- Cuban noted that the use of commercial smart contract technology via blockchain technology is yet to be visible.
- Smart contracts eliminate the need for third parties to initiate any business operations.
While commenting on the current state of the crypto market, billionaire investor Mark Cuban has highlighted the significant role that commercial smart contracts will play going forward. In his own words, Mark Cuban said, “When businesses can use smart contracts to gain a competitive advantage, they will. The chains that realize this will survive.”
What we have not seen is the use of Smart Contracts to improve business productivity and profitability. That will have to be the next driver. When businesses can use Smart Contracts to gain a competitive advantage, they will. The chains that realize this will survive.
Cuban on commercial smart contract
According to Cuban, the adoption of commercial smart contracts will be the force that draws the crypto market and the entire blockchain sector from what he terms the ‘lull’ state. Citing the losses that have hit almost all the top 100 cryptocurrencies in the last one week, the renowned crypto proponent and Dallas Mavericks owner likened the events to the dot-com bubble experienced in the early 2000s.
During the bubble, quite a significant number of companies closed shop’ contrary to the expectations of many people at the time. Fast forward to 2022, and the same seems to have befallen the crypto market. In his tweet, Mark Cuban gives an idea of why the crypto market has painted such a grim picture lately
Crypto is going through the lull that the internet went through. After the initial surge of exciting apps, NFTs, DeFi, P2E, we saw the imitation phase as chains subsidized the movement of those apps to their chains (ala bandwidth and storage subsidies by startups in the 2000s)
Among the factors that could elicit bearish sentiments, leading to the decline is the Federal Reserve’s recent policy updates. However, Cuban through his Twitter account intimated that the decline is because of a lack of genuine innovation, leading to what he describes as the ‘imitation’ phase in the crypto market. In Cuba’s view, the blockchain projects that purely “copy what everyone else has” by bridging over nonfungible tokens (NFTs) to decentralized finance (DeFi) protocols will be outlived by others. Why will this happen? The explanation is that they do not have to be on every chain. Instead, Cuban believes that smart contract platforms designed for commercial usage and replacing software-as-a-service (SaaS) apps will thrive long term.
The chains that copy what everyone else has, will fail. We don’t need NFTs or DeFi on every chain. We don’t need bridges to move NFTs between chains (does this make it fungible?). We need Smart Contract apps replacing SAAS apps.
To put Mark Cuban’s sentiments into perspective, figures from CoinShares’ crypto funds report 2021 and other performance indicators show that most people prefer platforms with smart contracts. For instance, Ethereum (ETH), Solana (SOL), Polkadot (DOT), and Cardano (ADA) were the options of choice for the heavy hitters last year.
According to the report, funds offering exposure to ETH were the resounding favorite, garnering a whopping $1.38 billion, followed by Solana funds at $219 million, while Polkadot and Cardano products generated $116 million funds and $115 million respectively.