DeFi Smart Contracts

DeFi smart contracts are self-executing programs on a blockchain that automate financial agreements, such as lending, borrowing, and trading derivatives. They define the rules for margin, liquidation, and collateral management without the need for a central intermediary.

The security of these contracts is paramount, as any vulnerability could lead to catastrophic loss of funds. Developers must rigorously audit these contracts to prevent exploits that could bypass liquidation mechanisms.

They are the backbone of modern decentralized financial architecture.