DeFAI: Artificial Intelligence Leading a New Chapter in Decentralized Finance

Decentralized Finance ( DeFi ) has long been viewed as a key driver for the mass adoption of cryptocurrencies, yet its uptake has been disappointing. According to the latest data, approximately 562 million people globally hold cryptocurrencies, accounting for 6.9% of the total population. However, the penetration rate of DeFi is only 1.4%, far below expectations.

Nevertheless, DeFi has shown astonishing growth in trading volume. Currently, the trading volume of the decentralized exchange (DEX) accounts for 16.7% of the centralized exchange (CEX), setting a new historical high. This phenomenon indicates that the DeFi market is still mainly dominated by financially strong old users, with insufficient appeal to new users.

The main reason why DeFi struggles to attract new users is its high knowledge threshold and poor user experience. Even the most basic token swap operation requires users to understand how to transfer tokens to the blockchain, reserve enough gas fees, comprehend the concept of slippage, and the authorization mechanism, among other things. This series of complex steps is far less simple and direct than the one-click buy and sell offered by centralized exchanges.

In the face of this dilemma, the introduction of artificial intelligence (AI) brings new hope to Decentralized Finance, giving rise to the entirely new concept of DeFAI. DeFAI aims to reduce the complexity of Decentralized Finance through AI technology, expanding its application range and enabling more people to easily and safely use blockchain financial services.

The core value of DeFAI is mainly reflected in three aspects:

1. Lowering the operational threshold: Users only need to input commands in natural language, and AI can automatically complete complex multi-step operations.

2. Automated Strategies: AI agents can execute and adjust professional arbitrage and investment strategies, allowing ordinary investors to enjoy advanced quantitative tools.

3. Integrated Data Analysis: AI can simultaneously monitor multidimensional information such as social media sentiment, influencer comments, on-chain transaction data, and price trends, and automatically execute trades when specific conditions are met.

The DeFAI project is mainly divided into three categories:

1. AI Abstraction Layer: Simplifies complex DeFi operations into natural language instructions, with AI automatically handling optimal paths and details such as gas fees in the background.

2. Automated Trading Agents: With user authorization, AI agents can execute complex multi-step trading strategies, such as regular purchases and providing liquidity.

3. Market Analysis Agent: Integrates and analyzes vast amounts of on-chain data, social media information, etc., to provide users with real-time market insights, and can even automatically execute trades.

With the continuous breakthroughs of AI in dialogue interfaces, strategy automation, and data integration, DeFAI has opened up a new development path for Decentralized Finance. From simple natural language trading to complex automated arbitrage, and to an ecosystem of multi-agent collaboration, DeFAI is continuously maturing and evolving.

This could trigger the next wave of a true "DeFi summer," allowing more users to enjoy the potential benefits of Decentralized Finance with a low entry barrier. At the same time, professional investors can also use this to implement more flexible and secure trading strategies. With the deep integration of blockchain and AI technology, the wave of DeFAI is gradually expanding, which is worth our continued attention and anticipation.