Efficiently transform contracts written in Peyton Jones contract descriptive language to Solidity

Abstract

Financial contracts play a major role in the modern economy. Due to a large variation of contracts being traded in financial markets, a standard representation for contracts was required in order to eliminate the ambiguity imposed by natural languages. Peyton Jones et al. catered this need by proposing a combinator library embedded in Haskell which enabled contract representation and valuation. However, every financial contract represented as such suffered from the same fundamental problem. If a contract is executable, the parties involved in the contract needed to trust a central counterparty to give them the correct results after execution. The interference of this middleman introduced certain risks as well as a significant amount of overhead. In this dissertation, a novel approach to facilitate autonomous contract execution was proposed, exploiting the features and use cases of the Ethereum blockchain and its scripting language, Solidity. The approach involves transforming contracts written in the Peyton Jones’ Contract Descriptive language to Solidity using a special purpose compiler. The result of this transformation is a smart contract equivalent to the traditional financial contract. The transformed smart contract is deployed and executed on the Ethereum blockchain using an Ethereum client. The proposed solution was evaluated against existing attempts to design autonomous financial contracts. The research shows that a contract written in the Peyton Jones’ Contract Descriptive language can be transformed to a smart contract which executes autonomously in a trustless environment. As a result, it was concluded that financial contracts could operate without a central counterparty with increased performance and reduced overheads.