What is a smart contract?
According to IBM.com, smart contracts are programs stored on a blockchain that run when predetermined conditions are met. On the Ethereum blockchain, it’s defined as a collection of code (its functions) and data (its state) that resides at a specific address on the Ethereum blockchain.
In simple terms, smart contracts:
- store rules;
- verify rules;
- automatically execute rules.
They automatically execute code when certain conditions are met. For example, when you exchange cryptocurrencies on a decentralized exchange, it involves a smart contract. The participants of the exchange don’t have to know or contact each other, there is no human intermediary and no time delays because everything is automated. Smart contracts work by following simple “if…then…” statements that are written into code on a blockchain.
Smart contracts are usually programmed by developers and are trustless, decentralized, and transparent. In most cases they can’t be modified once deployed. They have become the building blocks of an entire ecosystem of decentralized applications (dApps) and represent a major focal point of blockchain development in general according to Gemini.com.
There are many use cases for smart contracts. They can be used in DAOs, in gaming NFTs, they can potentially be used as legally binding contracts and to sell real-estate. They can also automate processes in the healthcare industry minimizing delays.
Disadvantages of smart contracts
Once a contract is deployed it’s difficult to make changes to it as it usually requires a consensus to make any changes on a blockchain. Besides, smart contracts are transparent and open to everyone. That means anyone can try and test for bugs and exploits and try to use them if found.
Smart contract analytics
If you’re a smart contract developer, right now it’s pretty difficult to understand exactly how people are using your smart contracts. Web developers use Mixpanel and Google Analytics with several add-ons to monitor web2 activity. For smart contract developers, such monitoring usually requires a team of engineers building custom software. Today, analyzing smart contract activity involves viewing data in or crawling data from blockchain explorers. The process is tedious and unreliable, and the data is difficult to interpret.
Our team at Moonstream.to is bringing the same kind of automated analytics to web3. Moonstream automatically understands smart contracts. All that a smart contract developer has to do is tell Moonstream where their smart contracts are deployed, and Moonstream starts showing them how those contracts are being used right away.
With analytics platforms like Moonstream, you can understand how people are using your smart contracts. For ERC20 tokens, you can see which exchanges your token is gaining or losing popularity on. For NFTs, you can see which marketplaces (like OpenSea) your NFTs are trading well on, and which addresses are building large collections of your tokens. You can identify when someone is trying to exploit vulnerabilities in your smart contract and set up alarms for suspicious activity.
Smart contracts are important for decentralized platforms and can potentially revolutionize many industries with automation and transparency. If you want to find out more about smart contract analytics, join us on Discord or visit our website.