Because Sawtooth is meant to be a pluggable, enterprise-oriented architecture, the application layer is highly configurable. Each Sawtooth-based blockchain allows transactions to be made based on what are called transaction families. Transaction families determine what sorts of operations are permissible on the Sawtooth blockchain. For instance, it is possible to allow smart contracts, such as with Ethereum, using the Seth transaction family. Under Seth, all possible Ethereum-based contracts and Ethereum contract-based transactions would be permissible, along with all the possible mistakes and issues such freedom creates.

A Sawtooth-based blockchain can have multiple transaction families operating at once. In fact, this is common, as one of the transaction families that ships with Sawtooth is the settings family, which stores system-wide configuration settings directly on to the blockchain. In most cases, this transaction family and a few others, comprised of business use cases, will be operating in parallel. Furthermore, because multiple transaction families can be running at the same time, this means that business logic can be isolated and reused as an independent transaction family across multiple blockchain implementations.

Because many businesses have only a few valid business rules and business outcomes, it is possible to customize the available operations on the blockchain through the creation of a custom transaction family. For instance, a shipping company may use Sawtooth to track the location of packages, and the only valid transactions might be a new package, package accepted, package released, package in transit, update package location, and package delivered. By restricting the available transactions, the number of errors and mistakes can be reduced. Using the shipping company example, network participants could be trucking companies, warehouses, and so on. For a package to move between a truck and a warehouse, the two network participants would issue package released and package accepted transactions, respectively, in a batch on to the blockchain. This brings us to the next concept in Sawtooth: Transaction Batches.