A Backup Contract is a type of smart contract designed to serve as a fallback in case the primary contract fails or becomes non-functional. It acts as a safety net, ensuring that essential operations can continue without interruption.

These contracts are crucial in decentralized applications where reliability is key. If the primary contract encounters issues like bugs or vulnerabilities, the Backup Contract can step in to execute predetermined actions or conditions. For example, in a decentralized finance (DeFi) project, a Backup Contract might manage funds if the main contract is compromised.

It ensures the protection of users’ assets and helps maintain trust in the platform. Users typically rely on Backup Contracts to safeguard their investments, providing an additional layer of security. This approach is particularly important in a space where smart contract exploits can lead to significant losses.