Smart Contracts - The basis of every DeFi System
A smart contract in the formal and traditional way in which we do not handle is a written document in which two or more people reach certain agreements and are subject to some rules of compliance in addition to that say what would happen if one of the parties does not comply with what is agreed therein, these contracts are under rules or laws that depend on each country or locality in which it is written.
In view of all this and that traditional contracts are subject to the interpretation of the parties may be more convenient to one or the other depending on the interpretation made in view of this. has been created what are the smart contracts that in short are contracts that are not written on paper in a form easily understandable to all but that is written in a programmatic language is basically a computer program that runs on a specific platform that provides the confidence of both parties.
Generally they involve a number of people for example: lawyers, registrars, and additionally legal procedures that what they do is to upload the c so that these are carried out.
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To provide a global, more viable and economical solution, smart contracts emerge in which no subjective point of view of any of the parties acts.
Basically a smart contract is:
"Smart contracts are simply programs stored on a blockchain that run when predetermined conditions are met. They typically are used to automate the execution of an agreement so that all participants can be immediately certain of the outcome, without any intermediary’s involvement or time loss. They can also automate a workflow, triggering the next action when conditions are met."Source
Since the code is written in a computer language that will allow certain actions to be executed or not if it meets the previously established conditions, these conditions that are written in programming language would basically be the clauses of the contract, but there is no one who is going to interpret them, simply if the conditions previously established by a programmer are met, it is executed, if they are not met they are not executed, it is that simple.
Smart contracts have three basic characteristics: first security, second transparency and third autonomy, that is why DeFi systems are a revolution not only technologically but from the financial point of view, since through the use of smart contracts in decentralized finance platforms it has been possible to eliminate intermediaries, leaving only a program to be executed according to what has been previously stipulated.
The use of these is clearly evidenced in a decentralized finance system such as WOX-DEFI in which everything works through smart contracts where they have been previously coded, it can be clearly seen in the case of the moment in which we make stake that depending on the amount we put in STAKE we will receive a specific profit without any intermediary, since it is processed automatically within that platform, the same happens with we add liquidity, it is the same process depending on the amount of liquidity that is added, there is a stipulated profit that we can obtain.
In this way, we can say that they are very reliable protocols, which have come to stay.
As always, if you have any questions, please feel free to contact us. We invite you to join our discord channel:
Official WOX FI discord channel
I have heard this phrase "smart contracts" many times.
But only now I really understood what we are talking about in relation to the blockchain.
Thanks for this info :)
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