Regulating blockchain smart contracts with agent-based markets

Abstract

The fast pace in blockchain development introduced the concept of Smart Contract as a way to deploy digital contracts as pieces of code on the blockchain network. Smart contracts differ from the traditional ones in many aspects related to their automated execution. Still, there are many open issues, such as legal frameworks and regulatory aspects. The study of agreement technologies and agent-based market systems have already dealt with some of these issues and can help us discuss solutions for the future. In this paper, we present an overview of the agreement pipeline, considering regulation-enabled systems and compare the implementation of auction agreements purely on the blockchain with a hybrid approach where markets are active agents that can ensure regulation outside the contractual phase and contract execution runs on blockchain. We have compared the cost of failing negotiations, that is always charged in the blockchain case.