Ripple Wins US Patent for New Oracle-Based Smart Contract Design

Ripple's patented design would allow derivatives to settle based on external information – such as temperature data.

Oct 2, 2020 at 1:37 p.m. UTC
Updated Sep 14, 2021 at 10:03 a.m. UTC

Blockchain payments technology firm Ripple has won a patent for a design that can execute smart contracts based on data collected from the outside world.

  • Earlier this week, Ripple Labs received a patent (No. 10,789,068) for a smart contract that can use oracles to connect a distributed platform to a variety of different real-world data.
  • Originally filed in June 2018, one example of a use case provided includes using the smart contracts to automatically settle options contracts when pre-agreed conditions are met, such as a company's debt-to-equity ratio hitting a certain threshold.
  • Another example, for the oil industry, is feeding data on the density of a specific crude oil shipment to help a smart contract determine whether to make a trade.
  • Smart contracts are mostly associated with Ethereum, but other large blockchains are looking to add similar capabilities.
  • Earlier this year, derivatives exchange BitMEX, which is now facing legal troubles, awarded a $50,000 grant to a Bitcoin Core contributor to develop a Bitcoin smart contract.
  • One of the two authors of the patent, Ripple’s former CTO Stefan Thomas, previously revived a defunct project called Codius – one working to bring smart contracts to Ripple – into a new startup, Coil.
  • While a patent indicates that time and effort going into a rough draft of, in this case, a new smart contract-based derivative, it doesn't necessarily mean that Ripple has any active plans to move ahead with development.
  • CoinDesk reached out to Ripple for comment but hadn't received a response by press time.
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