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CODE IS LAW? Smart Contracts Explained (Ethereum, DeFi)�Smart contracts� is a term used to describe computer code that automatically executes all or parts of an agreement and is stored on a. Smart contracts are verified when a proof that they can be obtained by compiling a specific source code has been provided. We analyse the control-flow. A smart contract is a computer program or a transaction protocol that is intended to automatically execute, control or document events and actions according to the terms of a contract or an agreement.