July'22

Unlock True Potential of Smart Contract

A typical modus operandi is when one entity wishes to purchase products or services offered by another entity (vendor organization), and a contract is created and signed by both entities. There are various terms & conditions such as payment terms, service or goods delivery terms, support terms, discount, waiver, or penalty clauses are there in this contract.

A few terms are fixed, such as total quantity or price per unit, and a few are variable components such as the quality, overhead charges, and dwell time. In many organizations, these contracts are paper-based, and the information is not digitized. If any dispute is raised, it takes time, money, and effort to resolve the discrepancies. Such events leave an impact on the working relationship of both entities.

Smart contracts executed on the blockchain network effectively mitigate such risks and challenges. They can be leveraged to compute fixed and variable components of the terms & conditions and harmonize the relationship between entities. Let us understand the significance of automated smart contracts in the freight transportation industry.

Entity A is the buyer organization that has placed an order to Entity B, the supplier organization. When the goods are delivered, an invoice is raised, which would have several charges such as tax, accessorial charges, fuel charges, and total amount. To calculate each of these charges, separate smart contracts can be executed, and one smart contract can be executed to raise the final invoice.

• Goods & Service Tax (GST): This would be dynamic based on purchased goods.
• Fuel charges: This would be dynamic depending on the distance travelled, type of vehicle, and mileage.
• Accessorial charges: This would be dynamic based on several factors such as dwell time taken during the delivery, equipment used for loading, unloading, special handling charges, etc.
• Discounts: This would be dynamically calculated if the delivery date is as per the terms & conditions.

DL Asset Track™ is a permissioned blockchain platform with features called Dynamic Attribute and Expressions which capture the conditions applicable in a smart contract. These contracts are executed automatically when a business transaction occurs in the blockchain network.

In the above example, various expressions are used to calculate the charges based on configured conditions. The tax amount is determined with a Lookup expression in which the tax percentage is retrieved from a pre-defined table, and the tax amount is calculated with a dynamic attribute.

Finally, a dynamic attribute can be configured to calculate the total payable amount, all these computations of fixed and variable components happen dynamically, and an invoice can be created automatically.

Salient Aspects

• Configure an expression and select its type from a wide range of operators such as mathematical operators (add, subtract, multiply, divide), range operators (min, max), and conditional operators (if, else, lookup).
• Select a constant value or associate another attribute while configuring an expression.
• Configure a dynamic attribute and apply smart contract rules by associating other attributes.
• Configure a dynamic attribute and apply the smart contract rule by associating other expressions.
• Configure a dynamic attribute and apply smart contract rules by associating attributes and expressions.

Steps

Configure smart contract rules using an expression

1. Create a new asset category or modify the existing asset category.
2. Create a new expression.
3. Enter the name of the expression and select its type.
4. Configure the rule by using a constant value, another attribute, or another expression.
5. Save the expression.

Please find more information here.

Configure smart contract rules using a dynamic attribute

1. Create a new asset category or modify the existing asset category.
2. Create an attribute.
3. Enter the name of the expression and select its type as a dynamic attribute.
4. Configure the rule by using another attribute, another expression, or both.
5. Configure any calculation rule at attribute level or expression or by combining attribute & expression.
6. Save the attribute.

Please find more information here.