Smart Contract

A smart contract is a computer program that runs automatically on a blockchain when the conditions defined in its code are met. In practice, it translates an agreement of the form “if X happens, then execute Y” into instructions the network can execute.

Smart contracts were popularised by Ethereum and underpin many decentralised applications, decentralised finance and NFTs. Once published, they operate autonomously and, generally, cannot be modified.

It is precisely this automatic nature that involves specific risks: an error or a vulnerability in the code can produce unintended effects that are difficult to reverse, with possible losses of the crypto-assets involved. For this reason, smart contract code is often audited, but these audits do not entirely eliminate the risks.

Disclaimer: This entry is for information purposes only and does not constitute investment advice, a recommendation or a solicitation to invest.

Correlated words

Liquid Staking

Liquid staking is a form of staking that issues a token representing the locked assets, which can be used while the assets remain locked.

TVL

Le TVL (Total Value Locked) est la valeur totale des crypto-actifs verrouillés dans un protocole de finance décentralisée à un instant donné.

Wrapped Token

A Wrapped Token represents the value of one crypto on a different blockchain standard, facilitating cross-chain transactions and usage.

Bonding

Bonding is the mechanism by which a protocol acquires liquidity or assets by offering its own tokens in exchange, often at a discount.

Staking Derivative

A staking derivative is a token representing staked crypto-assets and their rewards, which can be used while staking is active.

Yield Farming

Yield farming is the use of crypto-assets in DeFi protocols to obtain variable rewards, for example by providing liquidity.

Swap

Swap is the exchange of one crypto token for another via a decentralised platform, enabling seamless asset conversion.

Staking

Staking is the locking of crypto-assets to help secure a Proof-of-Stake blockchain, in exchange for variable, protocol-dependent rewards.

Crypto Lending

Crypto lending is the lending of crypto-assets to third parties in exchange for variable rewards that depend on the protocol.

ERC-20

ERC-20 is the technical standard that defines the common rules for fungible tokens created on the Ethereum blockchain (ERC-20 tokens).

DEX

A DEX is a decentralised exchange that allows crypto-assets to be swapped through smart contracts, without a central intermediary.

DeFi

DeFi (decentralised finance) is the set of financial services that operate through smart contracts, without central intermediaries.

DApp

A DApp is a decentralised application that runs on a blockchain via smart contracts, without relying on a central server.

DAO

A DAO is a decentralised autonomous organisation, managed through smart contracts and rules voted on by its participants.

CeFi

CeFi (Centralised Finance) refers to crypto-asset services provided by centralised operators acting as intermediaries between users.

Arbitrage

Arbitrage is a strategy that exploits price differences in the same asset across markets to capture a margin.

APY

APY (Annual Percentage Yield) is the annual percentage rate that takes into account the compounding of the amounts accrued.

APR

APR (Annual Percentage Rate) represents the annual percentage rate of an asset, calculated without taking compounding into account.

AMM

AMMs (Automated Market Makers) are smart contracts that facilitate the exchange of crypto-assets on decentralised exchanges (DEX).

Aggregator

An aggregator brings together services and data from multiple crypto-asset platforms, including DeFi protocols, into a single interface.