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Oxidation is any chemical reaction that involves the moving of electrons. Specifically, it means the substance that gives away electrons is oxidized.

When iron reacts with oxygen it forms a chemical called rust because it has been oxidized (the iron has lost some electrons) and the oxygen has been reduced (the oxygen has gained some electrons).

Formula of rusting is: 4Fe + 3O2 → 2Fe2O3xH2O→Fe2O3.x H2O