CONTRACTS & TOKENS
Nexus reduces the requirement for intermediaries with Contracts and Tokens that are governed solely by mathematics and objective code. They are able to automate many tasks providing a wide range of Decentralized Solutions.
Contracts are facilitated through the seven layers of the Nexus Software Stack, each designated to carry out specialized processes without the over complexity and complications of a Turing complete system. The majority of contract functionality is provided by the interaction of the Operation and Register layers. Operations are instructions that act on registers, and define more complex contract logic, while Registers record the state of applications, and metadata describing assets or tokens, which can be transferred between people.
Conditional Contracts allow a user to set requirements in order for a contract to be fulfilled, such as contract time expiration, the decentralized exchange of an asset, or the delivery of a package before funds are released to the seller. More advanced forms of non-custodial escrow are also possible with conditional contracts.
A register can be part owned by a Token creating partial ownership of an underlying asset.
What is a Smart Contract?
Bitcoin was introduced with built-in Smart Contract functionality called scripts. Ethereum augmented these capabilities into its ‘Turing Complete Smart Contracts’, through a custom programming language called Solidity, which is then compiled into assembly that is run on the Ethereum Virtual Machine (EVM).
Though very capable, Ethereum has experienced some issues in regards to security, performance, and ease-of-use. Some notable cases include the $75m DAO hack, and the $286m Parity bug. Vulnerabilities existed due to over complexity, and the resulting difficulty of resolving bugs in a protocol written in immutable code.
Tokens up until now have been limited to the raising of capital in the form of Initial Coin Offerings (ICOs). Conversely, Nexus Tokens can either represent a store of value such as a native token, or enforce partial ownership or rights to a revenue stream of an underlying digital or physical asset. Therefore, Nexus Tokens can facilitate the automatic payment of split revenues, such as royalties and dividends.
Automatic Payment of Split Revenue
The diagram below shows the flow of an automatic payment of a split revenue stream once an asset has been created, and the representative tokens (TKNs) have been distributed to the token accounts.
In this example, the split is 50-25-25. First, a user pays a license fee (here it is 1000NXS) for use of an asset. The asset is detected to be owned by the token account holders. The token holders are notified to claim their percentage of the payment (DEBIT), which is represented by their total token balance divided by the total token supply. Each token holder is then able to CREDIT their accounts proving their right to this payment with their TKN balance.