A Comprehensive Guide to Tezos Smart Contract

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Tezos is built as a next-generation decentralized platform with unique network upgrades and smart contract development capabilities. It is also a platform for developing decentralized applications (DApps). The Tezos team has introduced on-chain governance that allows token holders to drive the evolution of the blockchain. Additionally, the security of smart contracts is provided by the Michelson programming language that supports formal verification. Unlike other popular platforms like Bitcoin and Ethereum, which use proof-of-work algorithms, Tezos uses proof-of-stake to achieve decentralized consensus. 

Michelson Programming Language 

Michelson has to be one of the most exciting programming languages "‹"‹for smart contracts right now. A stack-based strongly typed language for writing smart contracts to secure the Tezos blockchain. Michelson is similar to  Ethereum smart contract bytecode but more readable, secure, and reliable. Any high-level language you can use to write smart contracts for Tezos, such as SmartPy, Ligo, or Lorentz, will eventually compile to Michelson.

The Michelson programming language runs on one of the basic concepts: the stack. Each Michelson contract is a list of instructions that follow in turn. These commands are written in the correct order and executed in the order in which they are written.

There are three main concepts to remember when programming at Michelson. 

 1. New data is pushed to the top of the stack. 
 2. Data on the stack is only available when it is on top of the stack (or second position for some operations described below). 
 3. The order in which data is processed is from top to bottom of the stack.

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The Michelson Smart Contract Structure

A smart contract in Michelson displays a simple structure made of three components:

1. The type of the expected parameter
2. The type of storage
3. The Michelson code

This translates to the following code:

parameter parameter-type ;
storage storage-type ;
code {
  your code...
}

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Tezos Smart contract written in Michelson 

This contract describes a simple auction. The user submits their offer to the contract. If the submitted bid is higher than the contract bid, the old bid is returned and the new bid is saved in the contract. This is repeated until the end of the auction. Accordingly, the winner is the person who retains the same bid at the end of the auction.

Let's take a look at a smart contract written in Michelson. First, we need to define a global repository of smart contracts. For this purpose, we will use several primitive types (including integers and strings) and more complex types such as key-value pairs, timestamps, token counts (tez), etc. Storage is a contract stored in a smart blockchain. Therefore, we need to store information about the highest bidder and bid, as well as the closing time of the auction.

parameter
key_hash
;
storage
(pair :storage
(timestamp %auction_end)
(pair
(mutez %highest_bid)
(key_hash %bidder)))
;
code
{
DUP;
DIP{CDR;};
CAR;
DUUP @storage;
CAR %auction_end;
NOW;
COMPARE;
GT;
IF
{
PUSH
string
The auction has ended";
FAILWITH;
}
{
UNIT;
;
DROP;
AMOUNT @new_bid;
DUUUP @storage;
CDAR %highest_bid;
DUUP @new_bid;
COMPARE;
LE;
IF
{
PUSH
string
"The bid is too low";
FAILWITH;
}
{
UNIT;
};
DROP;
DUUUP @storage;
CDDR @previous_bidder %bidder;
IMPLICIT_ACCOUNT @refund_to;
DUUUUP @storage;
CDAR @previous_bid %highest_bid;
UNIT;
TRANSFER_TOKENS @op;
DUUUUP @storage;
DUP;
CAR %auction_end;
SWAP;
CDR;
CDR %bidder;
DUUUUP @new_bid;
DIIIIP { DROP; };
DIIIIIP { DROP; };
PAIR %highest_bid %bidder;
SWAP;
PAIR @storage %auction_end;
DUP;
CAR %auction_end;
SWAP;
CDR;
CAR %highest_bid;
DUUUUP ;
DIIIIP { DROP; };
SWAP;
PAIR %highest_bid %bidder;
SWAP;
PAIR @storage %auction_end;
NIL
operation;
DUUUP;
DIIIP { DROP; };
CONS;
PAIR;
} 

The contract is really simple. It checks to see if the auction is still in progress, compares the position of the new bid with the old bid, and updates the storage value accordingly.
 

As you can see, Michelson's smart contracts are quite difficult to understand and develop, so it is recommended to use Liquidity instead.

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Conclusion

Tezos is a young blockchain platform with great prospects for smart contract development. The most interesting features of Tezos are: 

 1. Proof of Stake consensus 
 2. High transaction throughput 
 3. Strong language 
 4. Simplified formal security verification of smart contracts. 

 This platform has a chance to become the next Ethereum. 

Interested in exploring the potential of Tezos blockchain for your project development? Connect with our skilled blockchain developers to get started.