Smart Contract Guide

Introduction

This guide explains how smart contracts work in blockchain environments, with practical examples and best practices for deploying secure agreements.

Disclaimer: This is not legal advice. Always consult with qualified professionals before implementing smart contracts.

Contract Types

1. Exchange Agreements

Coding automatic payments between parties using time or event triggers

2. Escrow Contracts

Third-party holding of funds until contractual obligations are met

3. Multi-Signature

Requiring multiple approvals for contract execution

4. DAO Governance

Decentralized autonomous organizations with voting rules encoded

Critical Elements

1. Self-Execution Clauses

Automated triggers based on external data feeds (oracles)

2. Gas Fees

Blockchain transaction costs that determine execution priority

3. Immutability Features

Post-deployment code changes typically require entirely new contracts

Simple Solidity Example

pragma solidity ^0.8.0;

contract SimpleExchange {
    address payable public partyA;
    address payable public partyB;
    uint public deadline;

    constructor() {
        partyA = payable(msg.sender);
        partyB = payable(address(0));
        deadline = block.timestamp + 7 days;
    }

    function deposit(address payable _partyB) external payable {
        require(msg.value == 1 ether, "Must send exactly 1 ETH");
        partyB = _partyB;
    }

    function withdraw() external {
        require(block.timestamp <= deadline, "Deadline passed");
        if(msg.sender == partyA) {
            if(partyB != address(0)) {
                payable(partyA).transfer(address(this).balance);
            }
        }
    }
}

Basic deposit/withdraw pattern requiring both parties to act by deadline

Security Best Practices

DAO Contract Example

Token-Governed Proposal

68%
Yes
22%
No
10%
Veto

Example voting weights from actual DeFi proposals