# Smart Contracts: How Agreements Execute Automatically Without a Third Party

## What is a smart contract?

A smart contract is a program written on the blockchain that holds terms agreed upon in advance by all parties, and executes them automatically the moment those terms are met - with no need for any later human intervention. Instead of writing an agreement on paper and trusting the parties' goodwill or a third party's oversight to enforce it, the agreement itself becomes self-executing code.

## How does it enforce the agreement without a third party?

The code itself is the final arbiter: once the agreed condition is met, the linked action executes automatically and instantly on the network - no lawyer to draft the contract, no notary to certify it, no intermediary bank to move the funds. The decentralized network itself guarantees execution.

## Immutability and irreversibility

Once deployed on the blockchain, no party - not even the contract's creator in many cases - can unilaterally change its terms or walk away from them. This immutability is precisely what prevents betrayal or manipulation of an agreement after it's been struck, giving the weaker party a protection traditional paper contracts rarely offer.

## Auditable transparency

Smart contract code is often open-source, so anyone can read it and verify the fairness of its terms and the soundness of its logic before deciding to engage with it. This is a fundamental departure from traditional contracts, which are often written in dense legal language that non-specialists struggle to parse.

## Qist's approach

At Qist, the smart Murabaha contract handles asset delivery, sets the installment schedule, and distributes the agreed profit automatically according to clear terms known to both parties in advance - with no interest-charging intermediary involved. Adherence to Shariah principles is embedded in the contract's own logic, not just a verbal promise.

## By the numbers

Global Islamic finance is approaching $4 trillion in assets, serving roughly 1.9 billion Muslims worldwide who seek Shariah-compliant alternatives. Qist's smart contracts charge only a 2% fee, with a 3-day grace period before any action is taken on a late payment, and every deployed contract can be verified directly on the Base network's explorer (BaseScan) - no need to trust any intermediary.