Astra Protocol Team Explains How to Create Trust Beyond Blockchain-based Smart Contracts
The use of blockchain-powered smart contracts, which automate and support a democratized decision-making system, is becoming a salient feature of nearly all decentralized projects.
Smart contracts are considered an essential component of any decentralized system, including the emerging decentralized finance (DeFi) sector, because such automated agreements help establish trust in platforms or projects. This way, a newly-launched initiative may be perceived (and actually be) as safe for investment.
Given the recent increase of new DeFi projects, as well as the rising number of disturbing exits, a blockchain initiative may need more than just smart contracts to really earn the trust of investors and stakeholders. So, what can be done that would make a meaningful and positive difference?
Patenting Smart Contracts May Address Key Business Requirements
One viable solution to these issues is a patent. Unlike the blockchain itself, which is an open-source tech and data structure that can’t be patented (in most scenarios), smart contracts can form new digital agreements that may be well-suited for a specific project. This is the reason why patenting smart contracts may be considered ethical and even essential for blockchain or distributed ledger technology (DLT) projects.
Proof of Trust is an innovation that aims to support the role of patents as a key part of a company’s end-to-end business processes.
The intellectual property (IP) of Proof of Trust is reported to number more than 30 awarded patent claims, with all patents reportedly being issued by the US Patent and Trademark Office. This could give investors a lot more confidence in a project and its commitment to deliver on its promises.
In addition to these developments, the Astra Protocol has been developed to provide decentralized organizations a legitimate means to adhere to regulatory guidelines while remaining operating in a decentralized manner. At a critical time in which there’s a sharp rise in fraudulent activity, Astra plans to provide the confidence required by industry participants to enter the crypto space.
Astra intends to offer the legal technology or Legaltech layer for crypto that may be integrated with emerging DeFi protocols. Funds must always reach the intended destination in a safe manner, which is what Astra plans to provide.
And in case there are any problems, then the team can take care of them and return the money in a seamless manner. Any issues can be addressed amicably with the addition of a conflict clause (which is actually what Proof of Trust is) to the platform and its smart contract.
As noted by the Astra team, this is all based on a Proof of Trust system, which is a built-in protection layer and mechanism that ensures peace of mind when performing monetary transfers and finalizing contracts through extra-judicial and extra-jurisdictional dispute resolution systems.
Establishing Trust Beyond Just Smart Contracts
It’s worth noting that filing for a patent can take a really long time and the process can be quite intense. On average, it can take anywhere between 12 to 22 months for a patent application to be processed and approved.
And the majority of patents are issued for a limited timeframe, which is usually around 20 years, and after this period has elapsed, the patent is made open-source. Moreover, the Astra Protocol team explains that greater trust also means more responsibility, for any initiative, especially when having to put in the additional time and effort.
As the crypto markets continue to mature, there’s been an alarming increase in illicit activities carried out by blockchain-related projects. That’s why it is important to look out for reasons to establish trust in a project beyond just smart contracts. In the majority of cases, a patented project should provide the reassurance that’s required to get involved.
The team at Astra Protocol has also previously noted that operating within DeFi space comes with “unpredictability” but also key opportunities. They’ve explained that many of the potential benefits of the underlying blockchain and smart contract tech also come with certain challenges.
The DeFi market is growing steadily and malicious actors are known to anonymously exploit different weaknesses in protocols to steal large amounts of funds.
In these scenarios, there’s usually no path to justice for the victims, the Astra Protocol team has explained. They also noted that with its rise in adoption during 2021, the news that often gets associated with DeFi involves damaging security breaches.
In 2020, 17 large DeFi scams had taken place and led to a loss of at least $154 million, the Astra Protocol team reveals. And by July of this year, DeFi-related exploits represented over 75% of crypto-related crime.
Providing a Decentralized LegalTech Layer
The Astra Protocol team has pointed out that there’s “a signal of uncertainty to potential investors in the sector” and motivation for law enforcement and financial authorities “to intervene within the market.”
In order to address these issues, Astra aims to serve as the decentralized legal technology platform focused on protecting industry participants from criminal activities. Astra also mentioned that they aim to bring trust to the DeFi market and reassure users that their investments are adequately protected.
With the appropriate protection from Astra, DeFi and digital assets are set for institutional adoption, the developers have noted.