# AI-Enhanced Smart Contracts

Smart contracts traditionally execute predefined logic without adaptability, limiting their capacity to respond dynamically to changing conditions. Nexchain introduces an AI-enhanced smart contract framework that enables self-optimizing execution, anomaly detection, and automated compliance enforcement. These smart contracts refine their logic over time by analyzing historical transaction data, allowing them to improve efficiency and responsiveness.

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Fraud detection mechanisms embedded within smart contracts utilize machine learning models to analyze transaction patterns, mitigating the risk of exploitation and security breaches. Automated compliance ensures that smart contracts remain aligned with evolving regulatory requirements by continuously adjusting execution parameters. The decision-making process within these smart contracts follows a probability function:



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where P(D) represents the probability of executing decision, 𝛼 is a sensitivity parameter, and&#x20;

𝑥 denotes real-time contract state variables. This approach enables dynamic adjustments in smart contract execution, ensuring optimal performance under varying conditions.
