USD.AI, a new protocol built by Permian Labs, is merging decentralized finance (DeFi) with artificial intelligence (AI) infrastructure funding. The project introduces a stablecoin-based lending system where NVIDIA and other GPU hardware serve as collateral for on-chain loans. Its two key tokens—USDai and its yield-bearing counterpart, sUSDai—are backed by physical hardware secured in data centers. This initiative brings together crypto liquidity, real-world asset (RWA) financing, and AI compute demand in an innovative way.
How the USD.AI Model Works
At its core, USD.AI treats high-value GPUs used for AI model training and inference as collateral. Borrowers—usually AI infrastructure operators—place GPU racks in insured data centers. These assets are then tokenized through a system called CALIBER, which converts them into non-fungible tokens (NFTs) representing ownership claims and future cash flows.
Lenders deposit stablecoins into the protocol to fund these loans. In return, they receive sUSDai, a yield-generating token that pays returns from borrower interest and repayments. The advertised annual yields range between 13% and 17%, significantly higher than traditional savings products.
Loan approvals are also much faster than those from traditional banks. According to USD.AI, its protocol can process approvals in under a week—reducing waiting times by more than 90%.
Funding, Risks, and Market Context
USD.AI recently closed a $13 million Series A round led by Framework Ventures, with participation from Dragonfly Capital, the Arbitrum Foundation, and others. This funding aims to strengthen the project’s liquidity and expand its reach into the AI infrastructure market.
However, the model isn’t without risks. GPU hardware depreciates quickly, AI demand can fluctuate, and liquidating physical assets is more complex than selling tokens. To manage liquidity, USD.AI employs a mechanism called “queue extractable value” (QEV), designed to balance withdrawal requests and protect lenders from sudden liquidity shocks.
Why It Matters for DeFi and AI
The timing for USD.AI’s launch aligns with a surge in demand for AI compute capacity. Traditional lenders often avoid financing these assets due to uncertainty around their valuation and resale potential. By tokenizing hardware and integrating it into DeFi, USD.AI provides a bridge between digital capital markets and physical infrastructure.
From a DeFi standpoint, this marks a growing trend in real-world asset (RWA) integration. While other protocols focus on tokenized real estate or bonds, USD.AI’s emphasis on compute hardware introduces a fresh category of yield-bearing collateral.
If the model succeeds—maintaining GPU demand, stable valuations, and sustainable yields—it could pave the way for a new class of AI-focused financial products. Still, its long-term viability will depend on execution, regulatory clarity, and how effectively it manages depreciation and liquidation risks.
