Smart Contract Outsourcing Pros and Cons for Businesses

The Shift Toward Smart Contract Outsourcing

Smart contracts are powering decentralized applications, NFTs, DeFi platforms and enterprise-grade financial systems throughout the blockchain economy.Being self-executing eliminates the middleman, brings transparency and allows for automated trust. However, in-house smart contract development may not always be feasible, which is where the smart contract outsourcing comes in.

When companies seek to outsource a project, they are closing the talent gap either by hiring developers with experience, or by partnering with a smart contract development company in India or any of the other regions that specialize in blockchain. Like any other business decision, there are pros and cons to outsourcing, however, in the world of smart contract development, there are some factors to consider before you pull the trigger.outsourcing will have its pros and cons. In this blog, we will look at the pros and cons of smart contract outsourcing, and what businesses should know about the smart contract development process, costs and tools.

Understanding Smart Contract Development

A smart contract is an autonomous agreement codified onto a blockchain. A smart contract development process may include one or more of the following phases:

1. Requirement Analysis – Get a full understanding of the business requirements and the end goals.
2. Technical Design – Pick the blockchain they want to build on (Ethereum, EOS, BNB Chain, Polygon, etc.).
3. Testing & Auditing – A smart contract audit and development review for identifying risks related to security.
4. Maintenance & Upgrades – Constantly monitoring the smart contract and fixing bugs when they arise.

Since development needs experienced skills, a lot of companies hire smart contract development services to avoid developing everything in-house.

The Pros of Outsourcing Smart Contract Development

1. Access to Skilled Talent

When you utilize outsourcing companies, you can collaborate or partner with the best-skilled developers from the best smart contract development company, without the responsibilities of hiring employees. Many companies focus on custom NFT smart contract development, or only work on DeFi smart contract development projects, so you’re accessing true niche talent and industry knowledge.

2. Cost Effective Development

Developing a contract in-house may be costly depending on how involved your firm is. Between soft and hard costs (infrastructure, hiring, training), many users find outsourcing lowers their smart contract development cost. For example, smart contract development outsourcing in India because there are so many developers available at a competitive price.

3. Speed & Efficiency

Specialist companies usually have pre-established workflows and smart contract development- smart contract development tool kits. And therefore are able to deploy faster and mitigate time to market constraints compared to employees who will have to train and learn how to become a smart contract developer from scratch.

4. Security & Audit Support

Many outsourcing companies solidify smart contract audit features as part of their service offering. This also ensures that a smart contract has been checked for not only the ones listed but also any vulnerabilities to consider as decided by your team, such as reentrancy attacks or unnecessary gas, or logic errors.

5. Flexibility & Scalability

Your company can scale your blockchain projects up or down by outsourcing your smart contract work, without needing a permanent in-house team for blockchain development. This flexibility is most useful with seasonal projects like NFT launches, or for yield farming, staking, or other protocol developments.

The Cons of Outsourcing Smart Contract Development

1. Data & Security Risks

Outsourcing typically means providing access to core concepts, business logic, and level-sensitive data to an external associate smart contract development company. While outsourcing can help to source specialized experience and speed up delivery, it does also come with risk. If businesses do not implement sound agreements, clear intellectual property rights and confidentiality clauses, they may expose themselves to risks of IP theft, data misuse, and/or loss of finding out exclusive ownership.

2. Lack of control

When you rely on third-party developers, you are giving up some level of control in the smart contract development process. Miscommunication can result in some way of misaligned expectations.

3. Hidden costs

While outsourcing saves on the initial development costs, hidden costs can be incurred with revisions, audits, or additional integrations. Therefore you should clarify the details of the smart contract audits and development pricing model ahead of time before entering into a partnership.

4. Reliance on external vendors

Inconsistent outsourcing means your in-house team will spend less time building basic blockchain skills and fundamentals. If you want to eventually recruit a smart contract developer internally, you may have a hard time when you rely on vendor contracts.

Best Practices for Outsourcing Smart Contracts

1. Investigate Vendors Closely – Always check reviews, case studies, and portfolios! Find the best smart contract development company in India or worldwide.
2. Request Audits for Security – ask if the provider will include a solidity smart contract audit in their package.
3. Know Your Costs Clearly – Be sure to clarify the total smart contract development costs including audits/testing/maintenance. 
4. Define Ownership & Rights – Contracts should state who owns the intellectual property and source code.
5. Use Training Resources – Ask whether the provider can recommend their internal team to a smart contract development course, or smart contracts developer tutorial to be able to build knowledge up within their company alongside outsourcing.

Smart Contract Development Tools for Outsourced Teams

Typically, outsourced developers will leverage professional smart contract development tools such as:

• Remix IDE (or a variation of) – for Ethereum Solidity development.
• Truffle Suite – for development, testing, and deployment.
• Hardhat – for testing and debugging.
• EOSIO – for EOS smart contracts.
• OpenZeppelin – for pre-tested libraries for secure smart contracts.

These tools minimize the probability of errors and improve the development and audit process for smart contracts.

Should you outsource the project, or work on it in-house?

Ultimately a business decision based on the desired outcomes. If you want to integrate blockchain into your business, training an internal team with a smart contract development course may be the best option. If speed, security and expertise are key considerations, outsourcing to the best smart contract development company will be the best choice.

Many businesses adopt a hybrid approach: outsourcing initial development while gradually training staff using a smart contracts developer tutorial or external courses.

Future-Proofing with Smart Contract Outsourcing

Outsourcing smart contracts could shift the odds for companies wanting to innovate in blockchain while escaping the burden of preparing and maintaining an in-house development team. Building a capable internal blockchain department requires hiring, training (and retaining) specialized talent – an investment not every organization is set up or willing to make, especially businesses in startup and mid-sized categories.

By outsourcing, organizations can partner with a reliable custom NFT smart contract development agency or possibly an associative smart contract development agency to tap into specialized horizontal expertise that supports their company vision and goals.  These agencies provide proven experience, dedicated resources and established tools to ensure the contracts align with good security and scaling practices and also on the systems specifications.  Furthermore, outsourcing reduces time to market enabling organizational competitive advantage in a fast-moving industry.