A Factory Smart Contract is an on-chain smart contract that is able to spawn other new smart contracts.

In the context of DeFi, a factory smart contract is often used to create new instances of a particular DeFi protocol or application. For example, a lending protocol might use a factory smart contract to create new loan contracts for individual borrowers.

Overall, factory smart contracts are a useful tool for managing and deploying DeFi protocols and applications. They allow for the efficient and automated creation of new contracts, reducing the need for manual intervention and helping to ensure that DeFi protocols can be easily scaled and used by a large number of users.

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