The Role of Smart Contracts in DeFi
Smart contracts play a key role in DeFi (decentralized finance), enabling the automatic execution of agreements between participants without needing third-party trust.
Here’s how they work in DeFi:
🔵 Automation: Smart contracts automatically handle financial operations (e.g., loans, asset exchanges) when predefined conditions are met.
🔵 Transparency: All contract terms are available on the blockchain, ensuring openness and preventing fraud.
🔵 Security: They eliminate intermediaries, reducing risks and transaction costs.
Thus, smart contracts greatly enhance the security and efficiency of financial operations in DeFi.
