Smart contracts are excellent tools for building automated and transparent workflows. In addition to this, the advantage that blockchain provides in terms of immutability and auditability gives architects the ability to design efficient smart contracts give architects and developers the ability to design efficient. enterprise-grade workflows that can integrate with legacy IT systems and business processes. An escrow is a great example of a use case where smart contracts provide value. An escrow is a financial product whereby a third party—such as a bank—will hold assets or money on behalf of two parties that are executing an agreement or a transaction. The third party acts as a facilitator to ensure that the parties in the agreement do not try to commit fraud or cheat each other. Financial organizations could, hypothetically, move management and operation of escrows completely to blockchains to save costs on backend processes, accounting, and reconciliation.
This chapter focuses on creating one such financial product that relies on escrow. We'll build a Letter of Credit (LC) module that can be used to create and issue smart contract-backed escrows on the fly. These smart contracts can also be used for viewing the live status of the escrows by all the participants, and for initiating settlement. By the end of this chapter, you will be able to create an LC/escrow using smart contracts. You will also learn to build and deploy enterprise workflows using DApps.
This chapter will cover the following topics:
- Understanding smart contracts and blockchain-based workflows
- Creating a US dollar (USD) token for accounting
- Deploying a USD token for accounting
- Creating an LC Master smart contract
- Creating an LC smart contract
- Deploying the LC Master smart contract
- Creating the LC module React app
- Running the LC module