A token smart contract is a piece of software code that runs on a blockchain and governs the functionality of a token. It consists of a set of rules and conditions that determine how the token can be created, transferred, stored, and destroyed. 

Token smart contracts automate processes related to tokens and establish rules for their use. A token smart contract defines functions and methods that govern the behavior of the token, such as transferring the token between participants, checking balances, and executing other operations.