It carries out actions automatically when certain conditions are met — with no need for intermediaries or manual intervention.

Think of it like:

“If X happens, then do Y.”

For example:

• If someone sends ETH to a contract, the contract can automatically release a token in return.

• If a deadline passes, funds can be returned to the sender.

Key benefits of smart contracts:

• Trustless: You don’t need to rely on people — just the code.

• Transparent: Anyone can audit the contract logic on-chain.

• Efficient: Cuts out third parties, delays, and extra costs.

Smart contracts power:

• DeFi platforms

• NFT marketplaces

• DAOs

• Gaming and virtual worlds

Ethereum pioneered smart contracts, but now many chains (Solana, Avalanche, BNB Chain, etc.) support them.

Tip: Smart contracts are only as secure as the code — bugs can lead to exploits. Always research before interacting with unfamiliar contracts.