What it means
A program that lives on a blockchain and runs exactly as written, holding and moving tokens by its own rules.
Lending markets and exchanges are smart contracts. Their code is public, and the larger ones are audited, but a bug can still put the money in them at risk.
How it works
Defied has no smart contracts of its own. Markets in the app are run by third-party protocols.
Related terms
| Term | What it means |
|---|---|
| DeFi | Decentralised finance: lending, borrowing and exchanging that runs on public smart contracts instead of through a bank. |
| Lending market | An onchain pool where people supply money that others borrow, with the interest paid by borrowers going to those who supplied it. |
| Vault | A smart contract that takes deposits and spreads them across lending markets by a set strategy. |
This glossary explains terms in general. It isn't investment, tax or legal advice.