Nanoparticles, such as fullerenes, carbon nanotubes, and metal oxides, are added to lubricants to form nanofluids. These nanoparticles create a thin, protective film on surfaces, filling in microscopic irregularities and reducing direct metal-to-metal contact. This results in lower friction and wear. Additionally, nanoparticles can improve thermal conductivity, helping to dissipate heat more efficiently.