Smart contracts are the engines behind DeFi, tokens and NFTs. Because they execute exactly as written and are difficult to change once deployed, a bug or exploit can be very costly.
Audits reduce that danger but never remove it entirely, so the code holding your funds is only as trustworthy as its track record.
DeFi Basics and Risks
Key takeaways
- A smart contract is code that runs automatically when its terms are met.
- Once deployed it is hard to change, so bugs can be permanent.
- Contracts power DeFi, NFTs and DAOs by removing the middleman.
Smart Contract — preguntas frecuentes
Is a smart contract legally binding?
Not automatically; it enforces rules in code, but whether it counts as a legal contract depends on your jurisdiction.
Can smart contracts fail?
Yes. The chain is secure, but flawed contract code has caused large losses, which is why audits matter.
This definition is educational and not financial advice. Crypto is volatile and high-risk — always do your own research.
Keep learning
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