What is Smart contract?
A program stored on a blockchain that executes automatically when its conditions are met. The building block of DeFi, NFTs and most of crypto beyond simple payments.
A smart contract is a program stored on a blockchain that executes automatically when its conditions are met — a vending machine rather than a shopkeeper: insert input, receive output, no discretion in between. It's the invention (popularised by Ethereum) that turned blockchains from payment ledgers into platforms: DeFi, NFTs, stablecoins and DEXs are all smart contracts.
The strength and the hazard are the same sentence: code executes exactly as written, including the bugs. There's no manager to call when a contract does something its authors didn't intend but its code permits — crypto's biggest hacks are mostly this. Hence the ecosystem's audit culture, and the user-level rule: a contract's age, audit history and value-secured-over-time are the closest thing to a track record. "Trustless" means you're not trusting a person; you're trusting their code.
See it in practice
Related terms: Ethereum · DeFi · DEX (decentralised exchange) · full glossary
FAQ
Are smart contracts legally binding contracts?
Not inherently — the name is a metaphor. They're self-executing code; whether a legal agreement also exists around them is a separate, jurisdiction-specific question. The code enforces itself regardless of what a court would say.
What does "audited" actually guarantee?
That professional reviewers examined the code and reported what they found — a meaningful filter, not a warranty. Audited protocols have still been exploited; unaudited ones are simply asking you to be the auditor.
General information only, not financial advice. Definitions are maintained in our fact database and reviewed with the daily rebuild.