kaal:claim:5554218-024

The deterministic execution of smart contracts rigidly enforces coded terms and thereby incentivizes participants to exploit loopholes for immediate gain, because no mechanism exists to adapt the rules contextually.

Source quote, verbatim

Conversely, smart contracts' deterministic execution rigidly enforces coded terms, incentivizing participants to exploit loopholes for immediate gain, as there is no mechanism to adapt rules contextually.

From

Furrer Andreas, Wulf A. Kaal, Universal Digital Law Codex (UDLC) Building the Legal Infrastructure for the Digital Era (2025), 5.3 Flexibility: Deterministic Execution vs. Legal Adaptability, p. 32
https://ssrn.com/abstract=5554218 · source PDF

Cite as

Furrer Andreas, Wulf A. Kaal, Universal Digital Law Codex (UDLC) Building the Legal Infrastructure for the Digital Era (2025). SSRN: https://ssrn.com/abstract=5554218

Holds when

smart contracts without on chain amendment or human review mechanisms

Classification

failuresupport: arguedfailure: Loophole exploitation under rigid coded termsfamily: smart-contract-rigidityregulatory-failuresmart-contractsgovernance-design

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