Would you be willing to use a smart contract if hundreds of millions of dollars were at stake?
Although they’ve been dabbling in experiments to see how DeFi works, few governments, banks, and corporations are currently prepared to trust big money to smart contracts. One of the big stumbling blocks is that some of the most popular smart contract programming languages out there—notably Solidity for Ethereum—are considered prone to error.
As a result, the industry is hobbled because secure, effective code cannot be developed, and it’s often impossible to know how a smart contract will behave until it is executed, according to a June 11 release by Algorand, a decentralized finance-focused blockchain platform.
Now, it has joined forces with decentralized software firm Blockstack to develop a new smart contract language that delivers safety, security and predictability—helping the industry to mature, removing a significant barrier to achieving the levels of adoption smart contracts arguably deserve, and (hopefully) preventing user funds from being put at risk.
Their alternative smart contract language is called Clarity. The goal is simple: to create a purpose-built language specifically for developers working on high-stakes DeFi transactions that run into nine figures.
“We could get away with using insecure languages when the stakes were low, but with increasing real-world use cases, it is time for a serious upgrade.”
The two companies say that Clarity will be a “decidable” language—and as a result, developers will know with mathematical certainty how a smart contract will (and won’t) act ahead of time. This is one of the main hurdles that stand in the way of large-scale, serious use by some of the world’s biggest organizations.
“Smart contracts are an integral driver of blockchain adoption, as they eliminate the need for a third-party intermediary and facilitate frictionless economic exchange, said Algorand’s founder, Dr. Silvio Micali.
“With high volumes—and values—of assets stored in smart contracts, the emergence of a next generation programming language such as Clarity has the potential to unlock blockchain-based solutions for large-scale enterprises and governments, which demand a higher level of trust and security,” he added.
Ali and Micali will be leading their respective Clarity design teams.
Underlining why resilient smart contract code is so important—with a reference that will send chills down the spine of those with a long memory—Algorand and Blockstack pointed to the consequences of the DAO hack, where an attacker exploited serious vulnerabilities in smart contracts and stole 3.6 million ether. Ouch.
Both companies hope that Clarity will eventually help achieve interchain communication—and other blockchain providers are being invited “to join them on this open-source initiative to avoid walled gardens that traditionally require a third-party intermediary,” said the release.
Breaking down walled gardens has been a popular theme this month. On June 2, companies ranging from IBM and Nasdaq to Hyperledger and Hedera Hashgraph announced the formation of the InterWork Alliance, with the goal of creating global standards for tokenizing real-world assets.
Someone’s been busy
That wasn’t the only news to emerge from Algorand today. On June 11, the permissionless proof-of-stake network announced that it has entered into a partnership with blockchain intelligence firm Chainalysis. This means that transactions using its native ALGO token can be monitored for anti-money laundering (AML) compliance—and paves the way for enhanced due diligence and for suspicious activity to be investigated.
“By putting proper AML transaction monitoring in place, Algorand is demonstrating its commitment to transparency, safety, and compliance,” said Jason Bonds, Chief Revenue Officer of Chainalysis. “This is the commitment required to build trust and encourage both decentralized financial businesses and traditional finance and to embrace cryptocurrency in Singapore and across the world.”
Algorand Foundation COO Fangfang Chen expressed hope that the integration will allow the platform to fully adhere to regulations in Singapore, where it is based.
“Algorand is committed to providing an inclusive, transparent, and secure system for its global users,” he said.