🧾Smart contracts

Considered the cornerstone of the DeFi universe, understanding what a smart contract is is critical to navigating this new economy.

A smart contract is a piece of immutable code written in a specific programming language to be executed over and over again on a distributed network.

Access the REAU contract code here.

The smart contract, being an executable program, has pre-established functions, inputs and outputs that can be executed at any time on the network in which it is configured, without running the risk of mistaken interpretations and arbitrary entities centrals. The smart contract is nothing more than a set of instructions to be executed by machines.

The smart contract itself is not "smart" either. Like any code, it is made to exactly follow the instructions described in your programming. It is as smart as a self-service machine, one of those that we put in the money and it frees us the drink/snack we want.

One of the first publications about smart contract is dated 1994, written by Nick Szabo. The objective would be to use computational power to intermediate transactions, eliminating the need for a centralized agency in this operation.

In a way, the ability to transfer Bitcoin from one wallet to another can already be considered a simplified version of smart contracts. However, this term and this universe of possibilities became more popular with the launch of smart contracts on the Ethereum network.

After creating a smart contract on the network, it is possible to interact with it. This possibility opens up opportunities for creating various applications such as tokens, loans and farms. It is up to the server network to perform the functions of the smart contract and, to cover this cost, a fee we call "gas" is charged. This fee is paid directly to the network's validators/miners as a reward for the computational effort required to execute a piece of code. In the case of the BSC network, this fee is paid in the currency of the network itself (BNB).

The purchase and sale process by PancakeSwap, for example, uses a smart contract from the platform itself, which allows the conversion between currencies/tokens. The process of transferring tokens from one wallet to another uses a function within the REAU contract. Creating a token goes through a contract release and developer interaction with that contract to add liquidity and make it accessible to investors.

Currently, several networks support smart contracts, but not all of them use the same programming language to prepare their contracts. In the case of the Ethereum network, BSC, Polygon and KCC, all of them based on EVM (Ethereum Virtual Machine), the programming language called Solidity is used.

Although the smart contract guarantees greater security to different interpretations or external interference, it is always possible that there are problems in the code that open loopholes or make the contract not work as expected.

To address this distrust, there is an industry of auditing companies, responsible for charging fees (sometimes exorbitant) to read and run tests on network contracts. The result of the audit seeks to point out possible problems of logic or bad faith in making a smart contract.

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