What a dynamic blockchain OS means for the Web3 ecosystem

by Arthur · October 18, 2022

In Southeast Asia, at least 9 out of 10 respondents in a recent survey of 3,000 people claim they currently use or are open to trying digital currencies. In particular, the region offers a hotbed for consumer-facing FinTech products leveraging peer-to-peer payments and smart contracts. As fast as development comes, so is the global use of Web3 technologies – and their pitfalls.

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Growing opportunities in the Web3 ecosystem

Building on blockchain technologies is increasingly gaining traction in the software development industry, with platforms such as Ethereum reporting as high as 4,000 monthly active developers. The reasons vary across the board. For example, smart contracts allow developers to build decentralized apps that rethink data ownership and digital identity models. This creates monetization models that connect data creators directly to their consumers. This can reduce intermediary costs and ultimately generate more revenue for app builders and data owners.

Beyond data, developers have also built a suite of “money lego” applications that adopt the elements of traditional financial products. This led to the boom of decentralized finance (DeFi) including peer-to-peer payments, decentralized exchanges, stablecoins, flash loans and leveraged yield protocols.

Why smart contracts are only useful in specific scenarios

Any technological improvement that streamlines business processes, whether simple or AI-driven, usually also has limitations, smart contracts notwithstanding. Take software development as an example. Typically, smart contracts that are launched cannot be easily modified or closed due to their immutable nature. Simply put, this could stall important cybersecurity fixes, given that it is very difficult to modify live smart contract code and, worse, prevent software disasters.

“Smart contracts are still inherently risky. We’ve come a long way, but still we have glitches and bugs that lead to millions of dollars being lost today. We still need more time for smart contract development to become more robust and battle-tested. Mainstream and institutional adoption will only follow when we have fewer smart contract exploits, says Jeremy Nichols, Blockchain Marketer at Stakefish.

Smart contracts have already been shown to be harmful when exploited. Earlier this year, an NFT project known as Akutars was banned from its $33 million auction fund by both a bug and a cyber exploit. The funds were locked in a smart contract that could not even be accessed and changed by the development team.

In terms of enterprise scenarios, smart contracts cannot fully replace traditional “off-chain” contracts because they are realistically limited in terms of what can be accommodated. For example, stakeholders cannot include vague terms to simplify the interpretation of technical clauses, which may lead some parties to act in bad faith without knowing it. Smart contracts are more useful for enforcing actions that have clear outcomes, such as payments and asset exchanges.

Serving dynamic industry needs with a blockchain OS

Bypassing smart contracts is an alternative solution to Web3 development. However, without smart contracts, most blockchains will not have the sufficient code layer required to build such apps. That’s why Web3 protocols like PraSaga use a blockchain operating system (OS) instead of smart contracts.

Blockchain OS uses a variant of Python, known as SagaOS, to extend the functionality of smart contracts. In addition, it includes the gold standards found in Web2 software development: full flexibility and dynamic coding logic. This can be very useful in meeting the complex needs of enterprise-grade software, including the supply chain and manufacturing industries.

“Automakers can use unique digital IDs to track every single part of their finished cars, from origin to final delivery. For automakers, this creates complete visibility into the entire manufacturing process, providing an unprecedented level of data transparency and traceability,” says Michael Holdmann, CEO director and founder of PraSaga.

Blocks on SagaChain are secured using the Proof of Work (PoW) consensus mechanism developed by Bitcoin, in tandem with the highly energy efficient Proof of Stake (PoS) model. Ethereum, the largest smart contract platform, recently reduced its total energy consumption by 99.95 percent after switching to the PoS consensus model.

Web3 still has a lot to explore

“A blockchain OS means that Python programmers can now quickly correct errors as they would in Web2 development while reaping the benefits of the underlying blockchain technology. We envision that these factors will encourage more coders to take advantage of the latest Web3 technologies while maintaining industry standards for battle-tested software development, says Holdmann.

The notion that Web3 is relatively new also makes it a hotbed for ambitious startups and developers. As with any new industry, time will tell how the next evolution of digital apps will take off.

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