smart contract

EOS Shows Transparency is Essential in Resolving Smart Contract Disputes

Much has been made online over EOS’s handling of its first arbitration case earlier this week. For those who don’t know, a group of the chain’s block producers made a decision to freeze specific accounts in response to an apparent theft. An arbiter has ruled to freeze the tokens for now and return them from the alleged thieves to their original holders. It appears, from the evidence, that the block producers judged the situation correctly as an attempted theft and that justice was served.

However, despite the seemingly happy resolution of this specific incident, the way it was handled raises important and troubling questions for EOS and the broader blockchain community, as many observers have noted in the days since the event. Crucially, the decision was made by an anonymous group of network insiders with no input from the broader community or recourse to challenge the decision. This inequitable decision-making power – you might call it centralization – seems to go against the egalitarian ethos of the blockchain community as well as EOS’s own Constitution.

This is not to imply that EOS is wholly in the wrong. As blockchain entrepreneurs ourselves, we are intimately familiar with the unexpected twists and turns inherent in building a technology platform. We are inclined to agree with those who say EOS’s action was an understandable, one-off fix to a fast-moving situation in which the correct action was clear. It was a fudge, but an understandable one, and certainly preferable to the alternative in that instant. Nevertheless, it underscores how much work there is left to do if we are to build an industry with strong, transparent, reliable safeguards for smart contracts.

There are some concrete solutions to which we as a community can make a commitment in order to build the strongest possible blockchain future. In the case of smart contracts and arbitration, businesses should adopt a few fundamental best practices.

First, we must remember that a strong blockchain platform provides the tools for people to make good decisions. Decentralization does not mean insulation; it just means that participants have control over their assets and information and with whom they decide to share them. Mechanisms for dispute resolution must be robust, but transparent. The reason so many commenters are upset with EOS is the opacity with which it and its block producers acted. All participants must understand and be able to trust the parameters of any transaction they enter into. This transparency must extend to the arbiters, and the community should be able to remove them if they are judged to be corrupt. Transparency, an understanding of best practices, and a strong, equitable system for resolving disputes will be increasingly important as the space matures.

EOS has certainly achieved a great deal already, and we celebrate the progress they have made in moving the technology forward. But that should not distract us, as this recent incident makes clear, from doggedly continuing to establish the tools and safeguards the blockchain space will need if it is to be successful. Transparency and reliability in smart contract dispute resolution are a great place to start.

Sagewise To Build Its Smart Contract Resolution Ecosystem on Hedera Hashgraph Platform

LOS ANGELES – June 6, 2018 – Providing peace of mind to all parties to a smart contract, technology company Sagewise will utilize the Hedera Hashgraph platform to build its ecosystem on top of. A blazing fast blockchain-alternative, Hedera Hashgraph will serve as the basis of Sagewise’s testnet, as the company realizes its mission to deliver transactional confidence and create a new legal paradigm.

Co-founded by Amy Wan Esq., an award-winning leader in legal tech, and Dan Rice, a veteran software engineering luminary and blockchain expert, Sagewise offers a proprietary SDK to mitigate variables such as the quality of smart contract coding and evolving situations. Sagewise does this by building in a layer of smart contract monitoring, notification, freezing, and dispute resolution to ensure that execution of a smart contract reflects the user’s intent. The hashgraph algorithm — a consensus mechanism based on a virtual voting algorithm combined with the gossip protocol — will help Sagewise achieve its goal by providing a framework for quick, fair, efficient and secure consensus.

“We believe justice should be decentralized, so our objective is to provide smart contract users a toolkit to settle errors and disputes, lest they end up with unintended outcomes. Smart contract losses exceeded half a billion U.S. dollars in value in 2017, so we feel it is integral to address the void in the industry,” said Amy Wan, Co-founder and CEO of Sagewise. “In order to reach our objectives, we knew scaling was of utmost importance, which is why we decided to work with Hedera Hashgraph. Its technology does not have the technical limitations of the existing blockchain, and provides distributed consensus.”

“From supply chain to financial services, smart contracts can be used in almost every industry; however, despite widespread adoption, the possibility for dispute is ever-present,” said Jordan Fried, Global Vice President of Business Development for Hedera Hashgraph. “Sagewise’s mission to help smart contract users quickly resolve disputes and reach consensus is greatly needed in the market, and we are pleased the team is choosing to build on top of hashgraph.”

For more information, please visit www.sagewise.io or view the Hedera whitepaper.

About Sagewise

Founded in 2017, Sagewise is a technology company focused on the efficient resolution of disputes involving smart contracts. Sagewise has developed a product comprising a smart contract safety net for blockchain users. The company’s proprietary SDK, released in April 2018, provides the tools and infrastructure needed for the effective handling of disputes at any stage in the development and execution of smart contracts, freezing contracts in place while they are being resolved. Sagewise’s mission is to provide peace of mind to all parties to a smart contract, ensuring that the outcome of a blockchain endeavor is consistent with the parties’ true intent.

To learn more about Sagewise, please visit sagewise.io or follow the company on Facebook, LinkedIn, and Twitter.

Meet the team: VP of Special Projects Dat Nguyen

Today we highlight Sagewise’s VP of Special Projects, Dat Nguyen. A former patent litigator, Dat’s strong technical and legal experience allows him to bridge the divide between technology and law. Having spent his career at the intersection of technology and law, Dat brings a unique set of skills to deliver Sagewise’s vision of building a platform that provides a safety net for smart contracts, governance, and transactional confidence into the blockchain.

Prior to joining Sagewise, Dat was a business consultant advising and investing in startups from a wide range of industries including hospitality, healthcare, e-commerce, retail and video gaming. Dat also counseled clients in resolving their disputes efficiently outside of courts through mediation and arbitration.

Dat started his career as a commercial and patent litigator at Orrick, Herrington & Sutcliffe, LLP and then at Milbank, Tweed, Hadley & McCloy LLP. Dat has represented numerous Fortune 100 companies in resolving their commercial — and specifically patent — disputes. In addition, he counseled numerous clients regarding patent strategy and licensing. He has experience in a wide range of technologies including: cellular, semiconductors, memory, audio and video standards, video gaming, virtual reality, graphics processing, blockchain, and data encryption.

Along with Amy and Dan, Dat is also an active member in the Southern California blockchain and legal community. He has spoken on a wide variety of topics including: blockchain basics; the limitation of smart contracts and online smart contract dispute resolution; governance, data management, and decentralization; cryptocurrency; and IP considerations in the blockchain.

From his extensive litigation experience, Dat understands firsthand the inefficiencies and expense related with litigation. He is hopeful that blockchain technology can bring numerous benefits to the business world in minimizing and making disputes more efficient. However, before such benefits can be realized, there is a lot that still needs to be done on the blockchain. Dat brings his real-world experience of contract disputes and dispute resolution to the team and works closely with both founders Amy and Dan in developing each component of the Sagewise ecosystem.

Meet the Sagewise Team: Founder Amy Wan

Amidst the many product announcements, user stories and other important milestones we will be posting here over the coming months, we want to make sure we take time to introduce the team behind Sagewise. Ultimately, the success of a project comes down to the skill and dedication of the people behind it, and Sagewise has one of the strongest teams in the blockchain space, along with particular expertise in the legal sphere. In this post, we highlight the Founder of Sagewise, Amy Wan.

Amy founded Sagewise in 2018 after realizing the potential chaos that could arise from smart contract disputes. Her interest in smart contracts stems from her legal background and her experience in the crypto space; the intersection of these two passions formed the foundation of the Sagewise concept. As an attorney, Amy has served as a Partner at a boutique securities law firm and General Counsel of a fintech company. She has also authored numerous publications, including the Bloomberg Law guide to ICOs and chapters of the LexisNexis’ Private Equity Guide. Amy was named one of the “Top 10 Women to Watch” by the ABA Journal in 2014, one of 18 millennials changing legaltech by Law.com in 2018, and recognized as a top woman in legaltech by the ABA Legal Technology Resource Center in 2018. She also co-founded Legal Hackers LA, a recurring meetup for practitioners, students, educators and entrepreneurs to explore new ideas related to legal practice and entrepreneurship.

In 2015, Los Angeles Business Journal named Amy a Finalist for Corporate Counsel of the Year. She is also a Senior Contributor to Crowdfund Insider. Prior to her legal career, she served as a Presidential Management Fellow specializing in international trade and regulatory affairs at the U.S. Department of Commerce, U.S. Department of State, and U.S. Department of Transportation. A thought leader in the space, Amy frequently speaks at conferences and events, events including SXSW, PLI, ACMA, and blockchain conferences. Topics she has discussed have included SEC regulation of ICOs and the security/utility token question; crypto self-governance; optimal structuring of token economics; flaws in current models of smart contracts; and the regulatory environment for post-ICO businesses. She received an LL.M. from the London School of Economics and her JD from the University of Southern California.

Amy is passionate about crypto and believes she can leverage her unique background to bring positive change and real solutions to the space. Blockchain remains a brand new technology, and as it grows over the coming years, smart contracts infrastructure will assume and exponentially more important role in everyday business transactions. Making sure those contracts do the jobs they are supposed to, that they fulfill their promise of making markets smoother and safer, is the mission of Sagewise and its founder.

Sagewise’s Vision to Build the Safety Net for Smart Contracts

Last month, we announced the launch of the Sagewise SDK. This marks a major milestone in the development of our business and the safety of the blockchain ecosystem overall. It is a step towards achieving our long-term vision of providing an infrastructure to address the inevitable issues that will arise around smart contracts. In this post, we want to provide a little more information about this vision and and our plan to achieve it.

Although most participants in the blockchain space probably don’t realize this, many smart contracts have errors or oversights in their code bases that will lead to significant problems for their businesses and for users down the road. Even if the smart contract code is perfect, situations inevitably arise that could not have been predicted by the developers writing the contract. Since 99% of people cannot audit (much less read) a smart contract’s code for themselves, they have no way of confirming the quality of a product other than trusting the word of a developer.

This situation is bound to lead to errors and misunderstandings. Over the coming weeks, we will publish a series of blogs outlining theoretical situations that can arise from such problems. Crucially, there is currently no way to resolve disputes arising from an error in a smart contract. The fact that the contracts are “smart” and automatically execute based on pre-set requirements can actually exacerbate disputes if the contract is not correctly constructed. Because the blockchain space remains so young, many parties remain unaware of the existence or the potential magnitude of this issue.

Sagewise’s vision is to build a fully-functioning plugin solution that allows smart contract users to achieve their true transactional intent, including the ability to resolve the disputes that will inevitably arise around smart contracts as they are bound to arise from any form of human interaction. Sagewise can “freeze” a smart contract in place while disputes are mediated. It can devise a number of forms of resolution depending on the preferences of the parties involved and on whether dispute resolution was built in to the original contract. Our goal is to provide peace of mind and the expectation of an equitable outcome for blockchain transactions – a toolkit to make sure smart contracts are doing their jobs. The safety net provided by Sagewise is intended to grow into a full suite of capabilities that will be indispensable as the crypto space expands. Disputes around token offerings are a problem; disputes around smart contracts that underpin entire supply chains are a crisis. We are building a platform that addresses the enormous future of blockchain, a future in which broad mainstream adoption is a reality and the integrity of contracts is paramount.

Sagewise Announces Alpha Release of Ethereum Smart Contract SDK To Combat the More than Half a Billion Dollars Lost in Smart Contracts in 2017

Today, we are proud to announce the alpha release of the Sagewise smart contract SDK. Built on the Ethereum blockchain, the SDK is a core component of Sagewise’s toolkit for unforeseen errors and disputes in smart contracts and marks a key milestone in its overall development. Before getting into the details of today’s launch, let me start with a little background on what we hope to accomplish at Sagewise.

Modern day smart contracts started with the launch of Ethereum in 2015 and, in a lot of ways, represented the dawn of fully programmable money. From the outset, one of the biggest concerns of the community was that combining human-created code with instant money transfer could frequently and unexpectedly result in the loss of user funds. Because less than one percent of the earth’s population can program or read code, cryptocurrency-related transactions–including smart contracts do not represent an area where we can reasonably tell a person to “DYOR” (do your own research), as often stated in the cryptocurrency community. Instead, smart contracts represent something very similar to traditional paper contracts in that they cannot be adequately understood or audited by ordinary people. While anyone can attempt to read acontract, if they lack a background in programming or law, respectively, it is highly unlikely they  will be able to catch all the nuances and find all the holes. As an example, someone with no programming background cannot be expected to be aware of all the possible obfuscated bugs that may exist in a smart contract.

Which is where we find ourselves today. More than a half a billion dollars was lost to smart contract coding bugs in 2017. The initial fears and predictions are now reality, and it’s time to figure out how to fix it. Many people are working on this issue through two different approaches:

  1. Making smart contract code better through better coding, tools, and audits
  2. Resolving issues that arise through mediation and dispute resolution

At Sagewise, we are focused on the latter. We are bringing transactional confidence to smart contracts by building infrastructure that acts as a safety net for unforeseen circumstances, whether that be coding errors, security vulnerabilities, changes in circumstances, or disputes. We chose to focus on this because not all issues related to smart contracts can be foreseen–even with the most careful, thoughtful coding. Smart contracts can get bad data from an oracle, or a situation can occur that was never considered. While code is static, human situations are not–we live in a world where volcanoes can halt air travel, strikes can delay commerce, and seemingly unlikely human actions can result in situations no one thought possible. Code cannot be aware of every future possibility. The question is, how do you put a safety net around a smart contract without completely damaging the immutability and decentralization?

Our release today provides a peek at our approach and can be summarized by the following features:

  • All functions in the contract can be frozen;
  • Contracting parties do not have any special control aside from the ability to start a dispute, which freezes execution of the smart contract;
  • Dispute resolution vendors are given complete access to the contract via ‘Administrator Mode’, but this only is available when a dispute has been initiated by one of the contracting parties. This allows contracting parties to fix any issues that may have occurred.

In coming months, we plan to add several more features to the SDK to improve its robustness and usability. Alongside the Sagewise ContractCanary–a smart contract email monitoring and notification system available to licensees– the Sagewise SDK prevents unforeseen execution of a smart contract. Sagewise also  plans to release other support tools as part of its infrastructure that will help bring the entire transactional process together, from documentation of smart contract intent to dispute resolution process handling.

We welcome feedback and engagement by community members, who can sign up for updates at sagewise.io and engage via our Telegram channel at t.me/sagewise.

Our alpha SDK repository can be found here.