How will AI, as it plays an increasingly important role in the crypto space, reshape the crypto landscape?

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Artificial intelligence (AI) has already entered the cryptocurrency field in the form of AI agents, trading bots, and automated risk analysis.

Author: Arthur Azizov

Compiled by: Block unicorn

The world is facing a new technological race, and the development of artificial intelligence has become a national priority. The recent launch of the "Stargate" project in the United States is a strong proof of this trend.

Although Trump's presidency is still in its early stages, we can already see the emergence of a technology-centric trend, as he plans to invest $500 billion in artificial intelligence infrastructure.

At the same time, this technological boom will also reshape another industry - cryptocurrencies.

Artificial intelligence (AI) has already entered the cryptocurrency field in the form of AI agents, trading bots, and automated risk analysis.

The question is not whether AI will change cryptocurrencies - because it already has.

The real question is - what does this mean for cryptocurrencies and blockchain in the long run?

Will the involvement of AI strengthen this field, or will it undermine the decentralization principles cherished by the cryptocurrency community?

Here are my thoughts.

The current state of AI and cryptocurrencies - the transformation has begun

In the current situation, I believe that the presence of AI in cryptocurrencies has not yet gone too far - it can be said that it is still in its "infancy".

But this state will not last long - progress is happening rapidly.

The industry is moving beyond simple trading bots. Artificial intelligence is now being used to drive market-making strategies and risk assessment.

We have even seen cases of AI-driven decentralized venture capital.

Projects like Moby AI, Griffain AI, and HeyAnonAI are becoming more and more sophisticated - although these are still early iterations of AI-based cryptocurrency financial intelligence, they have already surpassed human traders in terms of speed and efficiency.

As AI models grow in complexity and gain greater autonomy, I believe they will soon not only follow market trends, but also shape these trends.

Future prospects

The next few years will redefine the meaning of participating in cryptocurrencies, and AI will be at the core of this transformation, bringing changes in all areas.

Autonomous AI trading agents are already optimizing market strategies in real-time, with speeds and precision far beyond human capabilities.

The more advanced these robots become, the greater the competitive advantage investors and traders will gain by using them.

In the DeFi compliance domain, AI-driven tools will be key to maintaining security.

Fraud and illegal transactions have always been a concern, but AI-driven monitoring systems can analyze activity on the blockchain network and detect suspicious patterns in real-time.

This will allow them to flag potential risks before they escalate, making this field more secure.

At the same time, AI-integrated DeFi services will simplify lending by removing human intermediaries.

AI models can automatically match borrowers and lenders, and dynamically adjust interest rates based on market conditions.

All of this can be done without human involvement.

I can also see on-chain AI agents playing an important role in governance.

They can provide real-time market insights, manage portfolios, and even participate in DAO decisions by implementing more data-driven governance choices.

In addition to financial applications, AI can also solve the long-standing problem of low efficiency in blockchain.

For example, one of the main issues with PoW (Proof-of-Work) networks is high energy consumption.

AI can solve this problem by analyzing and predicting network demand, dynamically adjusting energy consumption to reduce waste and optimize performance.

Furthermore, AI can facilitate "sharding", where blockchain data is distributed across multiple nodes, allowing for parallel processing and faster transaction times.

This can help effectively scale blockchain networks, which is a key step for cryptocurrencies to gain wider adoption.

Although today's AI is still just a supporting tool, unable to truly replace human decision-making, this will not always be the case.

In my view, AI has the potential to evolve into a dominant force, actively shaping the future of DeFi.

Risks - will AI undermine decentralization?

While AI promises to significantly improve efficiency, it is undeniable that it is not without risks. One of the biggest threats I can foresee is AI-driven market manipulation.

Imagine a scenario where AI-driven trading firms control DeFi, making it harder for retail investors to compete.

We have already seen this phenomenon in TradFi (traditional finance), where high-frequency trading firms use AI to exploit market inefficiencies.

The same could happen in DeFi, leading to an arms race between AI robots, while human traders remain at a disadvantage and ultimately left behind.

That said, DeFi does have some advantages in this regard. Its high spreads and transaction fees act as a natural barrier to prevent AI from immediately taking a dominant position.

Since trading bots in DeFi must deal with significant costs, it creates a chicken-and-egg situation.

As long as fees and spreads remain high, AI-driven trading cannot easily scale up. On the other hand, if trading volume is not high, these costs will remain elevated.

This can actually prevent AI-driven market manipulation, as everyone in DeFi must operate on equal terms.

In addition, the issue of AI-generated smart contracts must be considered. AI can write complete contracts, but what if these contracts contain hidden vulnerabilities?

Hackers can exploit the code generated by AI, using adversarial inputs to bypass security audits.

A compromised AI-generated contract could mean the loss of millions of dollars in crypto assets.

DeFi developers must be very vigilant about this threat - you absolutely should not rely on AI to write your code.

The future of artificial intelligence and cryptocurrencies

The AI race is not just a competition between nations vying for dominance - the real battle is between open-source AI and closed-source AI.

The launch of DeepSeek R1 has laid the foundation for a major shift in this regard.

It has shattered the traditional assumptions about AI development, proving that the multi-billion dollar budgets of large tech companies are not always a necessary condition for achieving breakthrough innovations.

AI development is no longer centralized, and I believe open-source models can align well with the values of cryptocurrencies, rather than more centralized approaches.

The idea of AI taking over the cryptocurrency field is no longer a controversial issue. The only question now is how quickly it will happen.

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Disclaimer: The content above is only the author's opinion which does not represent any position of Followin, and is not intended as, and shall not be understood or construed as, investment advice from Followin.
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