How Do Smart Contracts Handle Disputes?
Smart contracts are deterministic and execute code as written, minimizing subjective disputes. When a dispute over external data or contract conditions arises, they often rely on decentralized oracle networks like Chainlink for verified information.
Alternatively, specialized on-chain dispute resolution systems, such as Kleros, can be integrated. These systems introduce a layer of human review or crowdsourced consensus to resolve ambiguities outside the core contract logic, ensuring a fair, final execution.
Glossar
Crowdsourced Consensus
Consensus ⎊ Crowdsourced consensus is a decentralized method for aggregating external data, particularly for determining the settlement price of a crypto derivative or resolving a binary event outcome.
Smart Contract
Code ⎊ The contract is fundamentally self-executing code deployed on a distributed ledger, embodying the terms of the agreement in an immutable format.
Decentralized Oracle Networks
Architecture ⎊ Decentralized Oracle Networks (DONs) represent a robust infrastructure designed to provide reliable external data to smart contracts without relying on a single, centralized entity.
Smart Contracts
Function ⎊ Smart contracts are self-executing agreements with the terms of the agreement directly written into lines of code, residing on a decentralized ledger.