Formal Specification and Verification of Smart Contract-Based Loan Management System Using TLA+
Smart contracts provide convenience to the financial industry by automating complex transactions without intermediaries. In the context of decentralized finance, ensuring the correctness, reliability, and efficiency of these automated systems is crucial, especially for loan management processes. Thi...
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IEEE
2025-01-01
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| Series: | IEEE Access |
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| Online Access: | https://ieeexplore.ieee.org/document/10949194/ |
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| author | Seongho Yoon Jin-Young Choi |
| author_facet | Seongho Yoon Jin-Young Choi |
| author_sort | Seongho Yoon |
| collection | DOAJ |
| description | Smart contracts provide convenience to the financial industry by automating complex transactions without intermediaries. In the context of decentralized finance, ensuring the correctness, reliability, and efficiency of these automated systems is crucial, especially for loan management processes. This paper presents a formal specification of a smart contract-based loan management system using TLA+. The system is designed to handle various types of loans, including credit-based and collateral-backed loans, managing both regular and early repayments, as well as handling late payments and collateral forfeiture. Our specification defines key components such as loan states, repayment calculations, and collateral management, ensuring that all aspects of the loan lifecycle are rigorously modeled and verified. Safety properties, such as preventing negative loan balances and ensuring proper collateral ownership transfer, are enforced alongside liveness properties that guarantee the system reaches a termination state where all loans are either fully repaid or defaulted. We used the TLC model checker to verify the correctness of the system across all possible states and transitions. The verification process confirmed that the system consistently adheres to its formal specification under a variety of operational conditions. Through the formal specification and comprehensive verification with TLA+, this work enhances the dependability of smart contract based financial systems, providing a secure, verifiable, and resilient loan management framework ready for deployment in real-world DeFi environments. |
| format | Article |
| id | doaj-art-e7c1e2e4a24646ee817365a8a543f6bc |
| institution | DOAJ |
| issn | 2169-3536 |
| language | English |
| publishDate | 2025-01-01 |
| publisher | IEEE |
| record_format | Article |
| series | IEEE Access |
| spelling | doaj-art-e7c1e2e4a24646ee817365a8a543f6bc2025-08-20T03:08:28ZengIEEEIEEE Access2169-35362025-01-0113620606207010.1109/ACCESS.2025.355808110949194Formal Specification and Verification of Smart Contract-Based Loan Management System Using TLA+Seongho Yoon0https://orcid.org/0000-0001-7915-275XJin-Young Choi1https://orcid.org/0000-0002-8100-7583School of Cybersecurity, Korea University, Seoul, South KoreaSchool of Cybersecurity, Korea University, Seoul, South KoreaSmart contracts provide convenience to the financial industry by automating complex transactions without intermediaries. In the context of decentralized finance, ensuring the correctness, reliability, and efficiency of these automated systems is crucial, especially for loan management processes. This paper presents a formal specification of a smart contract-based loan management system using TLA+. The system is designed to handle various types of loans, including credit-based and collateral-backed loans, managing both regular and early repayments, as well as handling late payments and collateral forfeiture. Our specification defines key components such as loan states, repayment calculations, and collateral management, ensuring that all aspects of the loan lifecycle are rigorously modeled and verified. Safety properties, such as preventing negative loan balances and ensuring proper collateral ownership transfer, are enforced alongside liveness properties that guarantee the system reaches a termination state where all loans are either fully repaid or defaulted. We used the TLC model checker to verify the correctness of the system across all possible states and transitions. The verification process confirmed that the system consistently adheres to its formal specification under a variety of operational conditions. Through the formal specification and comprehensive verification with TLA+, this work enhances the dependability of smart contract based financial systems, providing a secure, verifiable, and resilient loan management framework ready for deployment in real-world DeFi environments.https://ieeexplore.ieee.org/document/10949194/Smart contractsdecentralized financeTLA+formal specificationformal verificationloan management |
| spellingShingle | Seongho Yoon Jin-Young Choi Formal Specification and Verification of Smart Contract-Based Loan Management System Using TLA+ IEEE Access Smart contracts decentralized finance TLA+ formal specification formal verification loan management |
| title | Formal Specification and Verification of Smart Contract-Based Loan Management System Using TLA+ |
| title_full | Formal Specification and Verification of Smart Contract-Based Loan Management System Using TLA+ |
| title_fullStr | Formal Specification and Verification of Smart Contract-Based Loan Management System Using TLA+ |
| title_full_unstemmed | Formal Specification and Verification of Smart Contract-Based Loan Management System Using TLA+ |
| title_short | Formal Specification and Verification of Smart Contract-Based Loan Management System Using TLA+ |
| title_sort | formal specification and verification of smart contract based loan management system using tla |
| topic | Smart contracts decentralized finance TLA+ formal specification formal verification loan management |
| url | https://ieeexplore.ieee.org/document/10949194/ |
| work_keys_str_mv | AT seonghoyoon formalspecificationandverificationofsmartcontractbasedloanmanagementsystemusingtla AT jinyoungchoi formalspecificationandverificationofsmartcontractbasedloanmanagementsystemusingtla |