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Fixed-term/Fixed-rate Borrowing/Lending

AI-driven self-custodial neobank. DeFi fixed-term/fixed-interest loans for the borrowers. Personal fixed income funds for the lenders. Fixed rate leveraged Lido staking for investors.

SmartCredit.io is an AI-driven self-custodial neobank. SmartCredit.io has 20'000 registered users.

Platform offers:

SmartCredit.io focus is on offering self-custodial solutions which are regulatory compliant. See more in the Regulations.

SmartCredit.io does not have bank-run risks like Aave, Compound, or other money-market-based lending systems.

The Vision of SmartCredit.io is to offer all the financial services that traditional banks offer. However, self-custodial.

General borrowing/lending flow

Borrowers and lenders keep their assets in self-custodial wallets. The platform has no access to the borrowers’ and lenders’ assets—only users can access their crypto assets.

The general flow is following:

  • Borrowers define their loan requests with Credit Lines.

  • Lenders define their personal Fixed-Income Funds.

  • The platform uses AI-driven predictive Crypto Fraud Score to do Continuous Transaction Monitoring

  • The platform uses AI-driven Crypto Trust Score for the borrowers

  • SmartCredit.io does the matching between the borrowers’ and lenders’ requests.

Credit Lines and Fixed Income Funds

Lenders define their personal DeFi Fixed-Income Funds in SmartCredit.io. They define what kind of loans they want to invest in and describe their investment rules. Every lender can choose if they prefer short-term lending strategies (with less interest) or long-term lending strategies (with more interest). Every lender can define how much of their portfolio to invest in the shorter-term and/or longer-term.

Borrowers define their collateralized loan requests within the Credit Lines. The concrete collateral ratio depends on the volatility of the collateral asset, the loan term, and the trust score of the borrower. The interest rate curves are predefined. The concrete interest rate depends on the underlying asset, the loan term, and the trust score.

SmartCredit.io does, in the background, automated matching of borrowers’ loan requests with lenders’ fixed-income funds.

Fixed-term and fixed-interest-rate

Most DeFi borrowing/lending platforms offer variable-rate, variable-term loans for borrowers. SmartCredit.io focuses on the real economy, offering borrowers fixed interest rates and loan terms.

Why do we need a fixed interest rate for the borrowers?

  • Because the actual economy works based on predictability. It’s about knowing the costs of capital in advance. Or it’s about knowing the value of your liabilities.

Why do we need a fixed term for the borrowers?

Efficient use of collateral and Positions Monitoring System

SmartCredit.io has a Positions Monitoring System - borrowers can order telegram notifications if the liquidation probability increases. This automated feature is available for any user.

Position Monitoring System enables efficient use of collateral.

Liquidations

SmartCredit.io monitors the loan, and if the borrower does not pay or the borrower’s collateral value sinks too much, the loan is liquidated. The borrower's collateral assets in the smart contracts are protected with the oracles - the liquidation process starts only after the oracle confirms the liquidation.

SmartCredit.io never earns on liquidations—what remains from the liquidation is transferred back to the borrower. This is one of the key differences from our competitors (Aave, Compound, and Maker). Our competitors earn revenue while liquidating the under-collateralized borrower because the collateral is sold at a discount. The remainder of the collateral value becomes the profit of liquidator bots. Most of these bots are hosted by the respective platforms, and liquidation revenues transfer into the platform revenues; in some months, even 50% of the respective platforms’ revenues.

If the collateral does not cover the borrower's obligations, the Loss-Provision Fund will pay the gap to the lender.

No bank run risk like in Aave or Compound

Most of DeFi platforms have bank run risk. Why? It's because their maturities are not matched. SmartCredit.io is the opposite - it matches the borrower/lender maturities. It's like a traditional bank, but noncustodial - without the bank run risks.

Regulations

And from a regulations point of view:

  • SmartCredit.io is not pooling client assets; it's pure peer-to-peer play. Therefore, it does not need to register as a security.

  • Our competitors have implemented the peer-to-pool-to-peer business models; they have to register as a security (and they will probably never get this registration).

  • SmartCredit.io has implemented Transactions Monitoring as mandated for all Virtual Asset Service Providers

Tutorial videos:

Further info

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