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What Is the Purpose of a Contract Factory in DeFi?

A factory deploys standardized instances of other contracts, enabling permissionless creation of new, secure markets or assets from a single template.
Greeks.Live06.11.25

What Is the Purpose of a Contract Factory in DeFi?

A contract factory is a smart contract designed to deploy other smart contracts. In DeFi, it is used to create standardized instances of protocols, such as new token pairs on a DEX or new loan vaults.

This allows for permissionless creation of new assets or markets, ensuring that every new contract instance adheres to the same, verified, and secure template logic.

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