> ## Documentation Index
> Fetch the complete documentation index at: https://docs.theblockchainlibrary.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Factory Contract

> A smart contract designed to deploy or create other contracts using standardized logic.

# Factory Contract

A smart contract designed to deploy or create other contracts using standardized logic.

## Definition

A smart contract designed to deploy or create other contracts using standardized logic.

## Why it matters

Smart-contract concepts are essential for understanding programmable blockchain applications.

## How it works

The factory contract contains a 'create' or 'create2' function. When invoked, it reads the bytecode of a template contract and uses it to deploy a new address on the blockchain. The factory can keep a record (an array or mapping) of all addresses it has deployed for easy lookup.

## Real-world example

Uniswap v2 uses a Factory contract to deploy a unique Pair contract for every single token liquidity pool that is created on the platform.

## Advantages

* Standardizes deployment of related contracts
* Easily manages and lists created instances
* Reduces individual deployment complexity

## Limitations

* Increases gas cost for the factory call
* Requires careful management of factory security
* Logic changes require new template contracts

## Common misconceptions

* People think the factory contract acts as a hub for all child data, but child contracts are independent.
* Some believe creating contracts via a factory is free, but it still costs substantial gas for the creation operation.

## Related knowledge

* [ABI](/generated/v2/glossary/abi) — term
* [Smart Contract](/generated/v2/glossary/smart-contract) — term
* [Solidity](/generated/v2/resources/solidity) — term

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**Canonical knowledge ID:** `glossary:factory-contract`