A smart contract is a self-executing contract with the terms of the agreement directly written into code. It automatically enforces and executes actions when predefined conditions are met, without the need for intermediaries. Smart contracts are deployed on blockchain platforms like Ethereum, ensuring transparency, security, and immutability.
In the cryptocurrency world, smart contracts enable a wide range of decentralized applications (dApps), including decentralized finance (DeFi), token issuance, and automated trading. They can facilitate complex transactions, such as lending, borrowing, and exchanging assets, all governed by code rather than traditional legal agreements.