The combination of AI and DeFi could benefit both industries

Author: Stephen Katte, cointelegraph Translation: Shan Oppa, Golden Finance

Artificial intelligence (AI) and decentralized finance (DeFi) have been promoted as technologies that can change the world, and experts say that combining the two could create opportunities for both industries. Unparalleled opportunity.

DeFi is a financial service based on blockchain technology that mainly involves peer-to-peer transactions using smart contracts, eliminating intermediaries such as banks and giving individuals direct control monetary assets.

Artificial intelligence, on the other hand, is a technology that can simulate human intelligence and perform tasks such as decision-making, problem-solving, and data analysis at high speeds.

BNB Chain chief scientist V said: Artificial intelligence’s ability to effectively analyze large amounts of data, identify patterns and make intelligent predictions can enable DeFi to optimize operations and enhance security measures. And provide users with personalized services. Using AI can also improve features such as helping to review smart contracts and determine loan credit scores.

V said: “Decentralized computing resources have the potential to create a more equitable and equitable AI ecosystem by providing a computationally powerful, cost-effective, and energy-efficient infrastructure. Artificial Intelligence The increasing complexity of intelligent algorithms poses challenges, but Web3 technology focused on distributed computing and open collaboration provides a promising framework for promoting collaborative artificial intelligence initiatives.

"There are some preliminary synergies between DeFi and AI" and combining AI with decentralized applications could improve both industries, potentially adding cryptocurrency and blockchain technology in the process Use cases.

Cryptocurrency and DeFi can also introduce more incentive methods to decentralize the entire AI infrastructure in areas such as data markets and AI algorithm markets.

"If all data is considered an asset, then the higher quality data is more valuable," V said. "Since AI models are designed for different applications Designed so a marketplace for these models could emerge; users can select and purchase the models that best suit their specific needs, creating a demand-driven marketplace focused on matching the right AI model to the right use case. ”

However, while integrating artificial intelligence into DeFi platforms can bring huge opportunities, there are also potential security challenges.

Artificial Intelligence allows DeFi traders to implement trading strategies through AI-driven trading bots and predictive analytics to identify market trends. However, AI algorithms are easily susceptible to data manipulation if every Individuals are relying on the same flawed data model, which can lead to losses.

U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler ) expressed similar concerns about the use of artificial intelligence in traditional financial markets in 2023.

Gensler believes that if mainstream financial institutions start to use the same data model based on Decision-making can lead to a herd mentality, destabilize financial markets and inadvertently trigger an economic recession.

Artificial intelligence can help solve problems in DeFi, and vice versa. Likewise

DappRadar's blockchain analyst Sara Gherghelas told Cointelegraph that the combination of Web3 technology and artificial intelligence could represent a "breakthrough convergence with huge potential." .

In her view, artificial intelligence can help solve problems in the DeFi field, and vice versa. It is possible to promote the development of these two fields and make financial services More efficient, safer and more convenient. Gherghelas believes that the key question we face is not whether we implement artificial intelligence, but how we implement artificial intelligence to maximize its benefits.

"AI's ability to analyze large data sets can enhance risk assessment, fraud detection and predictive analytics in DeFi," Gherghelas said. In contrast, DeFi is transparent and decentralized The ledger can provide AI with robust and tamper-proof data, improving the accuracy and fairness of AI models.

Artificial intelligence is already being used in the DeFi space to help detect fraud, authenticate identities, and combat money laundering. Cryptocurrency exchange Binance is starting to use artificial intelligence to fight back.

If well thought out, the synergy of Web3 and artificial intelligence could revolutionize industries such as finance, healthcare, and supply chain, increasing efficiency and transparency to new level.

She said: "Because decentralized technology provides diverse and secure data sets, this integration has innovative applications, enhanced data privacy and powerful of AI models.”

The United States and many other countries have taken steps to regulate the development of artificial intelligence and prevent some of the predicted worst-case scenarios from coming true.

So far, only Europe has made real progress. Through the Artificial Intelligence Act, the EU established a framework setting out obligations for the development of artificial intelligence, including testing, recording, transparency and notification obligations.

Gherghelas believes that integrating artificial intelligence into DeFi may require a completely new regulatory environment to address its impact, which may cause problems for an industry already struggling to keep up with the rapid development of artificial intelligence. The growth of regulators brings another problem.

"It is important to emphasize that artificial intelligence is not just a fleeting trend; it is a trend." It is here to stay, and will increasingly become part of our daily lives," said Gherghelas.

"The key is to guide this integration responsibly and ensure that artificial intelligence Deployment is ethical, fair and consistent with social values," she added.

Concerns about AI-generated content have grown exponentially over the past few years. World The Economic Forum highlights the adverse consequences of AI technology in its 19th Global Risks Report.

The United Nations also calls on AI stakeholders to address the spread of disinformation question and asked them to take immediate "urgent" action to ensure the responsible use of artificial intelligence.

Deepfake has been flagged as a matter of particular concern. Artificial Intelligence Video technology can create computer-generated images and sounds that are often indistinguishable from real ones. Deepfakes are already used in the film industry to slow down the aging of actors. However, the technology also has a dark side. < /p>

Recently, the ghost of US President Joe Biden called voters, suspected of manipulating the results of the 2024 election. Music superstar Taylor Swift also Found herself the victim of a deepfake image as artificial intelligence was used to create explicit photos of her online.

From 2022 to Deep fakes increased tenfold across all industries globally in 2023.

AI and DeFi are still in their early stages

OneReach.ai creative content director Josh Tyson said in an interview with Cointelegraph that in his view, decentralization and artificial intelligence are inextricably linked - we are in the early stages of their relationship .Wider adoption of artificial intelligence seems likely to lead to a more decentralized world.

Tyson believes that software such as OpenAI's chatbot can provide information on Web3 and DeFi A solid background of foundations and evolution that will be valuable to users on both sides of the customer equation.

"It seems that many of the problems in the DeFi space are related to the pace of change; as NFTs, applications, platforms, and decentralized exchanges continue to evolve, it is difficult to Build a basic understanding of the field."

Tyson added: "If generative AI can be leveraged to create a reliable, trustworthy and intuitive entry A gateway to the field, which could improve the industry."