A Look into Hybrid Smart Contracts; What are Their Uses?

Beginner’s Guide / 24.06.2021

Smart contracts were introduced in 2015 with the introduction of the Ethereum network. Their role was to digitize and tokenize financial and non-financial services like payments, trading, etc. Through the use of smart contracts, the process of signing contracts is highly simplified, only following the blockchain. 

Primarily, smart contracts are not bound by a particular jurisdiction; therefore, they can operate on a global level.   

However, one problem associated with making smart contracts is that they cannot access off-chain data. Instead, hybrid contracts can work with data already uploaded on the blockchain and institute systems that collect such data. Even more, standard smart contracts only work on simple computations, but they cannot generate random numbers on their own.

What are Hybrid Smart Contracts?

These are digital blockchain-based contracts introduced with features superior to standard smart contracts. These smart contracts can solve the problems facing standard smart contracts. 

The hybrid smart contract interacts with the non-blockchain world, thus collecting off-chain data. When it comes to complex computations, this can execute them efficiently and without sacrificing decentralization in the process.

These contracts can connect with non-blockchain data, execute the required computations faster and more efficiently. Usually, hybrid smart contracts leverage an oracle network that offers a link across blockchains or between on-chain and off-chain data

Combining On-chain and Off-chain Data

Primarily, most blockchains, including Ethereum and Cardano, offer on-chain smart contract options. Contrarily, these are a combination of on-chain and off-chain data and services. Therefore, the contract provides services by collecting data offline and sending it to the blockchain world.  

Some on-chain activities include processing and executing transactions, offering dispute resolutions and guidelines for proper contract interactions. 

The off-chain options include fetching, securing, validating, and delivering data to smart contract options. The off-chain services also involve interacting with layer two solutions and multiple blockchain options. 

Use Cases of Hybrid Smart Contracts

Like regular smart contracts, hybrid smart contracts offer excellent services with multiple use cases in the financial and non-financial world. Due to their technological advancement, they can be used to perform highly complex tasks like; 

The Gaming World

In the past few years, there has been vast growth in the crypto gaming world. The development has been seen due to the excellence of performance. 

Hybrid smart contract systems can help in controlling the gaming model and rewards distribution plans. Furthermore, due to the emergence of gaming dApps, games can be interacted with other IoT devices to collect real-time physical data and send it to the chain. The interaction of IoT devices and game Dapps will ensure game performance is top-notch.


The insurance world could also benefit highly from using the hybrid oracle smart contract mechanisms. In insurance, they work with predictions and assumptions of what could happen and the possible costs involved. 

Using hybrid smart contract options, the insurance will collect data on real-world events like weather and update it on the contracts. The result is the insurance collections and claims are utterly made simple. 

Identity Systems

Identity systems also require the collection of real-world data to provide more efficiency. Smart contracts pre-determine the information needed and the possible actions to take after accessing such information. The advanced hybrid smart contract options can collect the required information and ensure it remains utterly private.  


The real-time campaigns are driven by real-time data, with real-time reward distribution. Hybrid smart contracts leveraging decentralized oracle networks can help understand the effect of the marketing campaign by taking advantage of customer data.  Therefore, these contracts can garner real-world data, analyze it and update the chains. 

The Benefits of Hybrid Smart Contracts

Unlike regular smart contracts, hybrid smart contracts can collect vast information and complete more complex computations. Therefore a project will provide highly efficient services. 

Since they perform regular smart contracts work, hybrid contracts have a wider reach, thus can be more reliable. They can reach the far ends of the globe. Since they leverage the blockchain and internet, these contracts do not depend on the law to enforce them—the autonomous algorithms used in making these contracts complete the work efficiently. 

Chainlink Provides Hybrid Smart Contract Options

Chainlink is one of the best data oracle networks in the crypto network today. This platform, which was launched in 2017, was designed to provide excellent hybrid smart contract options for users and crypto projects. 

The Chainlink network oracle services can collect reliable and immutable data and input them into smart contracts based on the blockchain. Therefore, all projects can decide to interact with Chainlink and enjoy the benefits that come with the oracle network.


Creating decentralized oracle networks is the best way of implementing a hybrid smart contract mechanism to ensure the provision of better services. Generally, the hybrid contracts will work on complex algorithms that the standard smart contract solutions cannot. 

Hybrid smart contracts also have some excellent use cases, including gaming, marketing, insurance, identity networks, supply chain, and many more.

Looking at the growth of Chainlink, an oracle network, there is a massive possibility of more hybrid smart contract options joining the crypto world. Therefore, it’s safe to say that hybrid smart contracts will be an excellent defining factor in the next decade of crypto. 

Adam is an outgoing young lad who likes adventures and discovering new things. Despite his boring life, he loves writing about cryptocurrencies and exploring what blockchain technology can do for the coming digital world where all adventures will be virtual.