Smart Contract
Self-executing programs stored on a blockchain that automatically enforce the terms of an agreement when predetermined conditions are met. Smart contracts enable trustless transactions without intermediaries because the code, once deployed, executes exactly as written and cannot be altered (unless specifically designed to be upgradeable). They form the foundation of DeFi, NFTs, DAOs, and virtually all dApps.
“An escrow smart contract can automatically release payment to a seller once delivery is confirmed by an oracle, without either party needing to trust the other or a middleman.”
Ethereum (ETH)
The second-largest cryptocurrency and the most widely used smart contract platform, created by Vitalik Buterin and launched in 2015. Ethereum introduced programmable blockchain functionality, enabling the creation of tokens, DeFi protocols, NFTs, and dApps. In September 2022, Ethereum transitioned from Proof of Work to Proof of Stake ('The Merge'), reducing energy consumption by over 99%.
dApp (Decentralized Application)
An application that runs on a decentralized blockchain network rather than being hosted on centralized servers. dApps use smart contracts for their backend logic while providing user-friendly front-end interfaces. They are censorship-resistant and typically open-source, though their performance depends on the underlying blockchain's capabilities.
DeFi (Decentralized Finance)
An ecosystem of financial services built on blockchain networks that operate without traditional intermediaries like banks, brokerages, or insurance companies. DeFi uses smart contracts to provide lending, borrowing, trading, insurance, derivatives, and yield generation in a permissionless, transparent, and composable manner. Anyone with a wallet can participate.
Smart Contract Audit
A comprehensive security review of a smart contract's source code performed by specialized firms to identify vulnerabilities, bugs, logical errors, and potential attack vectors before or after deployment. Audits examine code quality, access controls, economic assumptions, and edge cases. While audits significantly reduce risk, they are not a guarantee of safety — exploits have occurred even in audited contracts.