Vleppo, Tokel makes NFT smart contracts legally enforceable
By Carine Lee
03:38, 22 July 2022
Web3 firms Vleppo, a blockchain business solutions firm, and Tokel, a token platform, have recently made a breakthrough in making smart contracts legally enforceable around the world.
Vleppo, a Malaysian founded firm, said it has developed a blockchain contract management system (CMS) that enables non-fungible token (NFT) owners to create a digital contract that has the NFT’s on-chain identification (ID) embedded directly in the contract.
OpenSea, touted to be the largest NFT marketplace, uses smart contracts and they accept cryptocurrencies such as ETH, SOL, USDC and DAI in their transactions.
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What is a smart contract?
Smart contracts are used in NFT marketplaces enabling buyers and sellers to conduct transactions with each other, without requiring one party to trust the other.
It is s defined as a computerised transaction protocol which automatically executes the terms of a contract when certain conditions are met.
Smart contracts, stored within a blockchain such as Ethereum, allow for the contract to be executed without the need for intermediaries.
As smart contracts do serve their purpose, there are, however, concerns about the actual legal enforceability of smart contracts in relation to NFTs.
Giving ‘legal clarity’
Vleppo said the solution finally addresses the concern of NFT owners and blockchain industry about the “lack of clarity on the legal enforceability of smart contracts as related to NFTs”.
It added that there should be a clear understanding that there is a legal contract between the buyer and seller.
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Elements of a contract such as offer and acceptance – need to be satisfied in order for a contract to be considered enforceable, which smart contracts cannot do.
This is where natural contract (real human interaction), which according to Vleppo is expensive, steps in to confirm that the elements of contract are met to make it legally enforceable.
“By comparison, a digital contract or smart contract executed in the Vleppo CMS, where the ID of the NFT is embedded into the blockchain record of the contract, ensures that the link between the NFT and underlying contract cannot be broken,” Vleppo said.
Vleppo added that the solution is blockchain-agnostic, as it is compatible with NFTs on any blockchain, including Ethereum, Polygon (MATIC), and Solana.
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