Smart Contract Transfer Exchange Platform: Player Ownership

In this scenario a smart contract could be utilized to represent the relationship between the player and the club on a distributed ledger. You can see that Steven Gerrard and Liverpool both have the ability to suggest updates to the contract where as the FA is able to see the contract but is not update it. Let’s take a look at how this digital agreement might be able to form.

Initiating the Agreement:

In the above scenario what we have is an active smart contract that was entered into by both Liverpool and Steven Gerrard. In this case it works very similarly to a real contract by representing the legal agreement between the parties.

The benefits over this type of smart contract may not be readily apparent on the surface but as we look in more detail (and particularly when we get onto the Case Studies) it will become more clear. The key thing to look at here is the 3 different parties in the diagram:

• Steven Gerrard

• Liverpool

• The FA

Each one of these parties has their own view of the ‘ledger’ and complete autonomy over their own data. The agreement we see has been entered into autonmously without the need to intermediary brokerage or central party authority.

The starting point of creating such an agreement would be that each party has onboarded onto the platform. Liverpool have an account, Steven Gerrard has an account and the FA has an account.

These ‘accounts’ would also be smart contracts, when Steven Gerrard joined the SCTP it created a smart contract which is his account. This smart contract is on the ledger and he has visibility and control over all its data. However, certain information in the smart contract is visible to other parties on the SCTP. Let’s say the following business logic is in place:

• When a player onboards they enter personal data to verify their identity, this is maintained and visible to only the player.

• When a player successfully onboards on to the platform their personal information is kept only visible only to them but their name and the fact that they are available to sign is made public to club participants and regulatory body participants.

This means that participants of the platform can see Steven Gerrard is on the platform meaning that and they are able to approach him.

This is obviously an incredibly rudimentary example but hopefully one can see the concepts that could potentially becomes useful here. Players being able to out themselves on the market without the need for intermediaries is already a big step. If there workflow was tweaked a little here and the FA has approval authority over a player onboarding onto the SCTP we can start to see a useful concept forming.

Now that Liverpool can see Steven Gerrard is on the platform they can go through the process of creating an agreement with him. They could do this by opening smart contract that is visible to him to gauge his interest, opening the smart contract would effectively be the same as making him a transfer offer. By Steven Gerrard's name being visible on ledger, backed up by personal data to verify it's him, Liverpool are able to use this as an opening to offer him a contract.

This offer would need to be visible to Steven Gerrard but not necessarily visible to the FA so whilst the offer would be on ledger, based on the privacy configuration only Liverpool and Steven Gerrard would be able to see it.

So now we are in the situation where Liverpool have created a smart contract that has choices available to Steven Gerrard.

Let's look at this in a bit more detail:

The offer that Liverpool have made would be visible to both them and Steven Gerrard but each side would have different choices they be able to make to move the workflow of the smart contract on:

• Steven Gerrard would be able to accept the offer, reject the offer or amend the offer.

• Liverpool would be able to withdraw the offer or amend the offer.

At this point Steven Gerrard could amend the offer if say he wanted to adjust the proposed wage or length of contract. Obviously this is highly simplified but keep in mind that nowadays, any term you can put in a real contract, you could digitally represent in a smart contract so complex terms could be factored in here.

So let's say Steven Gerrard amends the offer to add 2 years to the length of the contract and double the salary. We would now be in the situation where the choices are reversed. The impetus, then, would be on Liverpool to accept the counter offer and complete the agreement.

You'll notice that both sides of the transaction have visibility to the history of the transaction. This is because this is a smart contract and the ledger would by default capture the transaction history so one would be able to see the history of the negotiation. This 'immutability' of data is something fundamental to the concept of blockchain. The maintenance of history with multiple parties in systematic agreement fundamentally creates something that cannot be overwritten by malicious parties. It therefore give us a consensus truth of what has happened and well as what is happening.

What benefit is this to the transfer market? Well in this scenario not much but in the case studies we will start to look at scenarios where historical records of transactions can be valuable.

Completing the Agreement:

Let's say that at this point Liverpool accept the terms of the counter offer and select the ‘Accept’ option. The initial terms would have been agreed and the contract would progress to the next stage.

At this point we could discuss all the various additional stages of agreement the contract would have to go through i.e. medical etc. As mentioned above any term we could put in a real contract we could capture digitally but just for the sake of argument let's ignore contingency agreements such as medical evaluation in order to demonstrate the high level structure of the workflow.

So that in mind let's say the next stage of the workflow would be for the agreement between the clubs to be authorized by the FA. This would mean that when an agreement on terms is reached the smart contract’s privacy would change and a authoritative participant type (in this case, the FA) who would have the choice to approve and reject the transfer.

This would be where we get into the importance of levels of privacy. Here, there would be no need for the FA to see the salary arrangements but they would need to know the playing arrangement that they are approving. Extrapolating this out to a more realistic scenario, one could imagine including the information in the smart contract that the FA would need to know to approve the transfer, i.e. registration information etc.

Let's assume that the FA approve the transfer this would complete the agreement and take us back to the original contract we saw.

Now that this contract is in place let's look at how this would affect each participants original view of the ledger:

The potential benefits of blockchain technology can start to be recognized here, although we talk about these in much more details in the Case Studies section. But already we can see some benefits appearing:

• Immutability of data: This will serve as a permanent track record of the legal status of both parties.

• Transparency and Privacy of data: Whilst the governing bodies can have visibility to the data (which they are legally authorized to have), they have nothing more than visibility. So control remains with the player and the club whilst full transparency is available to the parties who need it. This could potentially reduce a lot of problematic areas with regards to registering players etc.