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Stellar Lumens (XLM) does not have a smart contract language or built-in virtual machine to execute code, and instead, it is optimized for sending, storing, and trading value.
Stellar Smart Contracts (aka SSCs) combine transactions with various constraints to achieve a result.
There is a fair amount of confusion about how Stellar Smart Contracts function and about to what extent they can be used? Those who are interested might want to know what they are and how they differ from Ethereum smart contracts.
Smart Contracts appears like the technical jargon of the Ethereum Network. Smart Contract programming languages like Solidity and Ethereum Virtual Machine (EVM) are built into the Ethereum platform. The Virtual Machine acts like a computer, and the EVM provides developers with an on-chain environment to host and run their Smart Contract Code. The Ethereum smart contracts are written, deployed, and executed on-chain, where they will live forever. The chain itself encapsulates the contract and the logic for executing and interacting.
While Ethereum smart contracts are highly functional, it contributes to more complexity in cases of some use cases.
The SSCs from Stellar is limited in scope compared to the Ethereum Network; however, it is possible to have some creative use cases like escrow contracts, Joint Entity Crowd Funding, lightning channels, and a lot more. Also, developers will be able to write them in languages of their choice.
Stellar Smart Contracts (aka SSCs) combine transactions that have different constraints to achieve an end result. Some of the constraints that are combined to create SSCs are:
Multisignature requires multiple parties to sign transactions on an account. It is possible to assign signature weights and thresholds.
Batching is the concept of including multiple operations in a single transaction. Atomicity is the guarantee that given a series of operations, if one operation fails, they all fail.
Sequences are represented on Stellar via sequence numbers. Sequence numbers can be used to manipulate transactions and guarantee that certain transactions do not succeed if an alternative is submitted.
Time bounds are limitations on the time period that a transaction is valid and can be used to represent time in a Stellar smart contract.
The conditions and logic of the smart contract are created separately from Stellar and then submitted to the network as a transaction when the end conditions are met. There is no direct interaction with the code on the chain when participating in Stellar Smart Contract.
