How Smart Contracts Work in Web3
Smart contracts stand as the essential infrastructure of Web3 for providing automated, secure, and trustless interaction on blockchain networks. Automatic execution agreements function according to pre-conditions defined and coded in the blockchain, thus eliminating the need for intermediaries.
A smart contract is a digital "if-then" statement. For example, in a transaction, if a buyer pays the contract, the asset automatically becomes the property of the buyer. These agreements are immutable and transparent; therefore, all participants can verify the conditions and results.
To develop contracts, such contracts must first be coded by some developer. In this case, the coding of the contract is deployed to a platform called a blockchain. Once it enters the active stage, smart contracts observe the events triggering their existence such as payments or user inputs and start action execution. Hence, it ensures that a smart contract does not represent a single person's manipulation or alteration.
They have a very broad range of applications throughout Web3. They are there in decentralized finance markets and work as a base for providing lending, borrowing, and trading without banks. In gaming, they allow safe transfers of NFTs and assets within the game. They will also be very important in Decentralized Autonomous Organizations (DAOs) for automating the governance decision processes.
Thus, without entering unnecessary contracts, offering transparency, security, and efficiency, smart contracts dissolve barriers of trust and enable innovation, thereby making them the cornerstone of Web3's decentralized, user-centric ecosystem.
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VEIGO (Community Mod)
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