> For the complete documentation index, see [llms.txt](https://liquidx-3.gitbook.io/liquidx-whitepaper/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://liquidx-3.gitbook.io/liquidx-whitepaper/2.-fundamentals/2.4-what-is-a-smart-contract.md).

# 2.4  What is a Smart Contract?

<figure><img src="/files/6ZeWN8zVVduBZxPWjli3" alt=""><figcaption></figcaption></figure>

A smart contract is a computer program stored on a blockchain that automatically executes when specific conditions are met - with no human intervention required. Think of it as a vending machine for financial services: you put in your money, the rules are pre-set and publicly visible, and the output happens automatically and exactly as programmed.

Smart contracts are the foundation of LiquidX. Every lending transaction, every yield payment, every token release, and every governance vote is executed by smart contracts - not by people. This eliminates the risk of human error, corruption, or manipulation.

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