S4B Crypto Contest - Season 19

Greetings everyone,
It's another day of the week and it's a pleasure on my part to share my entry in this week's contest which is titled smart contract. It is an amazing contest organized by our friend @waqarahmadshah. I would love to share my insight on the said contest.

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What is a smart contract?

The term smart contract in a layman's understanding can be seen as a program that is designed to self-execute itself without interference from a third party. It is a program that has been designed in a way that carries out functions such as automate, enforce, verify, and execute.

This program has been designed in a blockchain format such that it is decentralized, it is autonomous and it is also transparent. More also Moreovertract icontractsentralized they are also immutable.

Now, when there is a transaction to execute, the person with the transaction only sents it and the smart contract does all the checking and then verifies the transaction before it executes it.

Take the trading going on in the exchange platforms as an example. When you place an order, you will notice that a buyer or seller you may have not seen before will immediately come up, and then you will transact without seeing each other there meaning that you will have to build trust despite not seeing the person.

What is the role of smart contracts in decentralized finance (DeFi)?

The role of the smart contract in decentralized finance can never be overemphasized. As stated earlier, smart contracts enable transactions to be executed and verified without the interference of a third party.

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The major roles of smart contracts in DeFi as stated above include automating, enforcing, verifying, and executing. Every smart contract is designed to ensure that these 4 things are carried out seamlessly.

Since it doesn't require a third party to prompt it to function, it functions automatically once a need arises also, it checks to ensure that all the rules are met and it verifies and then finally executes the transaction without anyone interfering.

What security measures are essential for smart contracts?

The major security measures that are essential for smart contracts include auditing and testing the code numerous times before any other thing. This means that anyone who wants to activate the smart contract must ensure he or she audit the code and also test it on several occasions to ensure that it is working perfectly.

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Another major way to enhance security is to ensure that the code is well protected so that attackers won't have access to it easily. This means that code can be made more robust or obfuscation.

Also the code should be designed to identify vulnerability when they come or attack when they are spotted. This way, it is easier to protect the smart contract.

I want to invite @josepha, @dove11 and @suboohi to join the contest.