What is a Smart Contract?
A smart contract is a program stored on a blockchain that automatically executes when predetermined conditions are met. They power all DeFi applications.
How They Work
Smart contracts are immutable once deployed. They can hold funds, execute trades, and interact with other contracts without intermediaries.
Smart Contract Risks
- Bugs can lead to fund loss
- Immutability means bugs can't be easily fixed
- Audits reduce but don't eliminate risk