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Smart contract
How agreements execute

Smart contract

A set of rules written directly into a blockchain that execute automatically when predefined conditions are met. If X happens, then Y follows without anyone needing to trigger it manually or trust the other party to follow through.

TradFi equivalent
In traditional finance...
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TradFi equivalent
An ISDA Master Agreement. Standard terms agreed in advance between two counterparties. A lawyer drafts it. A court enforces it. A smart contract replaces the enforcement mechanism - the code executes automatically when conditions are met.
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Analogy
In everyday terms...
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Analogy
A vending machine. Insert money, select item, receive product. If the steps happen, the terms are automatically met. The agreement and the execution are the same object.
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