Smart contract design patterns are reliable coding segments used in new contracts because the coding has worked in other programs to do routine functions.
What you will learn
Programmers use smart contract design patterns for the same reasons they use code patterns in other projects. The patterns are reliable coding paradigms (or you can think of them as scripts, formats or segments) that have performed routine functions well in other programs.
Rather than reinvent the wheel for every smart contract, programmers use these patterns to avoid errors and reduce costs.
Smart contract design patterns provide four main functions: security patterns, efficiency patterns, access control patterns and contract management patterns.
The world of blockchain has grown from a niche interest to a universe of possibilities, and the use of smart contract design patterns has been an important part of that growth. According to Verified Market Research, the smart contract market is projected to reach $770 million in value by 2028, up from its $145 million dollar value in 2020.
These contracts add tremendously to the utility, enforceability, and possibility of a web3 world. For example, decentralized applications, or dApps, are applications that run on a blockchain network using the technology of smart contracts to complete transactions. In this article, we will look at the role that smart contract design patterns play in this increasingly important part of the tech world.
Smart contracts are self-executing digital contracts that define the terms of a blockchain transaction using code. This code makes it possible to, among other things, exchange massive amounts of money within set input parameters. Smart contracts are written with a variety of coding languages, and the most popular one is Solidity. Developers created this programming language specifically to run smart contracts on the Ethereum network, but it’s used on other networks, including Hedera.
Programmers use smart contract design patterns for the same reasons they use code patterns in other software engineering projects. These patterns are tried-and-true coding paradigms (or you can think of them as scripts or formats) that have performed routine functions well in other programs. Rather than reinvent the wheel for every program, coders use established code patterns. It avoids errors, reduces costs, saves time and prevents unintended consequences from occurring because of a new coding approach for a routine function.
Not surprisingly, a few design patterns have emerged over the years for smart contracts. The secure, efficient design of smart contracts is imperative given that millions of dollars are tied up in smart contracts and dApp functions. Large security breaches can mean millions of dollars in theft, such as high-profile "rug pull" thefts of contracts that use tokens. According to the 2022 Crypto Crime Report by Chainalysis, cybercriminals netted about $14 billion in cryptocurrency in 2021, setting a dubious record.
To avoid costly errors, it’s a good idea to rely on proven smart contract design patterns. Many online articles on the subject will include a code sample or two for programmers to review.
Smart contract design patterns are reusable, repeatable solutions in writing code. The can serve a wide range of purposes, but can be seen as offering four main functions:
Security patterns – To protect your contract against breaches.
Efficiency patterns – To reduce the cost of executing your contract.
Access control patterns – To manage who can execute the functions of your contract.
Contract management patterns – To organize your contracts and how they interact,
While these categories capture the main functions of all smart contract patterns, it’s important to note that patterns are used across all blockchains, on and off-chain, in domain-based chains, and in data management.
For example, say you want to build a smart contract that will have a few evolutions during its life cycle. You might use something called a state machine pattern, which falls under the multi-domain feature pattern. A state machine pattern allows you to manage smart contract transitions through different “state” transitions over time. This pattern is used in many scenarios, including your basic smart contract implementation, so we highlight it here. Just keep in mind that we’re focusing here on the functions of various smart contract design patterns in the wider blockchain ecosystem.
Security patterns are designed to maximize the level of security of a smart contract against any risk. They are used to ward off reentrancy attacks, overflow attacks, or the flawed behavior of the actual smart contracts.
Given the number of assets tied to smart contracts, it’s no surprise that there are several kinds of commonly-used security patterns. Many of these patterns, like circuit breakers and exit strategies, are designed to protect contracts against failure just in case the worst happens.
These patterns might have a built-in panic button, such as the emergency stop pattern, which gives an option to disable contract functionality if necessary. Or a pattern might use rate limiters to control how often a task can be executed within a specified period. The check effect interaction pattern minimizes potential attack surfaces to reduce the risk of malicious contracts taking over.
Other examples of security design patterns are:
Balance limit pattern
Pull over push payments
Secure ether transfer
Fork check
Termination
Math pattern
Time constraint
Mutex pattern
Auto deprecation design pattern
Withdrawal pattern
Efficiency patterns optimize the operation of a smart contract or reduce the costs associated with using one. Using these patterns can save time and money for operators and users.
For instance, a fewer functions pattern can reduce the overhead associated with your contract to save you storage and gas costs. These kinds of patterns are used commonly in smart contracts on public blockchains as well as in more involved tasks like data refreshing.
Here are a few examples of efficiency patterns:
Use libraries
Incentive execution
Tight variable packing
Limit storage
Challenge response
Write values
Pull payments
Publisher-subscriber
Avoid redundant operations
Short constant strings
Fail early and fail loud
Limit modifiers
Minimize on-chain data
Low contract footprint
Access control patterns restrict who can access and execute certain functions of the smart contract. This way, you can manage permissions and authorizations for a given function, like giving only the admin the ability to do something. The ability to restrict access is particularly useful on a public blockchain ledger, where anyone can see the contract, but you want to control who can do what within the contract.
The names of certain access control patterns make their purpose clear, such as multi-authorization, and ownership and role-based access control. Some, however, sound like the setup for a spy movie, like off-chain secret enabled dynamic authorization.
Other examples of restricting access patterns include:
Hash secret
Access restriction
Judge
Embedded permission
Dynamic binding
Contract management patterns refer to how contract owners organize their smart contracts and how the contracts work together. This allows you to make sure your contracts work together smoothly. For example, you might design a proxy smart contract that relays your function call to other contracts.
Here are other examples of design patterns in the contract management pattern category:
Migration
Data contract
Contract decorator
Inter-family communication
Flyweight
Contract registry
Contract mediator
Satellite
Contract observer
A factory pattern is another example of a contract management pattern. It's used often, so we will discuss it in depth in the next section.
A factory pattern is a type of design pattern where one contract acts as the factory in charge of churning out other contracts. The products the pattern creates using Solidity code are called child contracts.
Solidity smart contracts that use a factory pattern can benefit from increased efficiency as well as security. If you’re looking to create multiple copies of the same contract, a factory pattern can help you streamline management and tracking of your deposit function, for one thing. Deploying only the factory and then later using it to deploy other contracts can also save you in gas consumption. Acting as a defense-in-depth solution, factory patterns can also keep your code simpler, making it more secure with less risk of bugs.
However, there are always exceptions with your unique code to keep in mind. The potential drawback of a factory pattern is that it can be more costly in gas depending on how you set up your code. And while the factory pattern simplifies the management of existing contracts, it can also inadvertently make things more complex if your factory itself is complex. Overall, a factory pattern can be a very useful pattern to streamline your smart contracts in Solidity as long as you keep in mind your goals in using the structure and set up your structures accordingly.
Smart contracts are the key to a future of decentralization powered by the blockchain. You can join in on this world of potential by building dApps, protocols, and smart contracts right on Hedera.
The Hedera Smart Contract Service runs the EVM on the Hedera network, written in Solidity, Viper, and other EVM languages, which helps you run contracts in just seconds. With Hedera, your contract will have predictable gas fees and a carbon-negative energy use so you can reach your goals with hashgraph efficiency.