xtreamly

By leveraging advanced AI forecasting and risk management, we automate and optimize DeFi strategies to deliver enhanced returns with controlled risk. By integrating DeFi services and crypto derivatives into intelligent, user-friendly packages, we simplify complex financial strategies and redefine risk-reward possibilities.In this hackathon, we present an AI-powered looped leverage vault built on the Aave lending protocol. This innovative vault boosts APY by 2x-5x and optimizes profit returns by up to 10x while virtually eliminating liquidation risk through dynamic, automated hedging policies.At its core, our AI models refine the policies which drive the smart contract to prevent impermanent loss for liquidity providers and protect against liquidation by strategically deleveraging long positions and applying intelligent hedging strategies.This approach ensures optimal positioning and a smarter, more secure, and profitable DeFi experience. ​​Key Innovations:

1. AI-Driven Optimization: Real-time AI forecasting adjusts leverage dynamically, boosting APY by 2x–5x and profits up to 10x while minimizing liquidation risks.
   Leverage Ratcheting: Adaptive "looped leverage" ensures safe Loan-to-Value (LTV) ratios and optimized returns.
   Volatility Prediction: AI predicts market volatility, protecting the vault and enhancing yield through adaptive strategies.

2. Zero Liquidation Risk—The AI Safeguard with predictive hedging, dynamic rebalancing, looped leverage adjustments adapting to market changes by switching between short and long strategies.

3. Looped Leverage for Explosive Yield Generation Dynamic leverage adjustments based on AI-driven market predictions.
   Continuously calibrates to maximize returns while optimizing for risk.
   Automatically manages leverage ratios to adapt to market volatility.
   Ensures optimal returns with no user intervention required

4. Convenience Yield—Effortless Passive Income: Simply deposit funds into the vault. Xtreamly’s AI handles all trading and risk management.

5. Exclusive AI-Enhanced Liquidity Pools Optimized Liquidity Provisioning: AI forecasts low-volatility periods to prevent impermanent loss.
   Maximizes returns with real-time looping strategy adjustments.
   Ensures efficient liquidity provisioning, even in volatile markets.

6. Gas Optimization via Arbitrum L2 Arbitrum L2 Integration: To ensure cost efficiency, Xtreamly’s vault operates on Arbitrum L2, which dramatically reduces gas fees for rebalancing and hedging activities. By reducing operational costs, we can pass the savings back to users in the form of higher returns, ensuring that the vault remains cost-effective even during periods of high transaction volume.

7. Xtreamly’s hackathon-ready platform combines AI-driven short/long strategies with looped leverage in a groundbreaking way. Our system automatically adjusts to market volatility, seamlessly shifting between strategies without user intervention. By forecasting high and low volatility, we prevent liquidation risks by dynamically deleveraging during high volatility and adjusting to low volatility to avoid impermanent loss. The AI continuously analyzes live data from sources like Binance and Uniswap V3, ensuring real-time, optimal decision-making for maximum profitability. This fusion of AI and DeFi offers a truly hands-off, high-efficiency investment experience.

8. Future Potential and Scalability Perpetual Swaps & More: While our current vault uses a mix of looped leverage and options trading for hedging, we are constantly exploring new ways to enhance our offerings. Our next goal is to integrate perpetual swaps and further expand our hedging capabilities through decentralized platforms like GMX and dYdX. This would offer more robust risk management tools and allow us to serve a broader range of users with even more complex financial needs. Scalability Across Markets: With the combination of AI, advanced machine learning, and decentralized finance strategies, Xtreamly is not limited to any single asset class or market. We’re poised to expand our offerings into multi-asset portfolios, allowing users to optimize across not only crypto but also traditional assets.

Xtreamly was built using a combination of AI models, blockchain infrastructure, and seamless integration of DeFi protocols.

1. AI-Driven Strategy Engine Technologies Used: Machine Learning Frameworks: xgboost regression models, sklearn Big data framework: Google Big Query, pyspark Development Environment: Google dataproc for data ingestion, model training and experimentation, Kedro framework Data Sources: Chainbase dataset (Uniswap v3 Pool Data), Binance price feeds How It Works: Training AI Models: AI models are trained to predict market volatility, price trends, and risk levels using historical data from DeFi platforms and centralized exchanges. The models incorporate ensemble learning to improve prediction accuracy by combining outputs from multiple algorithms. Forecast Integration: AI generates real-time predictions for volatility and market momentum, feeding directly into smart contracts via API endpoints deployed on AWS. Dynamic Policies: AI policies dynamically adjust leverage, execute hedging strategies, and toggle between long and short positions based on market conditions. Hacky Element: Built a volatility prediction API that works in real time, converting complex AI outputs into actionable strategies implemented within smart contracts. Volatility predictions are posted and stored on Flare Chain as a new data oracle. Our AI-driven policy leverages this oracle via a smart contract deployed on Flare to dynamically control vault positioning.

2. Smart Contract Design Technologies Used: Blockchain Platforms: Aave (on Polygon and Unichain), Uniswap v3 pool, Programming Language: Solidity Deployment Tools: Hardhat, Foundry, Chainbase RPC calls for fetching on-chain data How It Works: Vault Core: A Solidity-based vault contract manages user deposits, applies AI-driven leverage loops, and rebalances portfolios in real-time. Hedging strategies are executed using options directly tied to AI predictions. AI Integration: Smart contracts interact with the AI strategy engine via secure APIs, automating trade executions and leverage adjustments without user intervention. Hacky Element: Leveraged Uniswap v3 pool to implement dynamic liquidity provisioning using AI, a novel approach that adapts liquidity positions based on market conditions.

3. Infrastructure & Backend Technologies Used: Backend Frameworks: Python and Fast API for API endpoints Cloud Hosting: AWS, EKS, Kubernetes cluster How It Works: API Services: AI models are served as RESTful APIs hosted on AWS. These APIs provide volatility predictions, risk scores, and leverage recommendations to the blockchain layer. Data Synchronization: Data from Binance, Chainbase, and Uniswap V3 pools are fetched, cleaned, and processed in real time to ensure up-to-date inputs for AI predictions. Hacky Element: Created an automated pipeline that synchronizes data from multiple chains and centralized exchanges, allowing the AI model to react instantly to market changes.

4. Gas Optimization Technologies Used: Layer 2 Solutions: deploying smart contract on Unichain How It Works: Efficient Execution: Deploying the vault on Unichain and Polygon reduces gas fees by up to 90%, making looped leverage strategies cost-effective Unichain and Polygon ensures even lower costs for scaling to broader user bases.

5. Partner Technologies & Benefits Aave: Provided the backbone for looped leverage and liquidity provisioning. Uniswap v3: Enabled innovative liquidity management with customizable hooks. Push Protocol: AI-driven notifications to Notifying users for volatility changes Unichain: Polygon: Flare: Notable Hacky Innovations: Cross-Asset Risk Hedging: Combining stablecoins, options, and perpetual swaps for layered risk mitigation—an approach inspired by traditional finance hedging but adapted for DeFi.

Conclusion: Why It’s Special Xtreamly is not just another DeFi vault; it’s an intelligent, AI-powered ecosystem that brings cutting-edge financial strategies to the blockchain. By combining advanced AI with decentralized infrastructure, it redefines yield optimization, risk management, and user convenience—all while maintaining an innovative, hackathon-ready design.