In the ever-evolving world of decentralized finance and crypto, a silent but powerful revolution is underway, thanks to the advent of artificial intelligence (AI). As DeFi redefines the boundaries of traditional financial services, AI is emerging as a key enabler of change and innovation. This promising fusion between blockchain technology and AI paves the way for more secure, efficient and intuitive solutions, and radically transforms the user experience and possibilities of the crypto ecosystem. From more reliable smart contract audits to early threat detection systems, improved crypto wallets and cross-chain routing, AI is not only complementing DeFi, it is reinventing it.
Auditing smart contracts
AI can be very useful for carrying out audits of smart contracts which happen to be a vital component of the crypto ecosystem. Indeed, most crypto projects devote a lot of resources to auditing their smart contracts. However, hackers manage to detect logical vulnerabilities and carry out price manipulation, Flash Loan attacks, etc.
In recent years, crypto projects have lost several hundred million dollars due to these types of hacks. Several DeFi projects owe their bankruptcies to these hacks.
Although it is not yet clear whether AI can carry out smart contract audits on its own or not, it is a possibility that should not be ruled out. It could at least help human auditors to better audit smart contracts and minimize the risk of errors in the audit.
Early detection of malicious actors in the crypto ecosystem for rapid response
Hackers and other malicious actors are among the main threats facing DeFi and the crypto sector in general today.
The number of hacks that DeFi protocols and crypto users experience far exceeds what crypto companies can intercept. Additionally, their reactive approach to exploits does not necessarily help affected victims.
By pushing technological thinking further, it is possible to train AI models to detect suspicious transactions early. For example, this will involve creating proactive AI that signals threats by analyzing on-chain data and suspicious behavior.
Indeed, most crypto hackers use already known techniques to attack protocols with certain vulnerabilities. Crypto projects can therefore develop early detection AI models in order to anticipate attacks and stop them before they are implemented.
Integrating AI into crypto wallets
As impossible as it may seem, it is quite possible that within a few years, all crypto wallets will integrate advanced AI functionalities. At the moment, some Metamask wallets have been equipped with features that alert their owners when they try to approve a malicious transaction.
While this feature is still in its infancy, it is possible that crypto exchanges like Coinbase, Binance, etc. develop such AI and integrate it into their wallets.
Imagine a wallet that explains the implications of every action you take. Imagine a wallet that alerts you when you are about to approve a suspicious transaction. DeFi, in particular, will greatly benefit from such features.
AI to create a more efficient routing system between blockchains
With the rapid evolution of the sector, the decentralization of crypto finance is accelerating. In the coming years, we can expect to see DeFi spread across multiple blockchains and layers.
The problem is that it will take perfect integration for cross-chain or cross-layer transactions to be efficient, fast, secure and less expensive. When we reach this stage, AI models will be able to help streamline on-chain traffic and optimize cross-chain transactions.
On-chan tracking more accelerated and accessible to all
With the penetration of AI into the crypto and blockchain sectors, on-chain tracking, currently in full growth, could take on new dimensions. Indeed, for the moment, expert companies are responsible for this, as the process is rather complicated and demanding.
The adoption of AI in this area could not only accelerate the on-chain tracking process, but also democratize it. Users will thus be able to keep an eye on their transactions on the network. This will have the effect of increasing the level of transparency of blockchain technology and limiting the use of cryptocurrencies for criminal purposes.
There is no need to talk about AI-powered trading robots anymore. The coming years will be marked by a proliferation of these solutions. At some point, current crypto trading strategies may become outdated.
Accelerating the training of new crypto users
If the world of cryptocurrencies is accessible to everyone, the subject of cryptocurrencies is not as easy to master as you might think. Indeed, the ecosystem sometimes undergoes very rapid changes. Therefore, from one year to the next, the educational resources available online can become obsolete.
Effective integration of AI into training platforms can help update educational resources in real time to include changes and innovations. This can also make it possible to adapt the training to each user according to their level of knowledge and their agility with cryptocurrencies. New crypto users will therefore be able to integrate more easily and not get lost as they navigate a rapidly evolving ecosystem.
Conclusion
In summary, AI’s ability to handle complex tasks makes it a key resource for technological evolution. It could therefore have a revolutionary impact on cryptos and on decentralized finance in particular. The main aspect on which it will act will undoubtedly be the security of crypto protocols and wallets. AI will also help strengthen the quality and accessibility of on-chain data tracking as well as the fluidity of cross-chain transactions. However, we cannot objectively measure the scope of the impact of this disruptive technology on the world of cryptocurrencies. Its potential for development is simply endless. If proper regulation of AI is put in place, the technology could be the trigger for the next revolution within the crypto ecosystem.
Maximize your Tremplin.io experience with our ‘Read to Earn’ program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.
