What is Smart Contract?

A smart contract is a self-executing program stored on a blockchain that performs actions automatically when predefined conditions are met. It enforces agreements through code instead of legal intermediaries.

How does Smart Contract work?

A developer writes contract logic in Solidity or Vyper and compiles it to EVM bytecode.
The bytecode is deployed to the blockchain at a permanent address.
When a user calls a function, the EVM executes the code exactly as written.
All execution is deterministic the same inputs always produce the same outputs on every node.

Why does Smart Contract matter?

Smart contracts are the foundation of DeFi, NFTs, and DAOs enabling trustless financial systems and automated governance without a central authority.

Key features of Smart Contract

Immutable once deployed unless designed to be upgradeable
Transparent anyone can audit the code
Deterministic no ambiguity in execution
Composable contracts can call other contracts
Trustless rules enforced by code, not humans

Examples of Smart Contract

Uniswap's AMM logic executes token swaps automatically according to its mathematical formula. Aave's lending contracts manage collateralization and liquidations without a single employee involved.