A smart contract is a self-executing contract with the terms of the agreement directly written into code. These contracts run on blockchain platforms, like Ethereum, and automatically execute and enforce themselves when predefined conditions are met. Smart contracts eliminate the need for intermediaries and bring transparency, security, and efficiency to various processes.

Key characteristics of smart contracts include:

1. **Code-Based:** Smart contracts are written in programming languages specifically designed for creating them, such as Solidity for Ethereum.

2. **Decentralized Execution:** They are executed on a decentralized blockchain network, meaning there is no central authority overseeing the contract's operation.

3. **Autonomy:** Smart contracts automatically execute when predefined conditions (often referred to as "if-then" conditions) are met, without the need for human intervention.

4. **Security:** Blockchain's inherent security features contribute to the immutability and tamper-resistant nature of smart contracts.

5. **Trustlessness:** Smart contracts operate in a trustless environment, meaning participants can transact with each other without relying on trust. The code enforces the terms of the contract.

Smart contracts have applications in various fields, including finance, supply chain management, real estate, and more. They play a significant role in the development of decentralized applications (DApps) and are a key component of the broader Web3 ecosystem.