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Sometimes smart contracts can be pretty stupid.
All the advantages of an anonymous transaction system, protected by encryption, publicly verified, can be deleted by errant code, malicious actors or poorly defined parameters of an executable agreement.
Hoping to repel the wave of bad contracts, bad code and bad actors, Sagewise, a new startup based in Los Angeles, raised $ 1.25 million to bring to market a service that basically pauses the execution of a contract so that it can be arbitrated in case something goes wrong.
Co-founded by a longtime lawyer, Amy Wan, whose experience ranges from the US Department of Commerce to serve as a consultant for a real estate peer-to-peer investment platform in Los Angeles, and Dan Rice, a longtime entrepreneur working with blockchain, Sagewise works with Ethereum and Hedera Hashgraph (a new distributed ledger technology, which claims to solve some of the aroun-speed transaction processing and security problems that have plagued platforms such as Ethereum and Bitcoin.
The company's technology works as middleware, including an SDK and a contract notification and monitoring service. "The SDK is analogous to an arbitrary clause in the form of a code – when the smart contract runs a function, such execution is delayed for a predefined period of time (ie 24 hours) and users receive a text / email notification related to the execution ne, "Wan wrote me in an email. "If the execution is not the intent of the parties, they can block the execution of the smart contract, giving them the luxury of time to fix all that is wrong."
Sagewise approaches the contract termination process as a market where major business is prioritized. "Once frozen, the parties can correct coding bugs, fix security vulnerabilities or change / terminate the smart contract or resolve a dispute independently. If a dispute can not be resolved, the parties graduate in a market for the resolution of disputes by third-party vendors, "writes Wan. "After all, a $ 5 bar bet would have been settled differently from a $ 5 million business dispute, so we are independent of the challenge process."
Wavemaker Genesis led the round, which also included strategic investments from affiliates of Ari Paul (Blocktower Capital), Miko Matsumura (Gumi Cryptos), Youbi Capital, Maja Vujinovic (Cipher Principles), Jordan Clifford (Scalar Capital), Terrence Yang (Yang Ventures) and James Sowers.
"Smart contracts are coded by developers and controlled by security auditors, but the quality of encryption and auditing of smart contracts varies drastically across service providers," said Wan, & # 39; CEO of Sagewise, in a statement. "Inevitably, this discrepancy becomes the basis for disputes over smart contracts, which is where Sagewise intervenes to provide the infrastructure that allows the blockchain and smart contracting industry to gain transaction trust."
In an e-mail, Wan elaborated the thesis for me, writing that "smart contracts may have coding errors, security vulnerabilities or parts may have to modify or terminate their smart contracts due to changing situations . "
Contracts could also be challenged if their execution was initiated accidentally or due to the actions of attackers attempting to hack a platform.
"Sagewise seeks to bring transactional trust into the blockchain industry by building a smart security network where smart contracts do not meet the original transactional intent," Wan wrote.
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