Smart contracts provide automated means of digitally facilitating, verifying and enforcing the negotiation or performance of a contract. Being self-executing, they minimize human error and enhance security of transactions on blockchains through built-in logic and transparent rules. Smart contracts have the potential to disrupt a wide range of industries including finance, real estate, public services and healthcare by enabling trustless transactions without intermediaries.
The global smart contracts market allows for a more efficient exchange of assets, payment execution and information sharing while reducing the need for third-party supervision or control. Important applications include processing loan agreements, handling property registrations, managing insurance claims and clearing financial exchanges. With added features of reliability, accuracy and transparency over traditional contracts, smart contracts improve operational efficiency for organizations through automation.
The global Smart Contracts Market is estimated to be valued at US$ 249.74 Mn in 2023 and is expected to exhibit a CAGR of 16% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
Growing adoption of blockchain technology across industries has fueled the demand for smart contracts that integrate with blockchains. Prominent industries driving smart contract adoption include banking and finance, insurance, government, real estate, manufacturing and supply chain management. While Ethereum remains the primary platform for deployment of smart contracts currently, new alternative platforms are emerging with added functionalities to enable wider applications. Standards are being framed to govern smart contract development as the technology matures.
Threat of new entrants: Establishing a smart contracts platform and attracting developers requires significant investments in technology and marketing. Existing players enjoy network effects which make entry difficult.
Bargaining power of buyers: Large enterprises and organizations have higher bargaining power as buyers due to their deal size and potential for generating more transactions. Individual users have low bargaining power.
Bargaining power of suppliers: Developers/programmers form an important supplier group for smart contracts platforms. Currently, there is healthy competition for developer talent which limits their bargaining power.
Threat of new substitutes: Blockchain technologies like decentralized finance are still evolving and have potential to reduce the need for centralized smart contracts platforms in the future.
Competitive rivalry: The market currently sees intense competition among major platforms to attract developers and enterprises. Focus on technical capabilities, security, fees and innovative use cases drive rivalry.
The Global Smart Contracts Market Growth is expected to witness high over the forecast period driven by rising adoption of blockchain technologies.
Regional analysis: North America dominated the smart contracts market in 2020 and is expected to grow at a high CAGR during the forecast period. This can be attributed to the presence of major technology companies exploring blockchain applications and favorable regulatory environment for innovation in the region. Adoption is also growing rapidly in countries like China, Singapore and UAE in the Asia Pacific and Middle East & Africa regions respectively driven by government initiatives and startup funding. Europe is another major regional market for smart contracts currently.
Key players operating in the smart contracts market are DeviantArt, Nifty Gateway, SuperRare, Foundation, MakersPlace, KnownOrigin, Async Art, ArtBlocks, OpenSea, Rarible, NTWRK, ArtStation, Artsy, Saatchi Art, Singulart, DigitalArt4Climate, Hic et Nunc, Showtime, Verisart, Artmajeur. Ethereum has emerged as the most popular blockchain platform for smart contracts currently and Ethereum virtual machine is being utilized by majority of the developers. Leading enterprises and brands are also actively exploring use of smart contracts for applications like supply chain management, trade finance, and asset digitization.
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it