Smart Social Contracts, unstoppable promises on the Blockchain

Massimo Lomuscio
Published in
6 min readFeb 4, 2018

At Reason, we are bringing the Corporate Social Responsibility on the blockchain — Read how they are both going to change the World.

Image by RawPixel

“We believe this is the dawn of a new era. An era where consumers can push companies to act as a force for good, and companies can thrive because of their positive actions.”

Doing Well by Doing Good. What is the CSR?

The Corporate Social Responsibility (CSR) is an agreement between companies and customers.
Better said, it’s a promise that companies make to customers: if consumers purchase services or goods from a company, the organization will support projects with a positive social or environmental impact that customers care about.
Within the CSR, Cause Marketing is a more specific promise of a donation in exchange of a purchase: a theather that declares to donate 20% of the price of their sold tickets to a chosen charity, for example.

The reason companies get involved in cause marketing is not pure philanthropic, but because it has been proved to provides tangible benefits for companies:

  • Increased brand image, as the focus shifts on the company’s cause and its mission. This drives loyalty increase, better retention and more advocates: 72% of consumers would recommend a brand that supports a good cause over one that doesn’t.
  • Increased revenues, as the cause tie helps the product and company to stand out in the crowded marketplace. 42% of shoppers would pay extra for products and services from companies committed to positive social and environmental impact.

In fact, Cause Marketing has been used for more than 50 years with the dual purpose of increasing profitability while bettering society; it’s a market that has grown more than 20 times in the last 20 years (currently estimated at $2.2B) and used by thousands of companies.

Online Cause Marketing is particularly effective. Amazon has donated $100 million in the last 5 years through its CM program. Not only that: while announcing their achievements, they declared they were going to increase the percentage of donations — by 10 times. If Amazon is willing to increase their investment by 900%, it means only one thing: Cause Marketing works.

Something is missing.

Cause Marketing is not transparent: customers cannot know which companies actually comply with their “We do good” statements.

Turns out customers want to know:

  • 75% of consumers wish companies would tell them more about the details of their campaigns.
  • 85% of consumers question the impact of their purchase when buying a product that supports a cause.
  • 40% Will NOT purchase a company’s products or services if it doesn’t communicate the results of its CSR efforts.
  • 82% Are more likely to purchase a product that clearly demonstrates the results of its CSR initiatives.

How much more effective would this strategy be if, instead of being based on words, it was backed by provable facts?
How much more would both companies and consumers benefit from this?

Reason unlocks a new era for the Corporate Social Responsibility.

At Reason, we are building a platform for companies to set up their promises on the blockchain.

The blockchain is a relatively new technology that will affect plenty of industries in the future. Many say it will have the same impact that the Internet had on our lives.

Imagine the blockchain as a huge, global spreadsheet that is transparent and incorruptible and tracks all the transactions between individuals in an irreversible way. It is stored and maintained by thousands of people (miners) across the globe who have special computers.

On the blockchain, you can also create special agreements between individuals that have the same properties of a transaction: once agreed, they cannot be changed or reversed.

These agreements are called “smart contracts”, because the blockchain will execute them when an agreed condition occurs. If I tell you that in 20 days I will give you 100$ and I write (code) it into a smart contract, the blockchain system will automatically transfer you the money at the right time. Even if I change my mind, even if you don’t want it anymore; I can’t corrupt/threat/cheat: it’s an immutable agreement. You can read more about the blockchain here.

What is the benefit of a promise on the blockchain? To transform it into contract.

It obliges a business to transparently and immutably comply with its promise. If a theater says that 20% of the cost of a ticket goes to charity, the only option the incorruptible system will allow is to comply.

We call these promises Smart Social Contracts, where all promises become unstoppable.

A new dawn. Image by Kenjylee.

Internet brought us Free things. Blockchain will bring us what is Fair.

Emails, Search engines, Social Networks, News, Deliveries, Music, Videos. The dominant business model of the consumer internet is based on free services. Companies realized the value of their business was in the data of customers, so they marketed their products at no cost for the user.

With blockchain, we have now the opportunity to create new business models based on the accountable social impact of companies. To add value, to have any value, companies will have to prove what they promise.

We empower businesses to formalize their commitment in a smart “social” contract and enhance the consumers’ confidence into the CSR.

We boost marketing effectiveness to a new level where a company’s product and its purpose are bound together.

It’s better than a CSR statement: it’s on the blockchain.

Any business of any size and anywhere in the World can plug into our platform and set up its promises, indicating the preferred social cause.

But the best opportunities can arise for innovative ventures that structure their revenue streams around social initiatives.

We facilitate the creation of new types of companies that create win-win relationships with their customers, suppliers, ecosystems. These companies will give the blockchain technology a Reason to take off.

Image Credits: Piro4d

How does it work?

For a more detailed explanation refer to: How Smart Social Contracts work.

  • A company creates its Smart Social Contract, specifying the promise it is committing to (for example: 5% of revenues will go to Save the Children).
  • Whenever a customer pays or completes an action (for example, sign up to a newsletter), he or she can track his/her promise on the ledger to check the charity has received it. Nobody can manipulate or corrupt that ledger where any promise is transparently executed.
Mr/Ms Geralt, thank you again for your image

Why companies will love this.

  • First, it’s easy to plug in. Our simple tools avoid any hassle.
  • Most importantly, your customers will love you. It’s you telling them, proving them, that every purchase makes a difference. It’s Cause Marketing. It’s your company value skyrocketing.

“People buy why you do, not what you do” — Simon Sinek

Let people buy your mission and your cause.

Why YOU, as Consumer, will love this.

Finally a tool to see the truth and truly connect to the cause you care. Finally a way to know which companies actually add value, and which ones you can value.

This is the dawn of a new era.

Don’t just “Do Good”. Prove it.

This project is growing and coming to life thanks to:

  • Massimo “Max” Lomuscio, CEO and Founder
  • Silvio Scarfó, Head of Technology