Smart Contract Vaults

Definition ∞ Smart contract vaults are decentralized applications implemented as smart contracts on a blockchain, specifically designed to securely hold and manage digital assets according to predefined, immutable rules. These vaults automate asset custody, distribution, and access controls, removing the need for third-party intermediaries. They provide a transparent and auditable mechanism for asset control. These systems execute logic autonomously.
Context ∞ Smart contract vaults are a core component of many decentralized finance protocols, serving as secure repositories for collateral, liquidity, or governance tokens. The security of these vaults is paramount, as any vulnerability or exploit can lead to significant asset loss, making their rigorous audits and continuous monitoring critical topics in blockchain security news. Their integrity is foundational to user trust in DeFi.