A smart contract is a self-executing program that runs on a blockchain. It automatically enforces the rules and outcomes encoded in its code, without requiring a central authority or manual intervention. Once deployed, a smart contract’s behavior is generally transparent and predictable, because anyone can inspect its code and its state on-chain.
On networks like Ethereum, smart contracts can hold and transfer value, manage NFTs and other tokens, and power decentralized applications (dApps) such as decentralized exchanges, lending protocols, NFT marketplaces, and DAO governance systems. In the NFT ecosystem specifically, smart contracts handle the minting process, define token metadata and ownership rules, and automate many of the payment and blockchain transaction aspects of minting and trading NFTs.
