4. Automated Smart Contract Settlements

Edma leverages smart contract automation to ensure secure, transparent, and efficient financial transactions in its DeFi ecosystem. By eliminating intermediaries and reducing manual errors, Edma’s automated settlement system streamlines payments, lending, liquidations, and collateral management.

Key Components of Automated Smart Contract Settlements

1. Loan Issuance & Collateral Management

• Users deposit CLE or EDM as collateral, which is locked in a smart contract.

• Loan terms (interest rate, repayment schedule, LTV ratio) are predefined in the contract.

• Borrowers receive instant access to liquidity in EDUSD or other stable assets.

• The smart contract continuously monitors collateral value and adjusts loan parameters if needed.

2. Automated Loan Repayments

• Borrowers make scheduled repayments directly to the smart contract.

• The contract automatically deducts interest and principal payments from the borrower’s wallet.

• Missed payments trigger penalty mechanisms, such as additional interest or collateral liquidation warnings.

3. Instant Token Transfers & Settlements

• Smart contracts facilitate direct token transfers between lenders, borrowers, and liquidity providers.

• Ensures real-time settlements of transactions on the blockchain, minimizing delays.

• Reduces transaction costs by eliminating third-party intermediaries.

4. Liquidation & Risk Management

• If collateral value falls below the liquidation threshold, the smart contract initiates liquidation.

• Liquidated assets are automatically sold on decentralized markets to repay outstanding debt.

• The system prevents over-leveraging and excessive risk by enforcing margin call conditions.

How Automated Settlements Work in Edma

1. User deposits CLE or EDM into a collateralized loan contract.

2. Smart contract locks the collateral and issues the loan in EDUSD or other stable assets.

3. Borrower makes repayments through automated deductions.

4. If repayment conditions are met, collateral is released back to the borrower.

5. If collateral falls below the liquidation threshold, the smart contract initiates liquidation, repaying the lender.

By integrating automated smart contract settlements, Edma ensures a secure, trustless, and efficient lending and transaction ecosystem, reducing costs and increasing financial accessibility in renewable energy markets.