Forward Protocol’s Smart Contracts For Dummies
Anywhere you mention blockchain technology, Bitcoin immediately comes to mind. However, as much as Bitcoin’s impact was on blockchain technology’s popularity, the innovation transcends a revolution against the traditional financial system. To put it simply, it is a chain of blocks — it stores data in blocks that are linked with chains in chronological order. Blockchain stores different kinds of information, and in the case of bitcoin, it acts as a ledger for transactions. Decentralized blockchains are immutable; hence, any data entered there is irreversible.
Smart contracts are programs stored on a blockchain that are executed when certain predetermined terms are fulfilled. They typically automate the execution of an agreement so that every party involved understands the outcome, and don’t require any intermediaries or third parties, making it more efficient. They also automate a workflow, triggering the next action when conditions are met.
Forward Protocol aims to democratize education by reforming and redefining learning on the blockchain. It rewards participation and motivates excellence with an “earn as you learn” model for both learners and experts or teachers. This is achievable by creating an education framework that institutions and organizations can use to incentivize the knowledge transfer. All of these processes are run efficiently using smart contracts on the Forward Protocol.
Forward Protocol has 5 core smart contracts:
Forward Protocol aims to solve the problem of connecting a billion learners with experts through a self-actualizing structure that allows them to access a world-class education. Forward Protocol runs on five core smart contracts. They are fundamental to the design, functionality, and implementation of the protocol. It leverages some of the best features of blockchain technology to provide a feasible solution, making it easier for anybody to participate in the global education economy.
Forward Protocol can be deployed in any EVM (Ethereum Virtual Machine) compatible blockchain, such as Binance Smart Chain (BSC), Polygon, etc. It offers more opportunities on the Ethereum blockchain, because it is the most decentralized blockchain after Bitcoin, with a healthy population within its ecosystem.
Let us examine each smart contract to see what they bring to the protocol. Each smart contract explanation is also accompanied by illustrations and interactions between fictional participants to aid comprehension.
- Proof of Value-Delivered
- Proof of Value
- Distributed Reward/Revenue Sharing
- “Proof of Ownership”
- Initial Knowledge Offering (IKO)
Proof of Value-Delivered
Proof of Value-Delivered smart contract is designed to control the movement of money among participants within the ecosystem. There are two participants in this smart contract, the contributor and the participant node.
The contributors could be Marketplaces, Freelancers, Hiring Interns, Crowd-Freelancing, Tutors, etc. The participant nodes are students, learners, or professionals.
Let’s examine a sample interaction between participants. A contributor creates a graphic design course. The contributor will do the following:
- Determine the course price
- Determine an incentive for participants nodes
The above criteria can be customized using an escrow contract. Its deployment on a blockchain does not cause extra strain on the in-house support since the smart contract is self-executing as long as conditions are met. When a participant node (student) is interested in taking the course, they will provide payment to the escrow contract. Upon course completion, the payment will be released to the contributor and if an incentive is applicable, it will be given to the participant node.
Susan is an experienced math teacher who created an extensive course for high school students. She published the course on Udemy with a price tag of $650. It is accompanied by a 30% incentive to be released to students who complete the course and pass the test.
Jane is a student who purchased this course and was able to complete it by the end of the semester. Once she completed the course and it was validated that the course covered the curriculum, the $500 payment was released to Susan and the $150 incentive was released to Jane.
Contributors like Susan who provide incentives to participant nodes inevitably have higher course completion rates. Meanwhile, participant nodes get validation points for future projects and jobs.
Proof of Value
The second smart contract is Proof of Value (POV), which is designed to determine the value of the delivered product or service. Value is a subjective yet quantifiable entity. The value of a product or service is what the user is willing to pay for it. The value of the product depends on whether it solves the customer’s problem, whatever that might be. The term value refers to many things. like, writing code, teaching, logo design, leadership role, management role, designing a flyer, or creating music.
The POV smart contract protects both contributors and participants. The absence of intermediaries and third parties makes the process of enumerating content creators more efficient. For example, contributors to content creation websites and hiring markets like YouTube, Fiverr, and Udemy rely on the platforms’ discretion and honesty to collect their reward even after paying a portion of their earnings to them. These processes are also slow because of the layers of verification and documentation required to verify the value transfer process. However, Forward Protocol’s POV smart contract is trustless, fast, and does not require extra fees for escrow services.
The Value is provided by the contributors such as teachers, tutors, freelancers, employees, teams, or crowd freelancing. The participant node receives the value delivered from the contributors. Once the blockchain verifies that value was added, it deploys the POV smart contract, and the contributor receives the payment from the escrow contract. Let us consider two real-life scenarios below.
Example 1: Employment of Contractor
- An employer posts a new job on a marketplace.
- Applicants apply for the job and indicate their terms, pricing, and qualifications.
- Applicants may choose to pay back a percentage of the pricing to the employer upon completion of the project.
- Employer verifies applicants’ qualifications and selects the suitable contractor.
- Employer payment will be in an escrow contract and when the contractor starts the job
- Contractor informs the employer of job completion and delivers any necessary documents/submissions
- Employer verifies that the job is completed. Once confirmed, payment is released to the contractor in FUSD.
- Commission fees will be transferred from the employer’s wallet to Forward’s wallet.
- Forward wallet deducts cost and transfers commissions to the educators involved in the contractor’s training.
Example 2: Free Content Sharing Platforms
There are many free content-sharing websites such as Quora, Reddit, Medium, Hackernoon, Product Hunt, etc. The writers and contributors create content on these platforms for readers to gain value. Readers give likes, upvotes, comments, and shares when they find content that is valuable to them.
If an aspiring writer posts articles on Reddit and one of his posts gets thousands of views, upvotes, and shares, the writer receives incentive in the form of rewards from advertisement views and donations from readers. The reward is released via POV smart contract because many readers found value in the published article.
Distributed Reward/Revenue Sharing
The third smart contract is designed to distribute recurring rewards to contributors like teachers or tutors who provided courses and training to former students. Also, rewards may be provided to participant nodes such as students and learners when completing a course.
Content creators have always had difficulties claiming royalties off their intellectual property past the immediate time. However, value remains valuable as long as it is relevant. That is why we need proper motivation for teachers who provide timeless education materials. Sometimes, it is in the form of their students’ future accomplishments. The Distributed Reward/Revenue Sharing smart contract is a feasible solution to this age-long problem. Hence, as long as the content is useful and delivers value, the creator continues to get rewards for their work, no matter how much time has passed.
A student has completed 10 courses and is looking for a job on Forward’s Protocol Job Board. He then gets hired, completes the job, and provides all his deliverables on time. The employer confirms that the job is completed via the POV smart contract. Once payment is released from the escrow contract, Forward’s wallet sends an incentive to all 10 teachers who provided courses and training to their former student. The commission may be a few cents, but for a teacher with hundreds of students, these commissions accumulate and motivate teachers to continue to provide quality education.
In the above example, the teacher’s commission is the analog of the royalty he/she is entitled to. These rewards are marginal in single units. However, they usually roll over and become substantial rewards for the content creators. These processes would have required days and levels of bureaucracy to get correctly in any other system. Instead, with smart contracts and blockchain technology these processes become self-executing, incorruptible, and irreversible as soon as the conditions are met.
Proof of Ownership
The fourth smart contract is designed to register and protect the intellectual property of several categories of content and documents — course material, exam results, certificates, diplomas, licenses or research papers. All these can be minted on the blockchain as an NFT (non-fungible token) using Ethereum Request for Comment #721. NFTs are digital proofs of ownership of almost any real or virtual property stored on a blockchain ledger. It covers artworks, music, multi-media, collectibles, course materials, certificates, etc.
The advent of the internet was largely hailed as one of mankind’s greatest inventions. However, it also brought new problems with it such as curbing piracy and intellectual property protection. Content creators and their management have not found a solution to this age-old problem, and not for lack of trying. The security of blockchain technology offers a potential solution, though.
Blockchain technology prevents double-spending, and in this case, information duplication, which leads to copyright infringement. Forward Protocol facilitates NFTs creation, management, and trading. For example, English Forward’s NFTs will include revenue-generating digital pages, poetry, haiku, concepts, articles, quotes, and more. This will make it easy for anyone to store information on the blockchain in the form of NFTs.
Proof of Ownership smart contract allows interaction between the NFT owner and other platform users. For example, students interact with courses, submit assignments, take tests via the smart contract, and the final score determines whether the student qualifies for a completion certificate or if they have to retake the test.
Employers can easily verify applicants’ information and qualifications to be valid without calling referees, past employers, and other middlemen since every bit of information is available and on the blockchain (pun intended).
Initial Knowledge Offering (IKO)
The fifth smart contract named Initial Knowledge Offering (IKO), is designed to provide large-scale education contributors a mechanism to raise funds to create new courses.
Many large-scale course creators face challenges when investing in high budget courses. There is the added risk of underwhelming demand for the course which may lead to financial loss. The commercial side of producing courses is not guaranteed and there’s a risk that comes with investing huge resources into any venture. The IKO smart contract solves the problem of market uncertainty and financial risks associated with education content creations.
Let’s assume a group of experts would like to make an extensive course that costs $30,000. There are two problems here, raising funds and market reaction. The expert teams all agree to use Forward Protocol IKO. First, they issue a paper that describes the course’s goals and curriculum. Next, they explain the problem that the course aims to solve. The proposal paper is then issued to the public via the IKO smart contract with a $30,000 cap and a predetermined duration to raise the fund.
The proposal is then advertised to students and professionals who may be interested or work in fields related to the course. People who believe in this course choose to participate in the IKO to help the experts produce the course. Students interested in taking the course may participate in the IKO by paying $500 to secure enrollment for the course. By joining the IKO, they show their interest in the course and promote it to their peers.
All the funds raised for the course remain in an escrow contract. If the IKO fails to reach the cap of $30,000, the money will be returned to all participants. If they reach their $30,000 goal, the experts can start creating the course.
Assuming the IKO reaches a $30,000 cap, experts proceed with creating the course within a predetermined timeline. Students who would like to be first course participants will have their funds secured in an escrow contract. After the course is ready and the students complete it, the money is released to the experts via the POV smart contract.
Forward Protocol uses the fundamentals of blockchain technology to develop a system that resolves the shortcomings of the current education system. It runs on five smart contracts that work to make the ecosystem efficient and self-sustaining. Also, its integration across multiple blockchains makes it easily accessible to a broader audience. Without intermediaries or third parties slowing down processes, the protocol works faster than any existing solution. Finally, it provides an ecosystem that provides jobs and other employment opportunities to everyone involved in the operation and maintenance of the ecosystem.