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Friday, July 03 , 2020 10:57
PM / by NASD Plc/ Header Image Credit: NASD
Smart Contracts
Today, we will discuss Smart Contracts, how it works
and the benefits accruable:
A smart contract is a computer protocol intended to
digitally facilitate, verify, or enforce the negotiation or performance of a
contract. Smart contracts allow the performance of credible transactions
without the interference of third parties/middlemen i.e. a Barrister/Solicitor.
Smart contracts guarantee specific set of outcomes. There is never any
confusion and there is never any need for litigation.
A broader explanation is that they simply represent
any agreement between parties that is stored on and executed by a blockchain.
How Smart Contracts Work
In a smart contract approach, an asset or currency is
transferred into a program and the program runs this code and at some point it
automatically validates a condition and it automatically determines whether the
asset should go to one person or back to the other person, or whether it should
be immediately refunded to the person who sent it or some combination thereof.
The smart contract code is responsible for facilitating, verifying, and
enforcing the negotiation or performance of a transaction or an agreement.
Smart contracts range from Simple to Complex. Smart contracts have proved
instrumental in foreign countries i.e:
Benefits Of Smart
Contracts
Smart contracts have the potential to make complex
transactions more efficient while also increasing transparency and
trustworthiness among all parties. Below highlighted is how:
I. Efficiency.
Transactions take place as soon as the terms of the
contract are fulfilled. Currently, it can take months for assets to be moved
after a contract is signed. There is no lengthy verification process. At a
minimum, this means larger and more complex agreements will take less time to
execute, allowing companies to move more quickly.
II. Trustworthiness.
Smart contracts are encrypted and stored on a shared
blockchain that is controlled by the parties themselves. There is no need to
trust a third party to hold assets or ensure the terms of the agreement are
executed. Furthermore, it is practically impossible for information to be lost,
since the ledger is replicated in full across many different machines.
III. Transparency.
When the terms of a contract are expressed in computer
code rather than natural language, there is no room for ambiguity. It is even
possible to test an agreement with any number of variables so that all parties
involved can know exactly what will happen under any given circumstances. This
should help reduce or eliminate disputes that arise under unusual
circumstances.
IV. Privacy.
Smart contracts can have variable permission
structures, meaning that Regulators may be able to see the terms of the
contract while protecting the identities of the parties themselves. This allows
Regulatory authorities to monitor for fraud and suspicious activity without
violating the privacy of individuals.
Conclusion:
NASD is of the opinion that if this concept is welcome
in the Nigerian Climate, it would significantly change how things are done.
Lawyers need to align their role to influence this new development through
workable blockchains and smart contracts. Technology is the future of the new
world order. Professionals are now aligning themselves and their business with
technology. In the coming years, as more technological solutions continue to
arise, the profession will continually be forced to change the way it practices
law.
Year-to-Date Overview
NASD OTC Securities Exchange Market closed on a
positive note YTD as the market recorded an increase in performance. NASD
Security Index Year to date return rose by 2.78%. Total volume traded
Year-to-Date stands at 7,797,421,493 units in 730 deals and total
Value traded is N10,130,150,312.07.
Week 27 Overview
NASD OTC Securities Exchange closed the week with a
positive return in NSI. The NSI return rose by 1.98% to close the week at
716.96 points against 703.01 points in the preceding Friday, June 26 2020.
In addition, Week 27 saw NASD Investors gain N10.24 Billion in value.
NASD OTC Market capitalization closed at N526.65 Billion compared to N516.4 Billion in the preceding Friday, resulting from
a positive movement of prices.
There was a -49.40% decrease in the total value traded
during the week as week 27 saw NASD Investors trade a total of N13,403,014.55 in value
compared to N26,486,591.59 in the
previous week. Total trade activity for the year is valued at N10,130,150,312.07.
In the same pattern, volume traded during the week
was 224,488.00 units compared to 5,816,075.00 units in the previous
week leading to a -96.14% decrease in trade volume compared to week 26. Total
volume traded for the year is 7,797,421,493 units.
Top Traded Securities by
Volume
The week closed with Central Securities Clearing
System Plc Ranking top among four most traded securities by volume and Nipco
Plc as the least traded among the four most traded in week 27.
Top Traded Securities by
Values
The week closed with Central Securities Clearing
System Plc ranking top among top four most traded securities by value and Nipco
Plc as the least traded among the Four most traded securities by value in week
27.
Advancers for the week
Three of NASD OTC stocks closed the week with a
positive movement in price. Central Securities Clearing System Plc, which
currently holds a Market Capitalization of N74.90 Billion closes the week at N14.98 representing a 14.79
percent increase from the previous close of N13.05.
FrieslandCampina Wamco Nigeria Plc, which currently
holds a Market Capitalization of N117.99 Billion closes the week at N120.86 representing a 0.72 percent increase from the
previous close of N120.
Nipco Plc, which currently holds a Market
Capitalization of N12.25
Billion closes the week at N65.31 representing a 0.48 percent increase from the previous close of N65.
Decliners for the Week
One of NASD OTC big stocks close the week with a
negative movement in price. Afriland Properties Plc which currently holds a
Market Capitalization of N27.20 Billion closes the week at N1.98 representing a -0.22 percent decrease from the
previous close of N2.2.
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