What are hybrid smart contracts?
Hybrid smart contracts aim to combine on-chain blockchain code with off-chain data and computation.
They utilize decentralized oracle networks to extend their capabilities and aim to unlock new use cases.
Hybrid smart contracts strive to enhance collaboration across various industries by aiming to provide a more transparent and fair environment.
What is a Hybrid Smart Contract?
A hybrid smart contract is an advanced form of a smart contract that aims to combine on-chain blockchain infrastructure with off-chain data and computation. This combination is facilitated by decentralized oracle networks (DONs).
Hybrid smart contracts aim to retain the immutable and secure features of blockchain technology while leveraging off-chain oracle services to obtain novel capabilities. This unique blend allows hybrid smart contracts to aim to unlock use cases and functionality that wouldn't be possible using just one of the components.
How do Hybrid Smart Contracts Work?
The mechanics of a hybrid smart contract involve a data request from the blockchain to the decentralized oracle network whenever off-chain data is needed. The oracle smart contract within the DON retrieves this data and logs the corresponding request details.
The log event informs off-chain nodes, which are then responsible for gathering data from the log event, verifying it, and delivering it back on-chain for smart contract use. This process aims to ensure that the hybrid smart contract can access and utilize off-chain data while maintaining the decentralization and security of the blockchain.
Why are Hybrid Smart Contracts Important?
Hybrid smart contracts aim to address the limitations of centralized contract systems, which are often asymmetric, with one party typically having an unfair influence over the process.
By replacing brand-based trust with math-based trust, hybrid smart contracts strive to provide a more transparent and fair environment for collaboration. They aim to enhance how society collaborates across nearly every major industry, from finance to healthcare, by providing a method of enforcing contractual obligations that aims to be more secure, transparent, and efficient.
What are the Extended Abilities of Hybrid Smart Contracts?
Hybrid smart contracts aim to process off-chain data while retaining the decentralization that characterizes blockchain networks. This dual functionality aims to enable the development of more sophisticated blockchain-based applications, thereby broadening the scope of possibilities within the blockchain landscape.
For example, hybrid smart contracts aim to implement mechanisms that have higher computational complexity than their non-hybrid counterparts, such as certain types of auction mechanisms.
How Can Hybrid Smart Contract Technology Help Businesses?
Hybrid smart contracts aim to bring changes to various industries by providing a method of enforcing contracts that aims to be more efficient and transparent.
They aim to replace traditional contracts in scenarios where outcomes are based on real-world events, as long as there is an oracle network that can provide the necessary off-chain data. This could be particularly beneficial in industries such as insurance, where outcomes are often based on external events.
By automating the enforcement of these contracts, businesses may potentially reduce the time and resources spent on contract management, dispute resolution, and enforcement.
