TECHNICAL CONCEPTS
Smart Contract
Definition
A smart contract is a self-executing contract with terms directly written into code. In DeFi, smart contracts automatically execute transactions when predetermined conditions are met, eliminating the need for intermediaries.
Example
Example
A lending protocol's smart contract automatically liquidates undercollateralized positions without human intervention.
Risks to Consider
Risks
- Code vulnerabilities
- Audit failures
- Immutability risks
Common Questions
Can smart contracts be changed after deployment?
Most smart contracts are immutable once deployed, though some include upgrade mechanisms controlled by governance or admin keys.
