A Formal Specification Smart-Contract Language for Legally Binding Decentralized Autonomous Organizations

Abstract

Blockchain-and smart-contract technology enhance the effectiveness and automation of business processes. The rising interest in the development of decentralized autonomous organizations (DAO) shows that blockchain technology has the potential to reform business and society. A DAO is an organization wherein business rules are encoded in smart-contract programs that are executed when specified rules are met. The contractual-and business semantics are sine qua non for drafting a legally-binding smart contract in DAO collaborations. Several smart-contract languages (SCLs) exist, such as SPESC, or Symboleo to specify a legally-binding contract. However, their primary focus is on designing and developing smart contracts with the cooperation of IT-and non-IT users. Therefore, this paper fills a gap in the state of the art by specifying a smart-legal-contract markup language (SLCML) for legal-and business constructs to draft a legally-binding DAO. To achieve the paper objective, we first present a formal SCL ontology to describe the legal-and business semantics of a DAO. Secondly, we translate the SCL ontology into SLCML, for which we present the XML schema definition. We demonstrate and evaluate our SLCML language through the specification of a real life-inspired Sale-of-Goods contract. Finally, the SLCML use-case code is translated into Solidity to demonstrate its feasibility for blockchain platform implementations.

From Legal Contracts to Formal Specifications: A Systematic Literature Review

“…As such, SQs have been refined and new papers have been added to the total number of papers being analyzed, also considering they have been published very recently. The refinement of the SQs and the indications of the three expert authors allowed the identification of the following works to ensure that main approaches to formalize specification languages for contracts were included [7,39,53,72,99], legal ontologies [6,48,54], and reviews [27,77]. Concerning the proceedings of recent conferences, the works in [2,5,40,80,82,87,89,90] have been included.…”

“…Similarly to [52], the proposed approach potentially support a developer in deciding how to implement the formal specification and it is not limited to the how. A recent work [39] presents a process for generating a smart contract. A multi-tier ontology is proposed to support translation to a domain-specific representation using a Smart Legal Contract Markup Language (SLCML).…”

“…Other approaches are tailored to the generation of models of law [99], Internet contracts [49], or rely on conditional structures [52] to extract and model contract elements. In recent work, the full process to generate formal specifications for a smart contract is presented [39]. The translation process is often simplified through the use of normalized or controlled NL to better identify and represent requirements for formal specifications [30,64,89,90].…”

The Machine-to-Everything (M2X) Economy: Business Enactments, Collaborations, and e-Governance

“…For evolving DAO-collaborations, Figure 4a shows a conceptually collaboration configuration where the template for an electronic-community formation is given by a businessnetwork model (BNM) [32] to specify choreographies relevant for a respective business scenario.The BNM defines legally valid [33][34][35] template contracts as service types together with assigned organizational roles. A collaboration hub that houses business processes as a service (BPaaS-HUB) [36] in the form of process views [30], houses the BNM templates for potential collaborating counterparties to enable a speedy matching.…”

“…First, human-centered oral and written contracts are difficult to process even for smart machines [1]. Second, traditional contracts [48] are often under-specified and do not provide sufficient details about the actual transaction processes as well as about the parties obligations and rights [23,34]. Third, they do not allow for extensive automation, scale badly and lack a computerized transaction protocol [49].…”