How does the AI ​​narrative heating DEFI benefit from it?

Author: Transpream Research

1. Introduction

With the development of the IT industry, the improvement of computing power and the widespread application of big data, the performance of the artificial intelligence (AI) model has also improved significantly.In recent years, AI’s capabilities have reached or even surpassed the level of human beings in many fields, and quickly applied to medical, finance and education industries.

A typical case of AI commercialization is ChatGPT, which is a generative AI model launched by OpenAI in November 2022, which can understand and respond to human natural language.ChatGPT attracted 1 million users only after 5 days of launch, and reached 100 million monthly active users within 2 months, becoming the fastest growing consumer application in history.

NVIDIA, the GPU required by the main AI platform, has also benefited a lot from this trend.In the first quarter of 2024, NVIDIA’s net profit increased by 628% year -on -year to $ 14.8 billion, the stock price rose about three times compared with last year, and the market value reached 3.2 trillion US dollars, which performed quite well.

The rise of the AI ​​industry has a significant impact on the encryption market.In June 2022, when the NFT art project was in a prosperous period, the AI ​​model Dall-E 2 developed by OpenAI was released, which can generate high-quality images according to text, which led to the mention of the AI ​​keywords in the main encryption Telegram channel in South Korea.The amount has increased by 8 times.In addition, starting from the second half of 2022, more and more attempts have more directly combined AI and blockchain, and the amount of AI’s withdrawal has doubled.

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The strong interest of the encrypted community in AI is also reflected in the investment trend of encrypted projects related to AI.According to data from the virtual asset statistics website Coingecko, as of August 20, 2024, since the second half of 2022, the projects combined with AI and blockchain have appeared in the second half of 2022, 277 blockchain projects classified as AI fields have a rapid market value of rapid market value rapidly.Growing to $ 21 billion, about 25%higher than the Layer2 category.

However, the blockchain project currently attracted much attention is mainly to use blockchain technology to solve the limitations exposed during the development of the AI ​​industry.The main application scenarios include:

• Distributed GPU network: These projects use blockchain technology to create a distributed GPU network. Anyone can contribute to the GPU computing power and get a token reward, thereby reducing the entry threshold for the high GPU cost of AI model training (for example, IO.NET, Akash Network).

• Decentralized AI training and model development: These projects allow multiple participants to participate in AI training and model development together, and obtain Token rewards through blockchain technology to solve the AI ​​prejudice problem caused by centralized AI development environment (for example, Bittersor).

• AI market on the chain: These decentralized AI market projects use blockchain technology to be transparently evaluated and traded the performance and reliability of AI models or smart parties to meet the needs of various industries and specific functions for AI models or smart parties (for example, SingularityNet, SingularityNet, SingularityNet, SingularityNet, SingularityNet, SingularityAutonolas).

In addition to the above examples, there are many new attempts that are emerging. Blockchain infrastructure, such as decentralized data markets and IP protocols, to solve the challenges facing the current AI industry.These attempts are providing a more stable infrastructure for the AI ​​industry and expanding the application scope of blockchain technology.

At the same time, integrating AI into the blockchain ecosystem also contains unlimited development potential.Especially in the DEFI service based on no availability, by introducing AI, it can reduce dependence on trusted third parties, thereby achieving functions that are difficult to achieve in existing smart contracts.

In this article, we will explore the specific application instances of AI in the current DEFI protocol, the challenges faced, and the future development direction of AI in DEFI.

2. Smart DEFI

AI has excellent real -time data analysis capabilities and can draw conclusions from a large amount of data.This feature plays an important role in helping users perform capital operations and risk management, which plays an important role in the benefits and risk data provided by the specific DEFI protocol.In this case, AI is mainly used in the user interface of DAPP, so that the existing DEFI protocol can use AI without a major structural adjustment.

Yearn Finance is a typical example, which is a income polymer.In order to provide users with a safer investment environment, Yearn Finance is working with AI Smart Construction Platform GIZA to establish a real -time strategic risk assessment system for its V3 insurance library.

However, I am more concerned about the integration of the Defi ecosystem and AI. By using AI’s independent thinking and action ability, the DEFI protocol has the potential of autonomy.

The current DEFI protocol is usually passively responding to user transactions, that is, the smart contract of the protocol will run in a preset manner according to the user’s interaction.However, by incorporating AI into the DEFI protocol, the agreement can independently analyze the market conditions, make the best decisions, and actively generate transactions.This makes it possible to provide a new type of financial services that can provide new financial services that are difficult to achieve in the past.

Let’s take a look at some smart DEFI protocols that apply AI in its main operational mechanism.

2.1. FYDE TREASURY: AI token Fund

FYDE TREASURY is an agreement that provides a basket -type fund service called Liquid Vault. The service will operate multiple token together and manages the investment portfolio by AI.Users can receive and use the liquidity tokens corresponding to the assets deposited in LIquid Vault $ TRSY.

2.1.1. Asset selection and fund operation methods

The core task of Liquid Vault is to increase the proportion of low volatility Token to the downward trend of the market in order to provide users with a smaller loss rate, which will perform well in investment portfolio compared to other asset categories in the long run.

FYDE TREASURY selected assets incorporated into the LIQUID VAULT investment portfolio through the following three steps:

• Evaluate whether the transaction liquidity is sufficient

• Check the audit of the background and agreement code of the founder of the agreement to determine whether there is a problem

• Data from the AI ​​analysis chain to evaluate whether there are brushing transactions, the concentration of Token, and the trend of natural growth, etc.

The Token that meets these standards will be included in the LIquid Vault investment portfolio.In addition, Fyde Treasury also uses AI during the asset management process of Liquid Vault, which specifically includes:

• Market analysis and forecast: Analyze trading data, market trends and news on the chain to predict future market trends

• Weight calculation and re -balance: Based on the predicted market trends and the recent performance and volatility of Token in the investment portfolio, calculate the best token weight and re -balance

• Risk management and response: Real -time quickly identify the governance attacks of each Token in the investment portfolio, depletion of liquidity pool, and abnormal trading of specific wallets, and timely adjust the investment portfolio or isolation related Token

• Advanced asset management strategy: Continuously evaluate the performance of the investment portfolio, analyze the effectiveness of the strategy, and extract data from it to modify and develop new strategies.Then, compare the existing strategy with the new strategy, measure its performance, and apply it to the actual operating strategy

As of August 23, the LIquid Vault Investment Portrait has 29 token, which are all types of tokens based on Ethereum networks.

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Liquid Vault Dashboard, Source:FYDE

In addition, Fyde Treasury provides a feature that allows users who store specific protocol governance to LIquid Vault to maintain their voting rights by liquidity token.The TOKEN governance of the user in the LIquid Vault will be sent to their wallets in the form of $ GTRSY-TOKEN, and these Token can be used to perform the corresponding protocol governance vote in the Fyde Treasury tab.

However, the voting right will be affected by the weight of the TOKEN in the investment portfolio, so the voting right may change each time the investment portfolio is adjusted.

2.1.2. Liquid mining activity

FYDE TREASURY will reward Fyde points from the liquidity provider that improves the liquidity provider of the liquidity provider that improves the liquidity provider of the $ TRSY (liquid Vault liquidity token) and promises to distribute the TOKEN $ FYDE based on these points in the future.

Different from other projects, users usually require users to directly deposit in transactions on the decentralized exchange to obtain a liquidity mining activity to obtain token or points. FYDE TREASURY accepts users to deposit $ FYDE into the liquidity mining contract inside the agreement, and directlyProvide liquidity on Uniswap V3.Uniswap V3 is a decentralized exchange that allows users to set the supply range when providing liquidity.

When providing liquidity to Uniswap V3, the system is calculated and executed through the AI ​​-driven analog environment to convert part of the $ FYDE of a liquid mining contract to the best path of $ ETH.In addition, AI also manages the liquidity deposit scope of the UNISWAP V3 according to the real -time market conditions, which makes the capital efficiency of about 4 times higher than the liquidity of the same capital on the general decentralized exchange.

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AI SIMULATION DASHBOARD, Source:Fyde docs

In this way, FYDE TREASARY is building a basket fund.The fund uses AI to manage the assets deposited by users in the agreement, thereby reducing human judgment and preventing various risks in the market.

2.1.3. Agreement performance

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Since its launch in January 2024, FYDE TREASURY’s TVL has steadily increased, reaching and stable at about 2 million US dollars.However, as the market has continued to weaken since late May, the return rate of $ Trsy Token has been -35%in the past three months.

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However, compared with other major Token in the Ethereum ecosystem in the Ethereum ecosystem, the price fluctuations of $ TRSY are relatively stable and the decline is relatively small.

Although FYDE TREASURY has been launched for less than a year, its AI model has been continuously learned and developed through market data.With the accumulation and optimization of AI learning, there may be better performance in the future, so it is worth paying attention to the future development direction and performance of Fyde Treasury.

2.2. Mozaic Finance: AI income optimizer

Mozaic Finance is an income optimization protocol using AI to optimize income farming strategies, which are implemented through specific DEFI protocols.It provides users with various DEFI ecosystem asset management strategies, presented in the form of vaults, and uses the following two AI to optimize:

• Conon: Real -time analysis of data on the chain, predict the changes in the APY of market conditions and income farming strategies

• Archimedes: Calculate the best investment strategy based on Conon’s prediction data and implement funds allocation

In Mozaic Finance, AI Smart Conon is the role of “analyst”, and Archimedes is the role of “strategist” to jointly manage the assets deposited by users.

2.2.1. Type of vault

• Hercules: This is a vault that uses stablecoins for income farming. The depositor will get Moz-Her-LP token as the liquidity token.

• The assets of users in the vault are used to provide liquidity and generate benefits through the bridge protocol Stargate.AI will be connected to the vault asset bridge in real time to re -balance into a liquidity pool with higher income.The characteristics of Stargate are that even the same assets, the APY of different networks will vary due to the difference in liquidity.

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Stargate Farm Dashboard, Source:Stargate

• Theseus: This is a vault that generates benefits through various volatility assets. The depositor will get Moz-The-LP token as liquidity token.

• User’s assets will be stored in the GM pool of the GMX protocol. This is a decentralized permanent futures exchange, providing traders with liquidity and incentives.In liquidity deployment, the volatility and interest rate of trading assets in each GM pool will be considered.According to market conditions, the proportion of stablecoins may be increased and it is stored in Stargate to generate additional interest.

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GMX GM Pool Dashboard, Source:GMX

• Peerseus: This is a vault that actively uses the POL (liquidity proof) consensus mechanism to obtain network rewards by providing liquidity for the BERAChain’s ecosystem protocol that is about to launch the main network.The Mozaic Finance team is developing and preparing to launch a strategy to use the BERACHAIN ​​test network. Details will be announced later.

For more information about BERAChain and POL consensus mechanisms, see the article BERACHAIN ​​- The Bear Catching Two Rabbits: liquidity and Security.

Unlike Fyde Treasury, which builds the token basket fund, Mozaic Finance is a protocol that optimizes liquidity supply strategies and processes and manage risks through AI when depositing user assets into the DEFI protocol.

As of January 2024, Hercules and Theseus vault performed well, and the expected APY was about 11% and 50%, respectively.However, due to the stolen incident of Mozaic Finance’s vaults, both vaults have been suspended.

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As of January 2024, the expected annual return rate of Hercules and TheSeus vaults. Source:@Mozaic_fi

2.2.2. Fund theft and Mozaic 2.0

Mozaic Finance occurred on March 15, 2024. A capital theft occurred.At that time, the team was transitioning to a new security solution developed by Hypernative to enhance the risk and security on the chain.Before the security update was completed, an internal developer found that he could steal the treasury funds by using the private keys of the core team.They invaded the member’s computer to obtain the private key, and used the key to steal about $ 2 million in vault assets, and then transferred these assets to a centralized exchange for liquidation.

Affected by this incident, the Mozaic Finance team suspended the operation of Hercules and Theseus vaults, and the value of governance and agreement costs to collect Token $ Moz fell about 80%.After the incident, the Mozaic Finance team immediately announced the progress of the incident and cooperated with security companies to track the flow of stolen assets.At the same time, they applied for frozen and returned funds to developers to store the exchanges of stolen assets, and strived to restore the normal operation of the agreement.

Fortunately, the return of all the stolen funds is currently underway.While waiting to return the stolen funds from the centralized exchange, the team is preparing to launch Mozaic 2.0.The new version includes the following improvements:

• Enhance security: Through security companies such as Trust Security, Testmachine, and Hypernating, code audit and security enhancement.

• AI model improvement: Comprehensively upgrade the existing Archimedes model, and based on expert knowledge prediction and learning black swan incidents.In addition, detect abnormal decisions and set signs to perform artificial review and model improvement.

• Improve user experience: Improve the UI/UX of DAPP, and enhance the user’s access to DAPP in various chain environments through account abstraction and bridge service integration.

Therefore, although Mozaic Finance has gone through a major capital theft crisis, they are actively preparing for the launch of Mozaic 2.0 to provide users with safer and efficient asset management services for users.

3. Challenge: AI decentralization and scalability dilemma

So far, we have learned how the intelligent Defi protocol uses AI as the core component of DEFI applications through Fyde Treasury and Mozaic Finance.The advantages that the intelligent DEFI protocol can bring through AI includes:

• Establish a new DEFI protocol model through autonomy

• Improve capital efficiency by analyzing and optimizing capital operation methods

• Real -time analysis and response to abnormal transactions and other risks

At present, the integration of blockchain and AI is mostly concentrated in establishing blockchain infrastructure to overcome the limitations of AI.However, in view of the above advantages, more attempts are expected to introduce AI to the DEFI agreement.Of course, in the process of integrating these two fields, there are also challenges that need to be resolved.

AI requires an environment that can quickly process a large amount of data, but the current blockchain infrastructure does not reach the speed of this data processing.For example, the ChatGPT-3 model is estimated to process trillions of data per second to answer questions, which is about 10 million times faster than Solana’s largest TPS (number of transactions per second).

In addition, even if the blockchain infrastructure is developing to the degree that can support AI computing, the transparency of public blockchain may still expose the training data and decision -making weights of AI models to the public.This means that the transaction generated by AI may become predictable and face the risk of various external attacks.

Therefore, hopes, including Fyde Treasury and Mozaic Finance, use the AI ​​DEFI protocol to run AI on a centralized server and interact with the blockchain based on their results.

However, this method causes users to trust the integrity of the team responsible for managing AI when they deposit assets in the agreement.This situation weakened DEFI to eliminate the needs of trusted third parties through intelligent contracts to provide the core principles that provide a trading environment without trust.

When applying AI in the blockchain,Decentralization and scalabilityThe problem is considered a challenge that Defi applications must solve during the use of AI.andZKML (zero -knowledge machine learning)Technology is attracting attention as a solution.

3.1. ZKML (zero -knowledge machine learning)

ZKML is a technology that combines zero -knowledge proof (ZKP) with machine learning (ML).Zero knowledge proof is an encryption method that can verify the authenticity of the data without disclosure, thereby achieving privacy protection and data integrity verification.ZKML uses these features proven by zero -knowledge to be applied in the field of machine learning, so that in the case of non -public input, parameters and internal mechanisms of AI models, the correctness of the model output can be verified.

In addition, through the design of the smart contract of the DEFI protocol, zero -knowledge proof is proved that only when the AI ​​model runs honestly without external interference, it can be transaction on the chain, so that the AI ​​is safely integrated into the DEFI protocol.

For example, the previously mentioned Mozaic Finance program introduced zero -knowledge certification technology into its agreement in the future.They said in the document that the technology will enhance the ability to verify Archimedes honest decisions and management vaults.

However, zero -knowledge proof technology is still emerging, and a large number of discussions and development are required to achieve practical application.In particular, for complex AI models, although zero -knowledge proof is more efficient than performing the AI ​​model directly on the blockchain, it still needs to exceed the computing power and storage space provided by the current blockchain infrastructure.Therefore, in order to make ZKML truly practical, further technical progress and optimization must be achieved in zero -knowledge certificate and blockchain infrastructure.

4. Economic and authentication based on AI intelligence

I expect that with the further development of blockchain and AI technology, they will gradually overcome the challenges required to achieve the integration of the two.Based on this progress, I believe that in the near future, most DEFI protocols will integrate AI into its operating mechanism.

In addition, with the emergence and maturity of AI intelligence deployment and trading platforms such as SingularityNet and Autonolas, not only can AI be integrated at the agreement level, but also creates an environment that easily uses AI intelligence.In other words, everyone participating in the blockchain ecosystem can build and use the intelligent DEFI protocol optimized for individuals.

For example, AUTONOLAS’s AI intelligence is on the forecast market platform of the GNOSIS network to bet on the chain and under the chain data, and its number and activities have steadily increased.From the year in July 2023, these intelligences have generated more than one million transactions.

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It is expected that the number of personalized AI intelligences will be increased efficiently around the weather in the future, and the blockchain ecosystem will be actively participated in the blockchain ecosystem.This will promote the use of idle liquidity and more efficient capital operation, thereby greatly improving the overall liquidity of the ecosystem.In the end, transactions between AI intelligence may become the main activity of an ecosystem, forming a new economic ecosystem based on intelligence.

In addition, as the intelligence of personalized AI intelligence models continues to increase, these intelligences may expand their scope of activities until the field of “human” design.This includes asset management, capture and participation in air investment opportunities, and participating in governance activities based on personal preferences.

Therefore, as AI intelligence simulates human behavior accurately, it will be difficult to distinguish “real” human users and AI intelligence in the future.To this end, the importance of identity as a mechanism that proves the identity and uniqueness of the user is expected to become more prominent, especially in the agreement that values ​​human value and agency rights.

4.1. Identity certificate

Identity proof is a mechanism. By combining the unique characteristics of human beings with personal accounts on the Internet to verify personal identity and uniqueness.The current methods in discussions and development are mainly divided into two categories:

• Based on physical certification: Use hardware equipment to collect unique biometric information, such as facial recognition, fingerprint recognition, and iris recognition.

• Method based on behavioral analysis: By analyzing the user’s social network map, reputation, and network activity model, the authenticity and uniqueness of the account is judged.This method depends on the network activities of users’ specific accounts and their interaction with other accounts.

The method of identification based on behavioral analysis can better protect user privacy, and can be achieved without using special hardware devices.However, in order to improve the accuracy and reliability of proof, this method requires a lot of network data.As the complexity of AI intelligence increases, its identification ability may decline, so it is expected that the future physical certification -based identity certificate will be widely used.

A representative protocol that uses a physical certification method is WorldCoin.The project was co -founded by OPENAI’s founder Sam Altman, and he is also the creator of ChatGPT.WorldCoin aims to assign a unique digital ID to everyone around the world through identity proof and distribute $ WLD tokens to these people.This is to study and explore the possibility of universal basic income to cope with the unemployment caused by future development of AI.

4.1.1. WORLDCOIN

WorldCoin is a physical certification project. It recognizes human iris by using special hardware named ORB.After completing the iris recognition, the WorldCoin network will issue a World ID to the iris and generate a private key to access the world ID on the user’s personal device.

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Worldcoin orb, source:WorldCoin WhitePaper

At present, the WorldCoin network only stores the hash value of scanning iris data, which can prevent users from being rebuilt or identified.When the World ID is required, the user’s device will generate a zero -knowledge certificate and send it to the network, thereby protecting the data privacy of the data on the user chain.However, because the system only performs iris recognition when it is awarded the World ID, there are still some challenges, such as transferring the World ID through the device holding a private key to the device of the transaction, and the AI ​​smart body to obtain the private key.To cope with these issues, Worldcoin is discussing the introduction of biometric verification system when using the World ID, and develops AI detection algorithms based on behavioral analysis.

5. Conclusion

在本文中，我们探讨了随着 AI 融入区块链生态系统而涌现的新型服务协议，这些协议所面临的挑战，以及基于 AI 智能体的区块链生态系统的未来。

In the future, AI and blockchain technology will continue to develop and integrate with each other to make up for each other’s deficiencies.Through this fusion, it is expected to provide individuals with a more convenient environment so that it can easily access and use AI and blockchain technology.

尤其是在未来以 AI 智能体为核心的链上经济生态系统中，人们将无需具备深厚的金融知识即可轻松使用和提供金融服务。This will help greatly enhance the liquidity of the ecosystem on the chain and expand the inclusiveness of the financial industry.

In addition, AI and blockchain can not only affect each other, but also have the potential to become infrastructure in various industries.Therefore, the development of these two technologies will have a profound impact on the entire human society, not limited to a single industry.

然而，AI 相关的法规，如数据隐私保护和 AI 责任问题，以及区块链相关的法规，如 Token 的证券属性，将对这些技术的未来发展方向和行业结构产生重大影响。Therefore, we need to pay close attention to the upcoming AI and blockchain industry regulations in the future.

We finally hope that the development of these technologies can create a better environment for human beings and help solve many problems in society.