DeFAI: Artificial Intelligence Empowers Decentralized Finance to Reach the Masses

Decentralized Finance (DeFi) has long been seen as the hope for the widespread adoption of the cryptocurrency industry, but its complexity and high barriers to entry have hindered new users. According to the latest survey, approximately 562 million people worldwide hold cryptocurrencies, but the penetration rate of DeFi is only 1.4%. This data highlights the challenges DeFi faces in attracting new users.

Nevertheless, DeFi has seen significant growth in trading volume. Currently, the trading volume of decentralized exchanges (DEX) accounts for 16.7% of centralized exchanges (CEX), marking a historical high. This phenomenon indicates that the DeFi market is still dominated by older users with larger capital, and it lacks sufficient appeal to new users.

The main reasons for this situation are the high barriers to entry and poor user experience of Decentralized Finance (DeFi). Even for the most basic token exchange operation, users need to understand how to transfer tokens to the blockchain, reserve gas fees, grasp the concepts of slippage and authorization, among others. These complex steps are far less convenient than the one-click buy and sell offered by centralized exchanges.

However, the introduction of artificial intelligence (AI) may bring groundbreaking changes to Decentralized Finance, which has also given rise to a new concept—DeFAI.

DeFAI is a combination of DeFi and AI, aimed at reducing the complexity of DeFi through AI technology, making it easier for ordinary users to accept and use. The core value of DeFAI lies in:

1. Lower operational thresholds: Users only need to input instructions in natural language, and AI can automatically complete complex operational processes.

2. Automated Strategies: AI can replace professional traders in executing arbitrage and investment strategies, and even automatically adjust risk parameters.

3. Data Integration and Analysis: AI can monitor multiple data sources simultaneously, including social media, on-chain data, and price trends, providing more comprehensive market insights.

The DeFAI project is mainly divided into three categories:

1. AI abstraction layer: Simplifying complex DeFi operations into natural language instructions. Representative projects include Griffain from the Solana ecosystem, as well as Grift, which focuses on cross-chain functionalities.

2. Automated Trading Agents: After user authorization, complex trading strategies are executed automatically. For example, Almanak provides institutional-level quantitative trading services, while Cod3x allows users to create AI trading agents by dragging and dropping components.

3. Market Analysis Agent: Integrate and analyze large amounts of data to provide users with market insights. For example, AIXBT can monitor KOL and community interactions, while Kwant provides technical analysis based on candlestick charts.

The emergence of DeFAI has opened a new development path for Decentralized Finance. From simple natural language trading to complex automated arbitrage strategies, DeFAI is expected to significantly lower the usage threshold of Decentralized Finance, attracting more ordinary users to participate. At the same time, it also provides professional investors with more flexible and secure trading tools.

With the continuous integration of blockchain and AI technologies, the potential of DeFAI is gradually emerging. This may trigger the next wave of "DeFi boom," allowing more users to participate in decentralized finance with a low barrier to entry and enjoy the potential benefits it brings. The development trend of DeFAI is worth the industry's continuous attention and anticipation.