The true future of smart contracts on blockchain platforms has yet to be fully realized and remains in very early stages. There have been some developments to push the technology into the mainstream, but few critical applications have been able to use smart contracts to reliably manage business transactions and handle billions of dollars in responsibility, yet. On Wednesday, the Tezos Foundation announced it has issued a grant to a company, called Clause, which will develop a “legal smart contract layer” on the Tezos platform.
The concept of a “smart contract” can be best defined as a piece of computer software, which runs on a blockchain, such as Tezos, with the sole intention of facilitating, verifying and/or enforcing the performance of a contract between parties. There is nearly an unlimited number of use cases for this type of technology once it is implemented in the right way. This is where Clause comes into the play and the reason why the Tezos Foundation has decided that backing such an effort into legal smart contracts is worthwhile to the future success and growth of the Tezos platform.
Clause, which is based in New York City, is a software company that provides real-time data from the Internet of things, web services, and business and accounting systems to update prices, warranties, delivery requirements, and other terms. In other words, a host of areas where legal smart contracts on a global blockchain could be implemented to make all of these processes faster and more secure. Clause specializes in bridging the gap between these technologies, that rely on a set framework, or “contract,” to be easily implemented on a blockchain by acting as a simple API layer for their customers to interact with. According to their website, Clause customers can simply connect “contracts to the Internet of Things” and allow Clause APIs to “to self-manage commercial relationships and business processes.”
Clause’s software is built on something call the Accord Project, which is a set of open source software tools for legally enforceable smart contracts. Accord has built a strong backing in technology and legal circles, including support from major law firms, tech giants such as IBM along with major players in finance and accounting. Clause will be building on technology of the Accord Project which is already being used and developed by businesses around the globe.
Ergo to Michelson
If you want to understand some of the technology down in the weeds of Tezos smart contracts, keep reading. You probably already know that Michelson is the language developed for Tezos which provides a secure and powerful language to write smart contracts with. However, Michelson is yet another language in a long list of languages that not everyone, or every company, is familiar with or wants to invest time in learning. This is again where Clause comes in to fill the gap and make it easier for businesses to use Michelson for contracts on the Tezos platform.
Clause will, specifically as part of their Foundation grant, develop what is called an “Ergo” to the Michelson language. Ergo is a domain-specific language that captures the execution logic of legal contracts. To describe it another way, think of Ergo to legal language contracts what HTML is to simple web page development. Ergo was specifically intended to be accessible to lawyers who create the corresponding prose for computable legal contracts. In other words, just like with HTML and writing a simple web page, you don’t need to be a computer scientist to write a smart contract using Ergo assuming you already have a legal background. Ergo’s major initiative is to transform contract management and contract automation by digitizing contracts. The development of an Ergo to Michelson will provide a standardized way for companies to build smart legal contracts on the Tezos platform by utilizing accessible technology they may already be familiar with.
This is another big step on the road to wider adoption of Tezos, in corporate circles, and a big step toward positioning Tezos as an enterprise-level smart contract platform. You can read the complete announcement from the Tezos Foundation on the grant to Clause, Inc. here.