What is a smart contract?
A smart contract is code deployed to a blockchain that runs exactly as programmed. Once deployed, it cannot be altered (unless the developer retained upgrade rights — a key security consideration). It holds funds, executes logic, and interacts with other contracts automatically.
How smart contracts work
When you deposit funds into a DeFi protocol, you're not sending money to a company — you're sending it to a smart contract address. The contract's code determines what happens next: how yield is calculated, when you can withdraw, and what fees are charged.
Why immutability matters
The best DeFi protocols renounce ownership of their smart contracts after deployment. This means no one — not even the original developers — can modify the contract. Your funds are governed by code alone, not by human decisions.
Smart contracts on BNB Smart Chain
BNB Smart Chain uses the Ethereum Virtual Machine (EVM), meaning smart contracts written in Solidity work identically on both chains. Every contract on BSC is publicly verifiable on BscScan.
Auditing smart contracts
Before trusting a DeFi protocol, check whether its smart contract has been independently audited. Auditors review the code for vulnerabilities like reentrancy attacks, integer overflows, and access control flaws.