Archive for the ‘Smart Contracts’ Category

Decentralized Autonomous Organization (DAO) | by SMC Research | Dec, 2023 – Medium

Blockchains are already transforming our financial system, as we can see with DeFi (Decentralized Finance).

However, blockchains are not only useful when it comes to finance.

With the invention of blockchain technology came the concept of decentralization i.e. something that is not controlled by a single individual.

The invention of Blockchain also brought another idea to disrupt regular centralized organizations into decentralized organizations called DAOs.

You see, regular centralized organizations could be a company, business, or community that operates with the CEO as the head and central authority.

He makes all the decisions with a small group of people called board members and gives no room for input and transparency for everyone that is part of the organization.

DAO, on the other hand, stands for Decentralized Autonomous Organization. These are organizations (a group of people in a business or community) that govern themselves using computer programs and codes called smart contracts and, as such, have the ability to function autonomously, i.e., without the need for a central authority or single individual.

With a DAO, these groups of people can come together in an agreement to abide by certain rules for the purpose of achieving an objective or goal.

Those rules are often written by a core team of community members into the smart contracts that run when certain conditions are met.

These smart contracts are open and can be verified as well as publicly auditable, thus laying a solid and trusted foundation for the operations of the DAO.

The code is also open for any potential member to understand how that particular DAO will operate fully at all times.

Once the code has been set, it can no longer be altered without a consensus (i.e., a general agreement) obtained through a vote by members; which means there is no specific authority that has the power to change the rules of the DAO. It is entirely up to the token holders to decide.

The computer program used to create a DAO is called "Solidity," and deploying it on a blockchain like Ethereum activates the DAO.

A code of a DAO, once deployed, requires Ether (ETH) to engage in transactions.

A DAO cannot accomplish anything without ETH; hence, the first item of business for a DAO is to have as much ETH as possible.

ETH can be given to the DAOs using the smart contract address during the initial creation phase stated in the code. Once funding is completed, the DAO is ready for deployment towards a specific goal.

The goal of a DAO can be anything from collecting rare NFTs in the case of Pleaser DAO to the management and control of a stablecoin in the case of MakerDAO and DAI stablecoin.

DAOs operate on a decentralized ranking; that is, everyone who is a token holder has a stake, and no one person owns or controls the entire thing the way a regular organization with a CEO would.

All the members of a DAO can access information about the organizations actions and finances alongside vote on decisions affecting the DAO using the tokens they hold.

Thus, there is no central authority of a DAO; instead, power is distributed across tokenholders who collectively cast votes.

All members must first join a DAO by purchasing its native cryptocurrency to become a member.

Funds gotten from the sale of the token issued by the DAO are used to fill up the DAOs treasury.

Token holders receive voting rights in exchange for their money, which are usually proportional to the tokens they hold.

DAOs are community-led organizations that are fully autonomous and transparent because smart contracts lay the rules alongside control the organization treasury.

Smart contracts also execute on the agreed upon decisions, and at any point, even the very code for voting and setting up proposals can be publicly audited.

Generally speaking, community members create proposals on certain issues. Proposals that are put forward are voted on by token holders using the governance token.

Proposals that achieve some predefined level of consensus are then accepted and enforced by the rules embedded within the smart contract.

The concept of a DAO is to promote oversight and management of an entity similar to a corporation.

However, the key to a DAO is the lack of a central authority; the collective group of governance token holders act as the governing body.

Voting power is often distributed across users based on the number of tokens they hold. For example, a user that owns 100 tokens of the DAO will have twice the weight of voting power over a user that owns 50 tokens.

DAOs often have treasuries for keeping tokens that can be issued in exchange for fiat.

Members of the DAO can vote on how to use those funds; for example, some DAOs with the intention of acquiring rare NFTs can vote on whether to liquidate treasury funds in exchange for NFTs.

There are several reasons why a group of individuals may want to pursue a structure of a DAO for an organization.

Some of the benefits of this form of management include:

With DAOs, decisions impacting the organization are made by all of the members as opposed to a central authority.

Instead of relying on the actions of one individual (CEO) or a small group of individuals (Board of Directors), DAOs decentralize authority across a large range of members.

The concept of a DAO encourages people from all over the world to come together to build a single vision. With just internet and a device, tokenholders can interact with other owners wherever they may live.

Within a DAO, votes are cast via blockchain and made publicly viewable. This requires users to act in ways they feel is best, as their vote and their decisions will be made publicly viewable.

Individuals within a DAO may feel more empowered and connected to it when they have a voting power and a direct say on all matters.

Unlike a formal organisation, where trust is the primary motivator for bringing people together, DAO members trust the code.

While DAOs may sound liberating and progressive, there are a few roadblocks that you must consider before jumping right in:

DAOs are still coded, and codes are sometimes vulnerable to hacks, like in the case of The DAO that was hacked and $60 million of ether was stolen in 2016.

DAOs are new innovation that is still in its infancy and requires a more critical perspective.

Also, the majority of DAO-based products are still out of sync with their centralized and offline counterparts.

The most common type of DAOs are known as protocol DAOs. They operate by offering tokens as a means of ownership and governance for its protocol (smart contracts).

When tokens are used as voting requirements for implementing any changes in the DAO, such DAOs structure could be referred to as protocol DAOs.

For example, MakerDAO, who owns DAI stablecoin, votes on proposals to the DAI project through its Maker governance token.

Other examples of protocol DAOs include the decentralized exchange Uniswap DAO, which rewards native governance tokens called UNI to liquidity pool providers.

The UNI tokens can also be used to vote on governance-related decisions as it affects the Uniswap DAO.

Other notable protocol DAOs include Aave and Yearn Finance.

2. Collector DAOs

This is a type of DAO that collects, sells, and issues NFTs. As NFTs have grown in popularity and adoption, they have become a large part of the crypto investments.

The main goal for Collector DAOs is to acquire NFTs from chosen collections or artists.

A good example of a collector DAO is Pleaser DAO. It is a DAO famous for being the owner of Wu Tang Clans album Once Upon A Time in Shaolin and the Doge Meme NFT.

Another popular example of a Collector DAO is ConstitutionDAO, which was formed in an attempt to buy a copy of the U.S. Constitution.

Though the DAO failed at acquiring the asset, the DAO proved a collection of like-minded individuals could form and pursue such endeavours.

Flemingo DAO is also yet another example of a collector DAO, which collected incredibly expensive NFTs from digital artists Cryptopunk in 2021 for $800k USD.

3. Investment DAOs

Investment DAOs are DAOs focused on generating a good return on investments.

It is basically a group of members who pool their funds to generate the maximum possible return on their investment.

Traditional investment firms put investment power in the hands of a relatively small group of money managers of VC funds and hedge funds.

Investment DAOs offer anyone holding its governance token the ability to make decisions regarding its investments.

Profits from investments are distributed either via airdrops to governance token holders or through a staking mechanism. By staking your governance token, youll then receive a share of rewards that you can withdraw from the smart contract.

Some of the top examples of investment DAOs include MetaCartel Ventures, which is a sub DAO of MetaCartel DAO, focused on investments in new dApp projects. Others include The LAO and BitDAO.

4. Social DAOs

Social DAOs intend to bring like-minded people together, coordinated around a token.

By organizing around a token, members have the incentive to create a valuable communityshare insights, host meetups, and throw great parties, etc.

The leading example is Friends with Benefits and its $FWB token. To join, members must submit an application and acquire 75 FWB tokens.

Entry comes with access to a community full of prominent crypto builders, artists, and creatives as well as exclusive events.

As more people understood the benefits of joining the FWB community, the token appreciated, sending the $FWB price from $10 to $75, and therefore, membership cost from around $750 to around $6,000.

You can think of social DAOs as exclusive clubs where you can gain membership by purchasing a specific amount of DAO tokens.

Bored Ape Yacht Club NFTs is also another top example of a social DAOs.

You can buy a BAYC NFT and become a member of an elite club with many celebrities as well as an NFTs link to a distinct bored ape profile picture.

5. Educational DAOs

Educational DAOs are built on strong communities while also providing the foundation for web3 through courses, learning materials, and lecturing events.

What is even more special about these DAOs is that students learning through these DAOs also earn ownership and will have a say in the direction of the DAO.

One educational DAO slowly gaining popularity is SMC DAO which is community of people focused on providing educational interactions, tutorial videos and courses on cryptocurrencies and NFTS as well rewarding students and tutors with DAO tokens and points for learning and adding value.

With several use cases in real life, DAOs are becoming the best option adopted by many organizations to mitigate the operational cost and achieve a shared vision.

The main advantage is transparency and security as they are smart contract enabled, thus providing a good level of security and trust.

Its no wonder DAOs are already becoming very bold and valuable, especially with a market valuation of close to $13 billion.

Uniswap (UNI) is leading the charge, with over 2,750,000 members in the ecosystem.

DAO ecosystem tokens like MKR, UNI, CRV, and soon SMC DAO tokens are tokens investors should be worth paying attention to.

Even billionaire Mark Cuban believes that DAOs have a good chance at becoming the future of modern businesses in the long run.

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Decentralized Autonomous Organization (DAO) | by SMC Research | Dec, 2023 - Medium

Why ChatGPT Is The Next Revolution In Smart Contracts And … – Blockchain Magazine

ChatGPT, as a natural language processing AI model, holds the promise of catalyzing a substantial transformation within the realms of smart contracts and blockchain technology. Its ability to simplify interactions by providing a user-friendly interface for engaging with blockchain systems and smart contracts in plain language is poised to break down barriers to entry, welcoming a more diverse and extensive user base into the blockchain ecosystem. Beyond simplifying interactions, ChatGPT accelerates smart contract development by generating code snippets and producing comprehensible documentation, streamlining the coding process while enhancing transparency. Moreover, it contributes significantly to security through automated audits, vulnerability detection, and real-time security advisories, preempting threats before they can be exploited. In tandem, ChatGPT serves as an educational resource, educating users and developers about blockchain intricacies and promoting best practices, ultimately cultivating a more informed and secure blockchain community. Additionally, it aids in the integration of legal contracts with smart contracts, ensuring compliance and enhancing the privacy and security of transactions. While ChatGPT empowers blockchain technology, it is crucial to remember that its effective incorporation should be guided by a balance of AI and human expertise, security measures, and adherence to ethical principles. ChatGPT, as a natural language processing AI model, has the potential to play a significant role in revolutionizing smart contracts and blockchain technology in several ways:

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Why ChatGPT Is The Next Revolution In Smart Contracts And ... - Blockchain Magazine

Ethereum’s Smart Contracts meet Bitcoin Spark: A Match Made in … – Captain Altcoin

Home Journal Ethereums Smart Contracts meet Bitcoin Spark: A Match Made in Blockchain Heaven

Bitcoin Sparks revolutionary blockchain concept, blended with Ethereum-style smart contracts, will redefine the digital agreements. Bitcoin Spark brings a fresh wave of possibilities to crypto mining, and a union with the master of smart contracts would be heaven-bound for developers and miners with enormous opportunities.

Ethereum (ETH) is a decentralized blockchain infrastructure home to smart contracts and dApps. It hosts developers looking to create or execute smart contracts as per terms and conditions and supports a host of diverse applications. Ethereum self-executing contracts automatically enforce an agreed action when specific conditions occur. Ethereums digital currency, Ether (ETH), serves as a gas for smart contracts execution and transaction payments on the network.

The rich Ethereum ecosystem deploys DeFi platforms, tokenized assets, and more utilities. ETHs programmable nature and customized token capabilities make it a popular choice for blockchain-based projects. Ethereums ongoing upgrades, including the transition to Ethereum 2.0, promise improved scalability and security, setting the stage for potential price growth. The growing adoption of decentralized applications (dApps), smart contracts, and the thriving DeFi sector further support ETHs upward trajectory.

The prospect of a bullish year for Ethereum (ETH) and Bitcoin Spark (BTCS) has sparked a spirited debate within the crypto community, with many terming them: A Match Made in Blockchain Heaven. However, Ethereums scalability improvements could be offset by network congestion and gas fees, the reason BTCS is timely to offer innovative features.

Smart contracts are agreements that self-execute through a written code. These contracts automatically execute, enforce, or verify the agreed terms when certain conditions hold true. They operate on blockchain technology, most commonly associated with platforms like Ethereum. Smart contracts eliminate intermediaries (lawyers or banks) to oversee and enforce agreements. Instead, the code enforces the terms, ensuring transparency, security, and trust between parties. They can apply to various applications, such as financial transactions, real estate, etc.

For example, in a simple, smart contract scenario, if Party X agrees to pay a certain amount to Party Y when a specific condition is met (like product delivery), the smart contract code would automatically execute the payment to Party Y when the condition is verified on the blockchain. Smart contracts have the potential to streamline and automate various processes, making them more efficient and reducing the risk of human error.

Bitcoin Spark commands enormous attention in the rapidly evolving blockchain landscape with its unique consensus mechanism, Proof-of-Process (PoP). This approach rewards users based on their computational power and the amount staked.

The BTCS ICO offers the chance to acquire BTCS tokens at an affordable price. The current phase four features one BTCS at $2.25 with a 10% bonus offer for a chance to realize 489% gains after launch.

The BTCS ecosystem operates through a multifunctional Bitcoin Spark application, which will facilitate mining, rewards distribution, dApps, a built-in wallet, and support for various tokens. BTCS, through the app, employs a unique mechanism that benefits miners and the development team.

A percentage of the rewards goes towards the teams maintenance and operational costs, while the remaining portion is distributed to miners. This balanced approach ensures the projects sustainability while fostering a supportive community.

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Disclaimer: We advise readers to do their own research before interacting with any featured companies. The information provided is not financial or legal advice. Neither CaptainAltcoin nor any third party recommends buying or selling any financial products. Investing in cryptoassets is high-risk; consider the potential for loss. CaptainAltcoin is not liable for any damages or losses from using or relying on this content.

CaptainAltcoin's writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner. The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of CaptainAltcoin.com

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Casper Network first Layer-1 blockchain to enable native smart … – The Block

The Casper Association, the Swiss-based organisation that oversees the Casper blockchain and supports its continued decentralisation, has announced the successful 1.5 protocol upgrade.

This upgrade introduced a host of new and improved features, making Casper the only Layer-1 blockchain to enable the debugging of live, composable smart contracts on mainnet.

The 1.5 upgrade is a major landmark in our path to creating a blockchain environment that fosters innovation and paves the way for sustainable and impactful solutions to real-world challenges, said Ralf Kubli, board member at the Casper Association.

The Casper blockchain was designed from the ground up with the ability to be natively upgradeable without network halts or maintenance time. This foundational emphasis on adaptability is evident in the latest upgrade, which introduced features that enable the debugging of smart contracts in production, enhance the developer experience and accelerate time to market. The upgrade also streamlines the node joining process on the network, enhances the chains security features, improves the efficiency of redelegating tokens, and allows developers to run transactions against an active blockchain without committing to the results.

First of all, the 1.5 upgrade has introduced the Speculative Execution Endpoint, a new Casper-exclusive feature tailored specifically to the needs of enterprises. By allowing developers to test against production, the new speculative_exec endpoint can help ensure that contracts are reliable and cost-effective before actual deployment.

Unique to the Casper Network, the feature could be invaluable to enterprises looking to commit to large-scale deployments on the blockchain. Among them is IPwe, a global financial technology company revolutionising the IP space, that has recently enacted the largest deployment of assets to a blockchain network in history by logging millions of its patent assets as dynamic NFTs on Casper.

Further, the new endpoint also allows developers to calculate an estimate of the amount of gas a transaction will cost as well as execute their transactions against the mainnet to debug contracts all without committing these changes to the blockchain.

Another significant part of the Casper 1.5 upgrade is a number of enhancements in smart contract security and flexibility aimed at ensuring that the Casper network can support a wider variety of applications and use cases. As a result, smart contracts can now access the list of authorised keys, which is beneficial for multi-signature contracts and role-based security. The maximum stack height, which impacts how contracts run, has also been increased, providing more flexibility and compatibility with certain software packages.

On its part, the new Fast Sync feature allows nodes to join and participate in the Casper network more swiftly. Traditionally, nodes had to store all data from the beginning of the blockchain, but now they can join closer to the most recent block or the tip of the chain.

Fast Sync makes the network more robust and decentralised, addressing challenges faced by chains like Ethereum, including long node synchronisation times and state bloat. The fast sync feature also reduces the time to live (TTL) period from 24 hours to 18 hours, enhancing the networks sustainability and making it more efficient. This functionality can also considerably reduce the time required to set up a new node as well as allows operators to reduce the disk space needed for a node. It also introduces a much more powerful disaster recovery functionality, ensuring that critical work is not lost due to outages.

Following the upgrade to Casper 1.5, the delegator limit per validator the number of users who can stake their coins with a node operator has also been increased from 952 to 1200, and the process of re-delegating from one validator to another has been simplified. In particular, this removes the need for two separate calls to the blockchain, further increasing efficiency and making it easier for users to participate in the network and manage their stakes.

Finally, a series of miscellaneous updates, including the release of Casper-Client v2.0.0, Casper-types (v3.0.0), and JS SDK 2.13.3, now allows developers and node operators to access the latest tools and features to build on and maintain the Casper network. These updates have also enhanced security, functionality, and overall performance.

Caspers focus on the need to provide unique controls and data sensitivity around enterprise-level data drove the push to v1.5 and will continue to evolve the blockchain network over time as it enters into a state of constant upgradeability, unhampered by any maintenance periods. Recently, Casper has also secured a number of major partnerships with IBM, the Indian State of Telangana, Smart Media Labs, and many others.

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Duncan is an award-winning editor with more than 20 years experience in journalism. Having launched his tech journalism career as editor of Arabian Computer News in Dubai, he has since edited an array of tech and digital marketing publications, including Computer Business Review, TechWeekEurope, Figaro Digital, Digit and Marketing Gazette.

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Casper Network first Layer-1 blockchain to enable native smart ... - The Block

Ethereum Virtual Machine (EVM) and How It Executes Smart Contracts – BTC Peers

The Ethereum blockchain has become a revolutionary platform for decentralized applications and smart contracts. At the heart of Ethereum lies the Ethereum Virtual Machine (EVM), which serves as the runtime environment for smart contracts. The EVM is a Turing complete virtual machine that enables the deployment and execution of smart contracts on the Ethereum network.

The EVM is like a global decentralized computer containing millions of executable objects, each with its own permanent data store. It provides a sandboxed runtime environment where smart contracts are executed deterministically and can access resources like bandwidth, memory, and processing power.

Smart contracts are immutable computer programs that run on the EVM according to preset conditions agreed upon by the transacting parties. They are programmed to autonomously execute tasks when the conditions are met. The code and data of smart contracts are stored on the blockchain and distributed across Ethereum nodes.

When a smart contract is deployed on Ethereum, it is uploaded onto the blockchain and assigned a unique address. Users can then execute the smart contract by submitting a transaction and sending a message call to its address.

The transaction activates the smart contract code, which is then executed by the network of nodes on the EVM. Essentially, the EVM can be viewed as a large decentralized computer containing millions of objects called accounts. There are two types of accounts:

These accounts are controlled by users through private keys and contain ether that is used to pay for transaction fees on the network.

These accounts are controlled by contract code and contain the smart contract's data.

When a user initiates a transaction to execute a smart contract function, the transaction is broadcast to the network and collected by miners. The transaction contains information like the recipient address, sender address, amount of ether to transfer, and most importantly, the data payload that encodes the function to call in the smart contract.

Miners then validate the transaction against a set of rules, and if valid, execute the smart contract function against the EVM. The EVM compiles the smart contract bytecode, enabling the code to be executed. It also provides the smart contract access to the data payload and information about the originating address and available funds.

The miners compute the result of the execution, as well as the amount of gas required, and stores the output and new state of the smart contract onto the blockchain. The updated state includes any changes made by the smart contract function, such as the transfer of funds.

Finally, the miner collects the execution fee based on the amount of gas used and includes it as part of the block reward. The execution of the smart contract function is now complete.

The deterministic nature of the EVM ensures that if the same function is executed on multiple nodes, they will all compute the same output and new state. This allows the network to reach consensus on the execution to update the blockchain.

The EVM provides two types of storage for smart contracts - memory and storage. Understanding the difference between the two is important for optimizing smart contracts.

This is temporary and cleared between external function calls. Memory is volatile and resets after computation ends. It is faster to access but more expensive to use.

This is the permanent data storage of smart contracts. It is written to the blockchain. Storage is persistent and persists between function calls. It is slower to access but cheaper to use.

Well designed smart contracts efficiently use memory and storage to optimize computation and reduce costs. For example, simple variables and counters that do not need persistence can be stored in memory while data that needs to persist, like a user's balance, can be stored in a contract's storage.

The concept of gas is crucial in the EVM to incentivize efficient computation and prevent infinite loops or other computational wastage.

When a transaction is executed, gas refers to the fee required to perform the computation. The gas cost of a transaction is the total amount of gas used multiplied by the gas price (in Ether). The gas mechanism ensures that complex computations that require more computational resources cost more, while simple computations have lower fees.

The gas cost is deducted from the user's account that initiated the transaction. The miner that executes the transaction and computes the result is awarded the gas cost as a fee. This incentivizes miners to include transactions with higher gas fees.

The deterministic nature of the EVM ensures that miners will arrive at the same gas cost for a transaction. Gas also prevents bugs or infinite loops in a smart contract from exhausting the network's computational resources. If a transaction runs out of gas during execution, any state changes are reverted, but the user still has to pay for the gas used up until that point.

The concept of gas makes the EVM a practical and economically sustainable transaction processing and smart contract execution engine.

The Ethereum Virtual Machine represents one of the most significant innovations in blockchain technology. As the world becomes more digitally connected, decentralized systems like Ethereum will power greater automation, transparency and efficiency across industries through smart contracts. The deterministic and Turing complete nature of the EVM provides the reliability and computational completeness required for such applications.

Looking ahead, the EVM is poised to drive the web 3.0 revolution by serving as the trust layer for decentralized finance (DeFi), non-fungible tokens (NFTs), decentralized autonomous organizations (DAOs), and the metaverse. As more assets become tokenized on blockchain, the need for customizable and transparent rulesets will grow, and the EVM will be at the center of it all.

Beyond finance, the EVM could even be used for decentralized voting, transparent supply chains, identity management and disintermediating industries like insurance. The most profound impacts may be ones we can't even conceive today. Such is the nature of exponential technological change.

For smart contracts and the EVM to realize their full potential, blockchain scalability remains an active area of research. Current scaling solutions include:

The core challenges are ensuring these solutions preserve decentralization, security and transparency while enhancing scalability. Vitalik Buterin's vision of Ethereum as a "world computer" hinges on the ecosystem's ability to scale efficiently. With research ongoing, the future looks promising for Ethereum to deliver on its vast potential.

Web 3.0 represents an evolution of the internet toward decentralization, openness and enhanced user control. Some of its key aspects include:

While still in its infancy, Web 3.0 represents an important shift in how the internet operates and creates value. Vitalik Buterin refers to it as the "internet of value". Its success depends on mainstream adoption, which will be driven by compelling decentralized applications that put users first. The future looks bright as the technology matures.

The Ethereum Virtual Machine is a game changer for enabling decentralized computing on a global scale. By executing smart contracts in a secure, deterministic manner, the EVM allows customizable and transparent business logic to run on blockchain. This opens up endless possibilities for decentralized applications in finance, governance, identity and beyond that can reduce corruption and monopolistic rent-seeking.

For the EVM and Web 3.0 vision to succeed, blockchain scalability and mainstream adoption remain key challenges. However, with some of the brightest minds in computer science and cryptography working on these issues, the future looks promising. The next decade may witness blockchain and smart contracts transforming industries in ways we cannot yet conceive.

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Ethereum Virtual Machine (EVM) and How It Executes Smart Contracts - BTC Peers