed and developed to address specific use cases and improve cross-platform compatibility.
In addition, the use of advanced languages such as Vyper has enabled developers to create robust smart contracts with ease of use and optimum security. These advanced programming languages act as the backbone for enabling smart contracts to address issues such as low-cost and faster execution. The integration of oracles and real world data feeds has further expanded the capabilities of these digital instruments to fetch data from external sources, and then process, aggregate, and verify them before sending data back to smart contracts. This advancement enables smart contracts to simplify complex industry processes swiftly.
At the same time, enhancements in zero-knowledge proofs (ZKPs) and other privacy preserving technologies have enabled the development of smart contracts that can handle sensitive data while preserving confidentiality. Projects like Aztec Protocol and Enigma are working on integrating these privacy features into smart contracts, opening up opportunities for applications in finance, healthcare, and supply chain management.
On the other hand, the integration of artificial intelligence (AI) and machine learning (ML) in smart contracts has promoted their use in industries like real estate. They can help improve and streamline the process of buying and selling and can enable the automatic transfer of ownership, once the contract conditions are fulfilled. This eliminates the need for intermediaries, promoting faster and cheaper transactions. AI-powered smart contracts are more secure than existing smart contracts as they are less prone to fraud. AI and ML can examine data, recognize potential threats, and stop executing the contract. This eliminates the possibility of fraud and ensures secure transactions.
Smart contracts market forecast –
According to a report published by Allied Market Research, the global smart contracts market size is registered to reach $2.5 billion with a considerable CAGR from 2023 to 2032. A wide array of factors such as surge in demand for smart contracts in educational institutions, growing innovation and technological progression, rise in demand for automation, growing adoption of digital platforms, and implementation of 5G network are driving the growth of the market in more than one way.
As per the report, North America is currently dominating the market with the largest market share. The Asia-Pacific region, at the same time, is anticipated to manifest the fastest growth rate during the forecasted period.
Frontrunner’s business strategies –
In order to stay competitive in the market, many leading players in the smart contracts industry have come up with innovative product launches. For instance, Circle, a global financial technology firm announced the launch of its two new Web3 services products – gas station and smart contract platform. These product offerings would provide a one-stop solution for developers to offer a cost-effective, interactive, and streamlined on-chain experience for their customers. The gas station would eliminate the need for blockchain transaction fees for end-users, promoting cheaper modes of transactions and the smart contract platform would make it easier for businesses to embrace the benefits of blockchain transactions.
Similarly, in September 2023, Citi Treasury and Trade Solutions (TTS), the world’s best bank for payments and treasury announced the launch of Citi Token Services for trade finance and cash management. These services used blockchain and smart contract technologies to offer digital asset solutions for institutional clients. This launch would redefine the financial ecosystem by offering next-generation banking services to several financial institutions.
Undeniably, the increasing investments by companies in the development of cost-effective and reliable smart contracts for diversifying applications will promise a new world that will transform how people interact and transact in the modern digital age. To wrap up, the global smart contracts market has a huge scope to gather immense growth prospects in the near future.
Author’s Bio – Suchita Gupta is an explorer, musician and content writer. While pursuing MBA, she found that nothing satisfies her more than writing on miscellaneous domains. She is a writer by day, and a reader by night. Besides, she can be found entertaining her audience on social media platforms. Find her on LinkedIn & Instagram.
