What Is a “Smart Contract” and How Does It Facilitate Derivatives?
A smart contract is a self-executing contract with the terms of the agreement directly written into code on a blockchain. It facilitates derivatives by automatically enforcing the contract's logic, such as margin calls, liquidation, and settlement, without the need for human intermediaries.
This ensures transparent, deterministic, and trustless execution of the derivative's terms.
Glossar
Derivatives
Instrument ⎊ Derivatives are financial instruments whose value is intrinsically linked to, or "derived" from, an underlying asset, benchmark, or rate.
Smart Contract
Code ⎊ The contract is fundamentally self-executing code deployed on a distributed ledger, embodying the terms of the agreement in an immutable format.