Smart contracts, functioning as self-executing code on digital ledgers, streamline transactions autonomously, bypassing the need for intermediaries. Open-source smart contracts enhance transparency and collaboration, empowering users to validate code integrity and identify vulnerabilities, thereby reinforcing trust and security.
What are some of the different types of smart contracts?
Smart contracts make up an integral part of the blockchain ecosystem, automating predefined actions based on specific conditions. These are the different types we will see in action on Stellar:
Smart Legal Contracts: These are based on cause and effect, akin to traditional legal contracts. They can be executed automatically when predetermined conditions are met without human intervention. All parties can provide digital signatures to formalize the contract.
Decentralized Autonomous Organizations (DAOs): DAOs are self-governing entities managed by smart contracts that allow decentralized decision-making and voting by token holders. They are used to allocate funds, manage projects, and maintain transparency.
Application Logic Contracts: Designed to handle specific functionalities within DApps, they include contracts for minting and managing tokens, lending, and gaming.
How does Soroban enable smart contracts on the Stellar Network?
Smart contracts revolutionize web3 applications across diverse domains, spanning finance to supply chain management. Their transparency, immutability, and automated execution render them indispensable in the blockchain ecosystem.
Soroban aims to bring the power of smart contracts to the Stellar Network by acting as a bridge, extending Stellar’s functionality by enabling smart contracts. By leveraging the existing Stellar infrastructure, Soroban adds programmability features.
Soroban’s Key Features
- Smart Contract Execution: Soroban creates a smart contract layer on top of Stellar that is customizable and executes automatically.
- Turing-Complete Language: Supports a Turing-Complete programming language which developers can use to express complex logic and create a variety of smart contract formats.
- Interoperability: Soroban seamlessly integrates with Stellar assets, accounts and transactions.
- Security: Soroban follows Stellar’s security protocol, maintaining transparency in contract execution.
- Community–Driven: An open-source project, accepting contributions from developers and the community.
Soroban extends Stellar’s capabilities by introducing smart contracts, opening up a world of possibilities for developers and businesses within the Stellar ecosystem.
We are now in Soroban Phase 2, marking the deployment of a user-ready Mainnet where anyone can deploy and interact with smart contracts. At this stage, the network is ready for more extensive smart contract utilization.
We are currently witnessing a significant transition from testnet interactions with cryptocurrencies to their actual deployment and use on a main server. In this new phase, real transactions can occur on a blockchain server, facilitating exchanges between companies and even countries.
As this transition unfolds, we anticipate an upsurge in demand within our burgeoning digital economy. The value of cryptocurrencies will be influenced by genuine market forces, reflecting their true worth. However, it’s important to note that this shift does not yet impact the value of traditional paper currencies.
One notable development is the liquidation of digital assets, particularly Stablecoins, which represent a bridge between the digital and fiat worlds. As these assets are converted into real-world value, they will exert fresh price pressures over time.
How are Stellar developers building smart contracts?
Stellar developers can create smart contracts using the Soroban framework. Here’s a high-level guide on how to build smart contracts on the Stellar Network:
- Developers should have a basic understanding of smart contracts, Stellar accounts, transaction, assets, and protocol.
- Install the Soroban tools set, necessary for writing, deploying and managing smart contracts.
- Write smart contracts with Turing-complete programming language to determine the logic and conditions of the contract. Define input data, triggers and actions.
- Compile smart contract code and deploy to Stellar blockchain, specifying contact’s Stellar address.
- Smart contracts interact with native assets, i.e. XLM. Asset transfers, payments, etc. defined.
- Test and debug in a sandbox environment.
- Deploy to Mainnet
- Monitor and maintain, release upgrades and bug fixes as necessary.
What are the differences between Ripple and Stellar smart contracts?
Ripple is limited in scope to cross-border payments with XRP, designed to facilitate institutions and financial entities. Its approach is centralized, and it is dependent on trusted nodes. Holding XRP is not required to participate in the network.
Stellar, on the other hand, delivers peer-to-peer services, enabling currency exchange without third parties. It uses a decentralized model based on the Stellar Consensus Protocol. Holding a minimum of one XLM is essential for participation. Stellar has the potential to reach the millions of unbanked and offers a trustworthy method for saving and sending money.
Many of us will be learning smart contracts basics throughout the coming years as all types of contracts move over to the Stellar Network. We will be incentivized by the abundant opportunities they afford us and complete financial sovereignty they promise.
