I think the point is that smart contracts allow a handful of things to happen automatically, while real-world contracts are literally just words on paper that h

I think the point is that smart contracts allow a handful of things to happen automatically, while real-world contracts are literally just words on paper that have no functional capability of effecting anything in reality. People interpret those words with the understanding that they can invoke a court of law to borrow the state’s monopoly on force and compel behavior in accordance with the contract, but it’s still humans reading the words and then actually doing the actions of their own will. In any case, it’s not hard to imagine an evolution in our legal regime where tokens can gain the force of legal contracts. And then tokens will do everything that paper contracts will do, which is to say nothing except declare the terms of some mutual agreement between some meatspace entities. (obviously this only makes sense for fungible contracts)