What Are the Technical Challenges in Translating Complex Financial Clauses into Smart Contract Code?

Translating complex financial clauses into code is challenging due to the ambiguity of legal language versus the precision of code. Clauses involving subjective judgment, such as "material adverse change," are difficult to quantify for a smart contract.

The code must anticipate all possible scenarios and outcomes, as it cannot be easily amended once deployed. Furthermore, ensuring the code is free of bugs and vulnerabilities is critical, as a flaw could lead to significant financial loss.

There is also the challenge of integrating reliable external data through oracles for clauses that depend on real-world events.