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June 14, 2026
The Dispatch

Definition

Smart Contract

A smart contract is self-executing code on a blockchain that automatically carries out agreed actions when conditions are met, without an intermediary. This is informational, not advice.

A smart contract is a program stored on a blockchain that runs exactly as written when triggered, for example releasing funds when a condition is satisfied. It underpins DeFi, NFTs and many crypto applications.

Because the code is automatic and often immutable once deployed, bugs or exploits cannot easily be reversed, and flawed contracts have led to major losses. 'Code is law' means there may be no human appeal if something goes wrong.

Smart contracts enable powerful automation but carry technical and security risks. This entry is informational only, not investment advice; interacting with smart contracts is high-risk.

Related terms

  • BlockchainA blockchain is a shared, append-only digital ledger where transactions are grouped into cryptographically linked blocks, making records hard to alter without consensus.
  • DeFiDecentralised Finance refers to financial services — lending, trading, yield — run by smart contracts on blockchains without traditional intermediaries. This is high-risk and informational, not advice.
  • Gas FeeA gas fee is the payment, in a blockchain's native token, that users pay to have their transaction processed and recorded by the network. This is informational.

Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.