What Exactly is a Smart Contract? First introduced in the Ethereum blockchain, smart contracts are a fundamental building block of Web3 and a vital part of the blockchain’s advanced capabilities. They form the foundation for decentralized applications and automated business transactions by creating a level playing field of trust, authority, and authenticity that is already proving to be a paradigm shift in many industries today.
Term 2: Lenders can deposit funds into a specific contract that other users can borrow from at predefined collateralization ratios, while the lender receives a claim to a portion of the interest rate payments. Term 3: Using these automated methods creates a fair and transparent method of lending that doesn't rely on a third party or central authority with a monopoly on terms and conditions.