Self-executing

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The term self-executing refers to code or agreements that automatically carry out their terms and conditions once predefined criteria are met. These agreements operate without the need for manual intervention or reliance on a central authority or intermediary to enforce them. The logic of the agreement is written directly into lines of code, which are then typically deployed on a decentralized network like a blockchain.

When the conditions specified in the code are triggered by an event – such as a payment being made, a deadline passing, or data being received from an external source (oracle) – the contract automatically executes the actions programmed within it. For instance, a self-executing smart contract for an insurance policy might automatically release a payout to a farmer if a trusted weather data feed reports a drought. This automation can lead to increased efficiency, reduced counterparty risk, and greater transparency, as the execution process is deterministic and often publicly verifiable on the blockchain. The concept is foundational to building decentralized applications and automating complex processes.

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