Smart Contract
Self-executing code deployed on a blockchain that automatically enforces agreement terms when conditions are met.
A smart contract is a programme stored on a blockchain that runs exactly as written when specific conditions are met — no intermediary needed. They were popularised by Ethereum and are the foundation of DeFi, NFTs, and most Web3 applications.
Once deployed, a smart contract's code is immutable (unless explicitly designed with upgrade patterns) and executes deterministically. All nodes on the network execute the same code and reach the same result, making outcomes trustless and transparent.
Smart contracts are vulnerable to bugs in the code (which can be exploited for millions of dollars), economic attacks, and unexpected interactions with other contracts. Audits by security firms reduce — but cannot eliminate — this risk.