Smart contracts: 5 real-world use cases to guide you.

Kotani Pay
6 min readJan 9


In the world of blockchain, smart contracts are the automatic arbitrators making peer-to-peer transactions possible. Every command, request, and execution is a result of the IF/THEN program that stores all its information on the blockchain network. Through smart contracts, more decentralized applications are built. So popular are they that the global smart contract market is expected to reach approximately $8.3 billion by the end of 2030.

But first, what is a smart contract?

In the most basic explanation, smart contracts are programs on the blockchain that run when predetermined conditions are met. Think of it like basic rules set as a program that executes certain actions once the rules have been adhered to. For example, when ordering online, if you deposit money into an account, the goods you purchased are automatically shipped to your house. In that scenario, the only difference would be the transaction runs on blockchain where everything is transparent, recorded, and immutable, while the commands are written in a variety of coding languages.

Interesting? Well, we have Nick Szabo to thank for that. Computer scientists, legal scholars, and cryptographers came up with the idea of smart contracts in 1996 but had to wait until 2009 to conceptualize it. Although Ethereum is the most popular smart contract platform, other cryptocurrency blockchains such as Polkadot, EOS, Tron, and Algorand can support smart contracts.

These self-executing blockchain programs exist in 3 forms.

  1. Smart legal contracts

Just like traditional legal contracts that bind concerned parties, smart legal contracts hold the parties accountable for fulfilling their end of the agreement. If a party fails to meet their contractual obligations, the smart contract automatically triggers a breach of contract against the party leading to legal action.

2. Decentralized Autonomous Organizations (DAO)

DAOs which are defined as communities existing on the blockchain are subjected to a set of rules coded through smart contracts. The smart contracts ensure that every member of the DAO is adhering to the rules of the community.

3. Application Logic Contracts (ALC)

These types of smart contracts contain applications-specific codes that help in communicating and validating communication between devices allowing them to function securely and autonomously.

Still, wondering how relevant a smart contract is for your business? Here are a couple of benefits of smart contracts to businesses that will guide your decision-making.

  1. Trust and Transparency- The Information is visible to both parties. Users can directly verify information that can affect them and any edit done to them is visible to all parties involved.
  2. You save cost — Smart contracts remove intermediaries reducing the cost that comes with them.
  3. You save on time- By virtue of obligation, smart contracts automatically execute actions as soon as both parties fulfill their end of the agreement. This saves both parties time in verifying and processing information.
  4. Accuracy and efficiency- All actions taken are automatically done by the smart contract eliminating any possible error that comes with manual recording.
  5. Security of all your transactions- Once the agreement has been put in the smart contract, it cannot be changed or tampered with, or hacked. All information is stored in the blockchain that is encrypted and impenetrable.


Smart contracts are the building blocks of decentralized applications (dAPPs) and they play a vital role in blockchain development in various industries. The immutable record-keeping system and transaction platform use cases vary from sector to sector. Wondering how you can leverage smart contracts for your business? Here are 5 use cases of smart contracts in different industries to inspire you.

  1. Finance

Smart contracts facilitate peer-to-peer transactions by removing middlemen. Small and Medium enterprises (SMEs) such as Pezesha, Kwanza Tukule, and Cinch Markets are leveraging on this to acquire credit using Decentralized Finance (DeFi) lending pools and cash out using Kotani Pay. By depositing collateral of a higher value than the loan, they access the global liquidity pool in form of digital assets and convert it into local currencies by integrating Kotani Pay’s white-labeled API.

When it comes to trade finance, smart contracts are creating an ecosystem of trust for global trade by removing the third parties and encouraging a transparent peer-to-peer transaction based on the set agreement. Transactions are much faster and easier as the process is automated by the smart contract.

2. Non-Fungible Tokens (NFTs)

NFTs are created through a minting process which is basically converting images, digital files, videos, and sound bites into crypto assets. This whole process is done through smart contracts where ownership can be assigned and reassigned when transferred. Smart contracts act as the tool for implementing the sale of digital assets. It also ensures that the NFT cannot be divided and is one of a kind.

3. Insurance

The insurance sector faces multiple disputes to be settled and fraud claims. Smart contracts come in as an arbitrator that determines and automate the claiming process and checks for error. The smart contract checks the payout amount and executes the insurance payout on time based on the agreed policy by the individual and organization.

This can be seen in the parametric insurance policy by the Lemonade crypto climate coalition. In this use case, farmers get to insure their crops from crop failure by depositing their funds using Kotani Pay which is converted into digital funds and stored in the Avalanche smart contract. This process is transparent and automated for easy payout when necessary.

4. Supply chain

Businesses are using smart contracts to automate their inventory tracking of goods by automatically triggering the next step when the conditions are met. A smart contract can help your supply chain business specifically detect errors, disruption, and delays in the supply chain and eliminate fraud. Businesses can link payment of goods in the form of digital assets to ensure the immutability of all transaction information.

In the agriculture sector, your business can avoid wastage and loss of perishables using a smart contract that tracks the movement of food from the produce to the final destination. Walmart has successfully used the IBM smart contract to track and trace their perishable goods from the product to the shelves.

5. Real estate

One of the biggest challenges facing mortgages is hidden fees such as closing fees, broker fees, or title transfers all incurred during the purchasing process. Smart contracts eliminate this and make the acquisition of property affordable, fast and efficient. The contracts can record property ownership, and automate the mortgage processing and approval. Once a buyer makes the necessary payment and meets the agreement, property ownership is transferred from the buyer to the seller.

This extends to real estate investing where instead of full ownership of a property by one person, real estate businesses can segment property ownership through tokenization. Just like the DAO concept, when someone buys a token of the property, they own a percentage of the property. This micro-investment use case lowers the entry barrier for potential investors in real estate.

In conclusion

Other sectors benefiting from smart contracts include crowdfunding, energy, digital identity, the health sector, and many more. There is no limit to exploring the potential of smart contracts for your business. Still, stuck on how applicable this is to your business? You can start by aligning your business challenges to the benefits that come with smart contracts. Once you see a rapport, consult blockchain experts who will advise you on how you can leverage smart contracts to your favor.

Integrate with us

We understand the need to automate your business transactions for transparency and ease and to protect you from errors and fraud. Built on blockchain technology, our white-labeled API is here to ensure a smooth and seamless transaction process for your business. You can easily switch from the world of digital currencies to fiat instantly for your business and for your customers. Don’t sweat it, we got your KYC/AML covered.

At Kotani Pay, we are committed to ensuring financial inclusion for all by linking your clients to accessible DeFi services. Let’s talk more.



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