Smart Contract
Basics
What it means
A self-executing computer program stored on a blockchain. Smart contracts automatically enforce the terms of an agreement when predetermined conditions are met, without requiring intermediaries.
Example
A DeFi lending protocol uses smart contracts to automatically distribute interest to lenders and manage collateral, with no human intervention required.
Mistake beginners make
Beginners assume smart contracts are always secure. Bugs or vulnerabilities in smart contract code can be exploited by hackers, often resulting in irreversible loss of funds.
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