Friday, July 03 , 2020 10:57
PM / by NASD Plc/ Header Image Credit: NASD
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:
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.
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.
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.
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.
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.
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.