Blockchain technology is a broad, complex and multi-faceted term that underpins the cryptocurrency industry. One of the key components of several leading blockchain projects is smart contracts, which offers users and developers a way to automate a series of procceses and functions.
Smart contracts are programs on the blockchain that function when predetermined conditions are met. Notable smart contract platforms include Ethereum, Cardano, Polkadot and IOTA, all of which have a shared goal of ensuring transactions and functions are processed rapidly, without the need of an intermediary.
The motive behind smart contracts was to create an automated workflow that triggers the subsequent action without needing manual intervention or human interaction. This creates an element of trust between two parties, as the resulting function is always predetermined.
Smart contracts were first discussed in 1994 by controversial cypher-punk Nick Szabo, who also was rumoured to be the person behind the Satoshi Nakamoto pseudonym.
Users can stake ETH or erc-20 tokens into these smart contracts in order to earn a yield. Yields are generated through an automated process that invovles lending tokens out to other parties who wish to take out leverage on their crypto holdings.
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