NFT-enriched smart contracts for smart circular economy models

Vera Gerasimova (), Gunnar Prause (), Gunnar Prause () and Thomas Hoffmann ()
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Vera Gerasimova: Tallinn University of Technology, Estonia
Gunnar Prause: Tallinn University of Technology, Estonia
Gunnar Prause: Hochschule Wismar, University of Applied Sciences, Technology, Business and Design, Germany
Thomas Hoffmann: Tallinn University of Technology, Estonia

Entrepreneurship and Sustainability Issues, 2023, vol. 11, issue 2, 93-110

Abstract: A smart contract is an electronic transaction protocol intended to digitally facilitate, verify, or enforce the execution of the terms of underlying legal agreements. Thus, by following the traditional perception, smart contracts target reducing transaction costs, including arbitration and enforcement costs, by realizing trackable and irreversible transactions using blockchain technology for distributed databases. However, the potential of smart contracts goes far beyond cost reductions by facilitating the entrepreneurial collaboration of cross-organizational business processes. Industry 4.0 aims to create smart supply chains. Smart contracts and Non-Fungible Token (NFT) solutions can realize new smart business models in the circular economy. The recent case study from the automobile industry demonstrates how using NFT technology in the form of a digital certificate can become an integral part of smart product lifecycle management in the frame of a circular economy integrating innovative business models with smart service design concepts. By doing so, the use of NFT paves the way for dynamic and adaptable supply chains, evolving needs of stakeholders towards a sustainable and circular economy. The authors participated in research projects related to smart supply chains and circular economy. Thus, the paper discusses the question of how and to what extent smart contracting, blockchain technology, NFT solutions, and Service Design can facilitate the implementation of smart business models in the context of the circular economy. The research is based on expert interviews, surveys, and case studies from EU projects focusing on the Baltic Sea Region.

Keywords: smart contracts; Non-Fungible Token (NFT); smart supply chains; service design; business models; circular economy (search for similar items in EconPapers)
JEL-codes: L23 L62 L86 M15 O33 Q55 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ssi:jouesi:v:11:y:2023:i:2:p:93-110

DOI: 10.9770/jesi.2023.11.2(7)

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