How it works
Smart Lending AI (SLAI) is a decentralized lending platform that allows users to borrow ETH against their token holdings — without selling them. This is especially useful for active traders who want to maintain exposure to altcoins or memecoins while accessing ETH for further trades, mints, or gas fees.
Below is a comprehensive breakdown of the SLAI process, including examples and risk handling.
🔁 Step-by-Step Process
1. User Locks an Approved Token
The user selects a supported ERC-20 token that has been approved by oscAI (our AI-based token vetting partner). They then lock a certain amount of that token into the SLAI smart contract.
Example: Alice holds 10,000 $XYZ tokens, currently worth $0.10 each = $1,000 total.
She wants to keep $XYZ for potential upside, but needs ETH to trade.
2. On-Chain Price Calculation
SLAI calculates the token’s value directly from its WETH liquidity pair on-chain (e.g., via Uniswap pool). This provides a reliable, real-time price without relying on external oracles.
No centralized feeds
Resistant to manipulation
Always up-to-date
Example Calculation: The WETH/$XYZ pool indicates 1 WETH = 10,000 $XYZ → Therefore, 1 $XYZ = 0.0001 WETH → 10,000 $XYZ = 1 WETH = ~$4,000 (example ETH price)
3. Volatility & Liquidity Check
SLAI performs risk scoring:
If the token is highly volatile, max borrowing may be 20–30%.
If the token is stable and liquid, borrowing may go up to 50%.
Result: Alice’s $XYZ passes the check with moderate volatility and good liquidity. SLAI allows her to borrow 25% of her token’s value.
4. ETH Loan Issued
ETH is sent to the user instantly, fully on-chain.
Example: Alice receives 0.25 WETH (25% of her $1,000 token value).
She can now use that ETH for:
Sniping new tokens
Paying gas fees
Yield farming
5. Repayment
To unlock her tokens, Alice must repay:
The borrowed ETH
5% interest (or 0% if she is staking 50,000+ SLAI tokens)
Repayment Example: If she borrowed 0.25 ETH, she must repay 0.2625 ETH. If staked, she repays only 0.25 ETH.
6. Automatic Liquidation (if needed)
If the token value drops by 40% or more, SLAI triggers liquidation:
The token is sold for ETH
The protocol recovers the outstanding loan
Excess ETH is retained in the protocol
This ensures system-wide solvency and discourages over-risky positions.
🧠 Why It Works
Fully on-chain — no trust required
Instant liquidity for fast DeFi decisions
Protects upside while freeing up ETH
Eliminates need to sell tokens just to keep trading
🛠 Smart Contract Involvement
CollateralVault: stores locked tokensLendingEngine: calculates value, disburses ETHLiquidationModule: monitors for price dropsoscAIAdapter: filters which tokens are allowed
🔁 Quick Recap Example
You lock $PEPE worth $2,000
SLAI gives you $500 in ETH
You repay $525 (or just $500 if staked)
You get your $PEPE back
You kept your bag, stayed liquid, and didn’t miss the next trade.
Smart Lending AI makes this simple, secure, and optimized for every serious DeFi trader.
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