Smart-Contracts

Definition ∞ Smart contracts are self-executing contracts with the terms of the agreement directly written into code. They automatically execute predefined actions when specific conditions are met, operating on a blockchain. This enables automated, trustless transactions and the creation of decentralized applications.
Context ∞ The functionality and security of smart contracts are central to the operation of decentralized finance (DeFi) protocols and non-fungible tokens (NFTs). News coverage often addresses the development of new smart contract languages, audits to identify vulnerabilities, and the legal implications of code-based agreements. Debates persist regarding their enforceability and the potential for exploits that could impact digital asset holdings.