In blockchain ecosystems, smart contracts signify self-executing contracts with the agreement directly written into code. This technology automates contract execution when predetermined conditions are met, removing the need for intermediaries. Smart contracts enhance trust and transparency in transactions by ensuring that obligations are fulfilled without the possibility of manipulation. They are essential for applications in various industries, such as finance and supply chain, where automated, verifiable agreements are critical. By streamlining processes and minimizing disputes, smart contracts significantly improve transactional efficiency.