What Has Been The Evolution of the Smart Contracts Market in Recent Years?
The smart contracts market has seen considerable growth due to a variety of factors.
• The market size for smart contracts has seen a tremendous increase in the past few years. The market is expected to expand from $2.63 billion in 2024 to $3.21 billion in 2025, growing at a compound annual growth rate (CAGR) of 22.0%.
Factors including decentralized applications, heightened security worries, emergence of initial coin offerings, regulatory compliance requirements, and interoperability initiatives have contributed to the growth experienced in the historic period.
What Are the Future Growth Projections for the Smart Contracts Market?
The smart contracts market is expected to maintain its strong growth trajectory in upcoming years.
• The market size of smart contracts is forecasted to witness a significant rise in the coming years, reaching a value of $7.45 billion by 2029 with a CAGR of 23.4%.
This predicted growth in this period is due to factors such as the ability for cross-chain compatibility, the expansion of the NFT ecosystem, the influence of quantum computing, energy efficiency considerations, the creation of global standards, and the standardization of smart contract templates. Notable trends for this forecasted period include the convergence of traditional legal systems, the inclusion of decentralized finance (defi), incorporation of oracles for real-world data, the use of NFTs and smart contracts in the arts domain, and the tie-up with the Internet of Things (IoT).
What Are The Core Factors Supporting Growth In The Smart Contracts Market?
The anticipated digital evolution within the Banking, Financial Services, and Insurance (BFSI) sectors is predicted to stimulate the expansion of the smart contract market. This digital adaptation in BFSI involves the incorporation of digital methods and tactics to enhance customer interaction, simplify procedures and elevate the competitive edge. Important aspects of these digital modifications in BFSI include process robotics and streamlining. Smart contracts with automation features, based on specified conditions, promote efficient transaction, claim, and settlement processes, minimising paperwork and manual interference. For example, a report by Alkami Technology Inc., a US firm specialising in digital banking solutions, stated that in 2022, mid-size banks and credit unions have heightened their investment in digital innovations, reaching close to $425,000 per $1 billion in assets, as compared to $200,000 per $1 billion in assets in the prior year. Furthermore, Peer-to-peer (P2P) payments saw a surge in popularity among digital banking users in 2022, jumping from 12% to 25%. As a result, this digital transformation within the BFSI sectors is set to fuel the development of the smart contract market. The increasingly high demand for IoT devices is another factor that is predicted to steer the expansion of the smart contracts market. IoT devices, embedded with sensors, software and additional technologies, form a network of tangible objects that can exchange data over the internet. The data generated by IoT sensors can be validated and authenticated via smart contracts, which ensure data integrity and prevent any malpractices. For instance, GSMA Intelligence, a mobile communication association based in the UK, predicts that IoT connections are expected to rise from 15.1 billion in 2021 to 23.3 billion by 2025. This escalating demand for IoT devices is expected to drive the smart contracts market's growth.
What Are The Major Segments Within The Global Smart Contracts Market?
The smart contracts market covered in this report is segmented –
1) By Contract Type: Smart Legal Contracts, Decentralized Autonomous Organizations (DAO), Application Logic Contracts (ALC), Distributed Applications (DApps)
2) By Technology: Ethereum, Namecoin, Ripple, Rootstock (RSK), Other Technologies
3) By Enterprise Size: Small And Medium Enterprises, Large Enterprises
4) By End-Use: Banking, Financial Services, And Insurance (BFSI), Retail, Healthcare, Real Estate, Logistics, Other End Uses
Subsegments:
1) By Smart Legal Contracts: Standardized Legal Contracts, Customized Legal Contracts
2) By Decentralized Autonomous Organizations (DAO): Investment DAOs, Service DAOs, Grant DAOs
3) By Application Logic Contracts (ALC): Financial Contracts, Supply Chain Contracts, Insurance Contracts
4) By Distributed Applications (DApps): Gaming DApps, Finance DApps (DeFi), Social DApps
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Which Emerging Market Trends Are Altering The Smart Contracts Industry?
Significant companies in the smart contract market are concentrating their efforts on crafting innovative, self-service, and serverless platforms like Chainlink Functions, to offer dependable customer service. Characterized as a serverless cloud computing platform, Chainlink Functions facilitates app development and deployment for developers without the need for managing infrastructure. For example, in March 2023, Chainlink, a British company that supplies real-world data to smart contracts running on blockchain, introduced Chainlink Functions. This is a platform that's serverless and self-serviced, designed for developers to integrate their smart contracts and decentralized applications (dApps) with Web 2.0 application programming interface. This newfound platform empowers builders to execute customizable computations on Web 2.0 APIs through its network in mere minutes. Furthermore, it is compatible with broadly recognized programming languages such as JavaScript, simplifying the transition for developers into the Web3 domain.
Who Are the Key Players In The Smart Contracts Market?
Major companies operating in the smart contracts market report are:
• Amazon.com Inc.
• International Business Machines Corporation
• Oracle Corporation
• Tata Consultancy Services Limited
• Infosys Limited
• ELEKS Ltd.
• Cygnet Infotech Pvt Ltd.
• ScienceSoft USA Corporation
• R3 Corda
• Dotsquares Ltd.
• Alchemy Insights Inc.
• Apriorit Inc.
• AVA Labs Inc.
• Quytech
• ZirconTech LLC
• SoluLab Inc.
• Innowise Group
• Cubix
• PrimaFelicitas Ltd.
• Sumatosoft
• Infograins Software Solutions Pvt Ltd.
• Idealogic
• Quant Network Limited
• Monax Industries Ltd.
• Vention
• Evercode Lab
• EvaCodes
• Second State Inc.
• Pragmatic DLT Inc.
• Labrys
What Is The Most Dominant Region In The Smart Contracts Market?
North America was the largest region in the smart contracts market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the smart contracts market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa
