Your organization would like to pay out a performance bonus to its collaborators and one of the board members has raised the possibility of paying this bonus in Ethereum tokens. You are delighted by this idea and you ask them how this is possible. Smart contracts, he replies!
How can smart contracts be used in this situation? It’s actually very simple.
A smart contract could be used to manage Ethereum in an organization. ETH is sent to the contract address which, in turn, has business rules encoded in it to organize and distribute the company bonus to the right recipients. After deploying the smart contract, all employees are asked to send a special message to the contract registering their company ID and Ethereum address where they’d like to receive the bonus.
When time comes, management will send messages to the contracts containing your performance metrics (which are calculated by human resources based on your achievements). These metrics are converted to a bonus by the smart contract, which performs the payout procedure automatically.
Everyone in the organization will be able to monitor and audit the bonuses – it’s a blockchain after all!
All second generation cryptocurrencies allow this system to be implemented. All that’s required is a smart contracts platform and a token that actually carries some financial value, like Ethereum or Cardano ADA.
We hope this quick example of how smart contracts can be leveraged to deploy business rules inspires your organization to adopt cryptocurrencies and smart contracts for business workflows. Many other business processes can be encoded in smart contracts. There are even ideas for companies that are 100% decentralized, like the concept of a DAO or Decentralized Autonomous Organization, where every business process has been encoded in smart contracts and the business is self administrated.