Definition
Self-executing code stored on a blockchain that automatically enforces the terms of an agreement when predefined conditions are met, without requiring intermediaries.
Why It Matters
Smart contracts power DeFi, NFTs, DAOs, and most Web3 applications. They enable trustless transactions and automate complex financial operations.
Example
A DeFi lending protocol uses a smart contract that automatically liquidates a borrower's collateral if its value drops below a specified threshold.
Related Terms
Blockchain
Ethereum
DeFi
DAO