What are smart contracts?
A smart contract is a program stored on a blockchain that runs automatically when its conditions are met, without a middleman. It's how many apps and tokens operate.
How they work
A smart contract holds rules as code. When you interact with it — say, swapping tokens — it executes those rules exactly and records the result on the blockchain.
Approvals
Using a contract often means granting it permission (an approval) to handle a certain token from your wallet. Broad or unlimited approvals are worth reviewing, since they can be abused.
Smart contracts power most of what people call DeFi and dApps — and approvals are a common attack surface, so understanding them protects you.
Think of a vending machine: put in the right input, and it automatically gives the defined output, with no clerk involved. A smart contract is that logic, on a blockchain.
- Bugs or malicious code in a contract can cause loss.
- Overly broad approvals can let a contract drain tokens — review and revoke when unsure.
- 'Audited' does not guarantee safety.
See the ecosystem map
Related questions
Last reviewed 2026-06-25. This topic can change over time; always confirm current specifics from primary sources.