Maciej Jędrzejczyk talks about the future of the usage of blockchain in the business.

Maciej Zieliński

19 Feb 2020
Maciej Jędrzejczyk talks about the future of the usage of blockchain in the business.

We interviewed Maciej Jędrzejczyk, CEE Blockchain Leader in IBM about the future of blockchain and why this technology should adapt to business and not the other way round

You often highlight the fact that the blockchain should leave its comfort zone and integrate with the processes which are present in business. Where do you think it would be most suitable?


First and foremost in the places where the trust between the participants of the business process is limited and which creation could lead to significant reduction of costs. Lets take a look at syndicated loans. They require the participation of more than one member who is a creditor in a major undertaking, for example: structural investments. Traditionally, those types of processes between the participants of the consortium occurred relatively rarely and even if they took place they happened through a more traditional “paper form” way. The risk derived from the lack of trust between the participants had to be included in he additional operational costs, effectively lowering the profit of such initiative.
When blockchain aids our endeavours, there exists a way to overcome the distrust between the parties by trusting the automated protocol which essentially exists “below” the process. Within the context of the aforementioned example, the protocol allows us to safely and undeniably exchange the data about the responsibilities of the participants and how much money did they use on credit. In case of any disputes, this allows for quicker and more reliable way of finding and identifying the data needed to identify the party responsible for telling lies or the one having to pay the fine. So, naturally, this solution is much cheaper, considering that you would need to hire an additional arbiter to be the trusted third party if you chose to follow the traditional forms of exchanging the data. This could also let the participants avoid the potential cases in the court in case of ignition of a conflict.


Would you be able to identify a brand where there is the biggest need of solving this limited trust problem?


The problem of lack of trust exists everywhere and no brand requires more help than the other ones. We live in the reality where people don’t trust each other which makes us create third party institutions which we give that trust instead. We lend them our data about our identity and assets because we want to be able to achieve a common goal, create an added value. If want to be capable of generating the trust in a cheaper, simpler way, then blockchain is  a perfect solution.


Do you think that the blockchain solution offered by the IBM is financially viable for smaller and bigger companies?

To answer that we would have to look into the needs of the individual client. IBM offers the IBM Blockchain Platform, based on the Hyperledger Fabric, which is a highly developed blockchain protocol of the permissioned type - the one that allows for the control of access to the business network to all of its participants. IBM Blockchain Platform adds an element of support and upkeep of the enterprise class, full compatibility of the Hyperledger Fabric protocol with the containerisation platform Kubernetes and a convenient interface of automatization of business activities associated with the upkeep of business networks based on blockchain. Its essential for the companies, because the implementation of the system of production always comes with a need of an assumption of the potential risk coming from, for example, the potential downtime of applications used to support the business. If the company or the consortium decides to utilise IBM, it will receive the support needed to maintain the stability and availability of the application. Its also important to notice that the IBM Blockchain Platform can be shared in the as-a-Service model on IBM Cloud or as its full set of software, which can be installed in any IT infrastructure. As a result, it gives a full flexibility in terms of  requirements of the territoriality of data, technological preferences of the members of the business network or the assurance of being able to keep the cryptographic keys in the controlled environment. Is that a cheaper solution? If this is a matter dependent on the choice between a centralised database or a more scattered solution, this matter should be analysed with a reference to its usage. In case of choosing between the different blockchain protocols, TCO must contain not only the expected functionality but also the accessibility of the technical support, the costs of training the personnel and the costs of risk mitigation. The last element is key when we need additional privacy protection.


Will the price of the upkeep of such a solution be reduced or increased over time?

I think that it will decrease over time. It will be so because the cost of such a solution is low in comparison to the benefits it brings and because of the increasing value of the transactions that will be saved on it. Right now we are at the stage where many institutions and commercial entities are still at the stage of experimentation of creating the new business services with the usage of blockchain. As a result the value of the transactions registered in the blockchain is still yet to be measured. However, if we reach the moment where we will record the transactions describing, for example, debentures or other financial instruments worth millions, then the safety that blockchain assures will be relatively cheap in reference to the value generated by the transaction


There exist projects connected with the Hyperledger. Which ones should we pay the most attention towards?

Hyperledger is the organisation which gathers the open source community in the context of using the blockchain technology in business. At the moment there exist dozens of projects carried out by this community which is aided by the commercial entities like IBM. Our company actively assists the growth of the Hyperledger Fabric protocol and large amount of projects carried out by our company uses this technology. In its current stage, Hyperledger Fabric is a mature protocol with three years of history and its ready for its utilisation in the production. What is more, many blockchain projects, carried out independently from the IBM is based on the Hyperledger Fabric.

Would you be so kind to share with us some of the examples of such projects?

As far as IBM is considered, we can boast about the we.trade platform which works in the context of trade finance. It reduces the transaction costs dramatically between the small and medium companies which want to sell the goods in Europe. As of now there is 14 commercial banks who joined the platform and provide this service to their clients. As a result, small and medium companies could acquire the accreditive cheaper than ever and acquire the security before the product is sent to the contractor who is yet to be known.

Other example could be the IBM Food Trust platform which is used for the food tracking. With the use of the GS1 standard and the blockchain it allows the full access to every part of food production and all of the sides engaged in the products’ lifetime, beginning with the producers, through the transporters and ending on the consumers.

Do you think that besides the IBM there exists the projects that are worth paying attention towards?


Undoubtedly, the worlds bigger than the IBM after all. One could mention the efforts of companies such as R3 or Consensys, which carry out very interesting projects in the areas of the financial sector. It is worth mentioning that despite the huge element of competitivity in this sector, both of those companies are a part of the Hyperledger community and conjointly carry out many operations. It is worth mentioning that in Poland, Alior Bank has implemented the “durable medium” which it based on the blockchain platform of the public Ethereum. PKO Bank Polski also incubates many ideas which could be implemented with the usage of blockchain as a part of cooperation with the Lets Fintech start-ups. Many of the practical ideas with the usage of blockchain are contemplated as part of the blockchain working group in the Ministry of Digitalisation or the Polish Informatics and Telecommunication Association. Year 2020 will bring us many more example of the usage of blockchain in the public use. The preview of such a trend was presented in the news published during the ImpactCEE 2019 conference, where the members of Polish KIR and UKNF informed about the creation of the open source technological blockchain sandbox which is going to allow the companies and the start-ups to create the business solutions and the acceleration of the ideas based on this technology.

How would you rate the Hyperledger environment and its organisation?

I think that as an organisation it is doing very well. It’s an extremely dynamic open source based  community, which engages in blockchain. In my opinion its trying to be the most neutral one of its kind. But most importantly its keen on the business. Every project undertaken by Hyperledger is based on the Apache 2.0 licence, which allows for almost limitless usage of the code for the commercial usage. It is very important for the companies which do not only base their value on services or products, but also on creating new components, modules to existing solutions, which remain their intellectual property. 

Overall, Hyperledger operates like every open source organisation, which seeks solutions for specified business cases, but not the other way round – expects that the business is going to adapt to it. Most of its members are companies which both develop their projects and are their main consumers. Each and every one of the projects prepared by Hyperledger must undertake a rigorous process of acceptance, which verifies that the implementing team is going to complete the project and assures that after its completion is going to find the support and look for the sponsors.


About the community, how does IBM support the start-ups?

We have many different programmes of cooperation. Most importantly the ones concerning our usage of our cloud storage. It usually allows the start-ups to gain some credits, which allow them the consumption of the calculating resources on the IBM Cloud. We also carry out different, non-standard methods of cooperation. Depending on the project, its business character, the cooperation can take many forms. Its usually the partnership where the given start-up brings a component of a more complex solution, which is highly significant from the perspective of the business. Then, IBM can see the sense in creating an added value. I guess we can say that we cooperate with the startups and help them develop using our own resources, knowledge and our contact network from many different domains.

At which stage of developing the blockchain technology is Poland?

First of all, we must differentiate two things – most importantly what are the basic examples of the usage of blockchain. First are, of course, the cryptocurrencies and investment products, and on the second one blockchain as a communication protocol in a untrustworthy environment made from many parties. On one hand our market already knows how the administration can handle the requests about the approval of existence of products, but on the other, the usage of blockchain in solving the business problems is yet to be unseen from the judicial perspective. Its kind of a good sign for me, as I believe that the less regulations exist, the easier it is to implement the technologies on your own.

In one of your articles you deducted that 2019 shall be the year of the settlement of the bills, retreat of the investors. In your mind the institutional investors were supposed to slowly shy away from the modern technologies. You said they would choose more traditional ways of investments rather than implementing the unconventional projects with blockchain and start-ups. They would follow a more stable, familiar way. The end of 2019 draws near, has your prediction come true? If yes, then what are the consequences it brings into the markets?

Yes, it did come true. As a result, now we are more aware of the problems we may be facing. The hype is simply gone. In my opinion we can wholeheartedly agree that nobody will invest his money only when hearing the word #blockchain written on the prospect or the documentation. The overreliance on the hype has lead many companies to failure in the test of time.  If they won’t try to develop more constructive value and products/services they will simply cease to exist.

What was the reason for the overwhelming hype concerning the blockchain?

Blockchain is a young technology, it has a little over 10 years and the market might still not be mature enough to embrace it. We are facing the same period that the internet was at its infancy. A great technology just awaits to be introduced at the right moment. Long years will pass until we reach the moment when the blockchain will be welcomed by the mainstream. However, one day it will be our bread and butter in the technological foundation of the modern processes. I wish for such a future to You and all of our readers.

Tagi

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Nextrope Launches “AI-Powered Smart Contract Auditing” Project

Miłosz Mach

03 Mar 2025
Nextrope Launches “AI-Powered Smart Contract Auditing” Project

Next Enterprises Sp. z o.o. is implementing a project co-financed by the European Funds, titled "Smart Contract Auditing with Artificial Intelligence". The goal of the project is to develop and deploy an advanced AI model that enables efficient analysis, vulnerability detection, and security auditing of smart contracts, taking into account their complexity and uniqueness.

Planned Project Tasks:

  • Development of an AI model trained on Solidity keywords;
  • Creation of an effective model in simulated conditions;
  • Analysis of the unpredictability of compiled code execution within the Ethereum Virtual Machine (EVM) in the context of the developed model in a controlled environment;
  • Validation of the model in real-world conditions.

Target Groups:

  • Specialized audit firms focused on smart contract security;
  • Companies developing and/or deploying smart contracts on various platforms;
  • Exchanges, wallet providers, and decentralized applications (dApps) in the blockchain sector;
  • Government agencies or industry compliance bodies responsible for blockchain technology regulation;
  • Smart contract security specialists and developers.

The implementation of the developed tool will enable automated and efficient auditing of smart contracts. The model will provide detailed insights and recommendations for optimizing transaction costs and improving contract performance. As a result, users will be able to make informed decisions, enhancing security and operational efficiency within the blockchain ecosystem. Key benefits stem from the model’s training on smart contract code, audit data, and detected vulnerabilities. Additionally, the incorporation of chaos theory principles will allow for more precise risk and anomaly forecasting.

By deploying this advanced AI model, the project will enhance the security, efficiency, and accessibility of blockchain technology for end users. This will translate into tangible social and economic benefits, including:

  1. Economic Security
  2. Business and Financial Security
  3. Increased Public Trust
  4. Optimization of Transaction Costs
  5. Support for Innovation and Entrepreneurship
  6. Education and Public Awareness

Project Value: 4,173,953.24 PLN
European Funds Contribution: 3,090,156.39 PLN

#EUFunds #EuropeanFunds

Challenges in Smart Contract Auditing

Smart contracts have become a fundamental component of blockchain technology, eliminating intermediaries, and automating processes. However, their growing significance also introduces new challenges, particularly in ensuring security and compliance with industry standards.

Traditional smart contract audits rely heavily on manual code reviews, which are expensive, time-consuming, and prone to human error. As cyber threats continue to evolve, the use of advanced technologies to support the auditing process is imperative.

The Role of AI in Data Analysis

Artificial intelligence (AI) introduces a new paradigm in smart contract security assessment by leveraging its capability to process vast amounts of data and identify patterns that may go unnoticed with traditional auditing methods. AI enables:

  • Automated code analysis and real-time detection of potential vulnerabilities,
  • Optimization of auditing processes by reducing human errors and improving threat identification efficiency,
  • Better adaptation to evolving regulatory requirements and emerging threats within the blockchain ecosystem,
  • Rapid analysis of large datasets, allowing for quick insights and the detection of non-obvious dependencies in smart contract code.

By utilizing AI, the auditing process becomes more comprehensive, precise, and scalable, enabling continuous risk monitoring and adaptation to new attack vectors.

A New Era of Smart Contract Security with AI

With the support of European Funds under the European Funds for a Modern Economy (FENG) program, we are conducting research on next-generation blockchain auditing methods, reinforcing Nextrope’s position as a leader in innovative technology solutions.

The "Smart Contract Auditing with Artificial Intelligence (AI)" project contributes to key aspects of blockchain security by:

  • Automating smart contract audits, accelerating verification processes, and improving their accuracy,
  • Optimizing costs, making professional audits more accessible to a broader range of entities,
  • Raising security standards and enhancing regulatory compliance,
  • Increasing trust in smart contracts, fostering broader technology adoption.

Interested in learning more about our project or discovering how to utilize AI in your company? 📩 Contact us at contact@nextrope.com for further details!

Tagi

How NOT to Create a DAO: Common Pitfalls You Should Avoid

Kajetan Olas

27 Dec 2024
How NOT to Create a DAO: Common Pitfalls You Should Avoid

Decentralized Autonomous Organizations (DAOs) represent a fundamental shift in how communities, companies, and initiatives can coordinate efforts, funds, and decisions on the blockchain. By leveraging transparent smart contracts and on-chain governance mechanisms, DAOs aim to distribute authority, reduce overhead, and foster a more democratic decision-making process. However, building a successful DAO isn’t just about cutting-edge tech or grand ideas—it also requires a clear vision, well-crafted governance rules, and a strategically engaged community.

In this article, we’ll take a counterintuitive approach by highlighting how not to create a DAO. By focusing on common pitfalls—from legal oversights to governance missteps—we can better understand what truly contributes to a thriving, sustainable DAO. This perspective aligns with the importance of recognizing cognitive biases, such as insensitivity to base rates and the conjunction fallacy, which often lead enthusiastic founders to overlook real-world data and complexity. Avoiding these traps can be the difference between launching a resilient DAO and watching an ambitious project crumble under misaligned structures or unmet expectations.

2. Missing the Governance Threshold Mark

Governance Thresholds Gone Wrong

Governance thresholds dictate how many votes or what percentage of voting power is needed to pass a proposal within a DAO. Striking the right balance here is crucial. Thresholds that are set too high can stifle progress by making it nearly impossible for proposals to succeed, effectively discouraging member participation. On the other hand, thresholds that are too low can lead to frivolous proposals or constant voting spam, making governance more of a burden than a benefit.

When designing your DAO’s thresholds, consider:

  • Community size and engagement levels: Larger communities might handle higher thresholds more comfortably, while smaller groups may benefit from lower requirements to encourage active participation.
  • Type of proposals: Operational decisions may need a lower threshold, whereas critical changes (such as tokenomics or treasury management) often require more consensus.
  • Voter fatigue: The more frequently members are asked to vote—and if it’s too easy to put forward proposals—the greater the risk of apathy or disengagement.

Over-Complex vs. Over-Simplified Governance

It’s tempting to either pile on complicated governance rules or oversimplify them to keep decision-making quick. However, both extremes can be problematic. Simplicity in governance is key to enhancing clarity and participation. Overly complex smart contracts and procedural layers can dissuade newcomers from getting involved, while an oversimplified model might fail to address potential conflicts or security vulnerabilities.

Some issues to watch out for:

  • Complex Smart Contracts: More code means more potential bugs and greater difficulty in auditing or updating governance logic.
  • Opaque Voting Processes: If members can’t easily understand how votes are tallied or how proposals are introduced, engagement drops.
  • Excessive Centralization in “Simple” Models: In trying to streamline governance, some DAOs inadvertently concentrate power in the hands of a few decision-makers.

Ultimately, aiming for a balanced governance framework—one that is easy enough for members to participate in but comprehensive enough to protect the DAO from abuse—is central to avoiding the pitfalls of governance threshold mismanagement.

3. Underestimating Legal and Regulatory Aspects

Legal Wrappers and Compliance

Building a DAO without considering legal and regulatory frameworks is a common recipe for disaster. While decentralization is a powerful concept, it doesn’t absolve projects from potential liabilities and compliance obligations. Assigning your DAO a formal legal wrapper—whether it’s a foundation, a cooperative, an LLC, or another entity type—can help mitigate personal risks for contributors and align your organization with existing regulatory regimes.

Failing to think through these details often leads to:

  • Personal Liability for Founders: Without a proper legal entity, core contributors might become personally responsible for any legal disputes or financial mishaps involving the DAO.
  • Regulatory Crackdowns: Governing bodies worldwide are actively monitoring DAOs for compliance with securities laws, anti-money laundering (AML) regulations, and tax obligations. Ignoring these can lead to penalties, fines, or forced shutdowns.

Non-Existent or Inadequate Documentation

Equally problematic is the lack of clear documentation outlining the DAO’s legal structure and operational protocols. From voting procedures to treasury management, every aspect of the DAO’s lifecycle should be properly documented to reduce ambiguity and help new members understand their responsibilities. Inadequate documentation or outright neglect can create:

  • Confusion Over Roles and Responsibilities: Without explicit definitions, it’s easy for tasks to fall through the cracks or for disagreements to escalate.
  • Inability to Enforce Rules: DAOs rely on both smart contracts and social consensus. Formalizing rules in documentation helps ensure consistent enforcement and prevents unwelcome surprises.

In short, underestimating the legal dimension of DAO creation can derail even the most innovative projects. By proactively addressing legal and regulatory considerations—and maintaining thorough documentation—you not only protect core contributors but also fortify trust within your community and with external stakeholders.

Overlooking Community Building

The Importance of Community Engagement

A DAO, at its core, is nothing without an active and supportive community. Driving grassroots enthusiasm and participation is often the deciding factor between a thriving DAO and one that fizzles out. Yet, it’s surprisingly easy to underestimate just how vital it is to nurture community trust and engagement—especially during the early stages.

Some common pitfalls include:

  • Treating Community Members as Passive Observers
    Instead of viewing your community as a dynamic force, you might slip into a one-way communication style. This discourages members from taking initiative or contributing fresh ideas.
  • Lack of Clear Roles and Channels
    Without well-defined roles and open communication channels—like forums, Discord servers, or governance platforms—members can feel confused about where to participate or how to add value.
  • Ignoring Early Feedback
    In a DAO, the “wisdom of the crowd” can be a powerful asset. Overlooking or trivializing user feedback can lead to missed opportunities for innovation and improvement.

Failing to Incentivize Properly

Well-structured incentives lie at the heart of any successful DAO. Whether you’re offering governance tokens, staking rewards, or recognition badges, these incentives must be aligned with the DAO’s long-term goals. Misalignment often causes short-sighted behavior, where participants chase quick rewards rather than contributing meaningfully.

  • Overemphasis on Token Speculation
    If the primary draw for community members is the promise of quick token price gains, you risk attracting speculators instead of builders. This can lead to fleeting participation and sell-offs at the first sign of trouble.
  • Neglecting Non-Monetary Rewards
    Recognition, social standing, and meaningful collaboration can be just as powerful as financial incentives. When a DAO fails to provide pathways for skill development or leadership, member engagement wanes.
  • Cognitive Bias Traps
    Biases such as the conjunction fallacy can mislead founders into believing that if multiple positive outcomes are possible (e.g., rising token prices, active participation, mainstream adoption), then all those outcomes will inevitably happen together. This wishful thinking can blind DAOs to the need for thoughtful, data-driven incentive models.

To avoid these pitfalls, DAO creators must actively foster a culture of transparency, collaboration, and mutual respect. By setting clear expectations, leveraging diverse incentive structures, and consistently involving community feedback, you ensure members are motivated to contribute more than just their votes—they become co-creators in the DAO’s shared vision.

5. Ignoring Technical Considerations

Token Standards and Governance Frameworks

A solid technical foundation is essential when you create a DAO, particularly if it involves on-chain governance. Selecting the appropriate token standards and governance frameworks can significantly impact your DAO’s security, efficiency, and scalability.

Some pitfalls to watch out for include:

  • Choosing Incompatible Token Standards
    If your DAO relies on a token that isn’t easily integrated with governance contracts or lacks upgradeability, you might face roadblocks when implementing new features or patching vulnerabilities.
  • Underestimating Smart Contract Complexity
    Even “simple” governance tokens can hide complex logic behind the scenes. Overlooking these complexities may result in bugs, lockouts, or exploits that harm the DAO’s reputation and finances.
  • Ignoring Off-Chain vs. On-Chain Dynamics
    Governance strategies often combine on-chain decisions with off-chain discussions (e.g., using platforms like Discord or forums). Failing to synchronize these two spheres can fracture community engagement and hamper decision-making.

Poor Architecture and Security

Robust security isn’t just about preventing hacks—it's about building an architecture that can adapt to evolving threats and changing community needs.

Key oversights include:

  • Inadequate Auditing
    Smart contracts require thorough reviews, both automated and manual. Rushing to mainnet deployment without proper audits can lead to major losses—financial, reputational, or both.
  • No Contingency Plans
    If a vulnerability is discovered, how will you respond? Lacking emergency procedures or fallback governance mechanisms can leave a DAO paralyzed when critical decisions must be made quickly.
  • Over-Engineered Solutions
    While security is paramount, over-complicating the DAO’s architecture can create unintended vulnerabilities. Keeping your setup as simple as possible reduces attack surfaces and makes it easier for community members to understand and trust the system.

In short, technical considerations form the bedrock of a functional DAO. Choosing appropriate token standards, thoroughly auditing contracts, and designing for both present-day and future needs are non-negotiable steps in avoiding costly pitfalls.

Best Practices and Lessons

When studying successful DAOs, certain themes emerge time and again. According to Aragon the most robust DAOs share a commitment to simplicity, iteration, and transparent governance. Instead of rolling out overly sophisticated models from day one, they evolve and adapt based on community feedback and real-world performance.

Here are a few best practices worth emulating:

  • Iterative Approach to Governance
    Start small and build up. Launch a Minimal Viable DAO (MVD) to test voting processes, incentive mechanisms, and proposal management. Gather community feedback and refine before taking bigger steps.
  • Simple, Transparent Rules and Processes
    Ensure proposals are easy to understand and that the voting process is accessible to all token holders. Overly complicated frameworks can dissuade new members from participating.
  • Clear Roles and Shared Responsibilities
    Define contributor and community member roles early on. Whether you rely on working groups, committees, or elected leaders, clarity prevents power vacuums and fosters collaboration.
  • Open Communication and Education
    From Discord channels to public documentation, keep conversation and learning at the heart of your DAO. Encourage members to ask questions, propose improvements, and take leadership roles.

Academic Perspectives

Beyond practical experience, a growing body of research offers theoretical insights that can strengthen DAO governance. The discusses emerging patterns in DAOs, including how incentives and on-chain rules interact with off-chain social dynamics. By examining these findings, DAO creators can better anticipate challenges—like voter apathy, whale influence, or collusion—and integrate solutions from the outset.

Incorporating academic perspectives can help:

  • Validate Governance Assumptions
    Empirical data and rigorous analyses can confirm or challenge the assumptions behind your DAO’s architecture, preventing costly mistakes.
  • Stay Ahead of Regulatory and Social Shifts
    Academics often explore how upcoming policies or societal trends might impact DAOs, offering a forward-looking lens that day-to-day builders might miss.
  • Establish Credibility
    Aligning your DAO’s structure and operations with recognized research signals professionalism and thoroughness, potentially attracting more serious contributors, partners, and investors.

Conclusion

As you can see, creating a DAO involves more than just deploying a smart contract and distributing tokens. By examining these common pitfalls—from poor governance thresholds to inadequate legal structures, from neglecting community engagement to disregarding technical complexities—you gain a clearer picture of what not to do when you set out to create a DAO. Failing to address these areas often leads to compromised security, stalled decision-making, regulatory headaches, or outright community collapse

At Nextrope, we specialize in tailored blockchain and cryptocurrency solutions, including DAO creation and tokenomics design. If you’re looking to avoid these common pitfalls and build a thriving DAO that stands the test of time, feel free to contact us or explore more resources on our blog.