# Implementing a financial derivative as smart contract

## TL;DR

This paper explores how smart contract technology can be used to digitally represent financial derivatives, comparing different platforms and providing prototypes for centralized and DLT-based implementations.

## Contribution

It introduces prototypes for smart derivative contracts on centralized and DLT platforms, and discusses legal and integration challenges involved.

## Key findings

- Successful implementation of prototypes on both platforms
- Insights into legal and integration challenges
- Comparison of DLT technologies for derivatives

## Abstract

In this note we describe the application of existing smart contract technologies with the aim to construct a new digital representation of a financial derivative contract. We compare several existing DLT based technologies. We provide a detailed description of two separate prototypes which are able to be executed on a centralized and on a DLT platform respectively. Beyond that we highlight some insights on legal aspects as well as on common integration challenges regarding existing process and system landscapes. For a further introductory note and motivation on the theoretical concept we refer to https://www.law.ox.ac.uk/business-law-blog/blog/2018/12/smart-derivative-contract-constructing-digital-financial-derivative . A very detailed methodological overview of the concept of a smart derivative contract can be found in doi:10.2139/ssrn.3163074.