AI and DeFi: Unleashing the Next Billion Users On-Chain

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Deep-dive Q&A session continued to peel back the layers of the complex world of DeFi. This headspace sheds light on the role of artificial intelligence (AI) in DeFi.

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July 10, 2023
Jul 10

Deep-dive Q&A session continued to peel back the layers of the complex world of DeFi. This headspace sheds light on the role of artificial intelligence (AI) in DeFi, the imperative for user-friendly tools, and the power of collaboration in accelerating blockchain advancements. Here are the key takeaways:

**Kudos to KyberSwap for providing us with such a vibrant and informative space to converse**

AI Meets DeFi: A Vision for the Future

One exhilarating topic discussed was the fusion of AI with DeFi. The speakers envisioned AI-driven interfaces that can generate highly personalized results based on user criteria, thereby encouraging DeFi’s mass adoption. However, they acknowledged the need to develop more user-friendly tools, given the complexity of AI-based interfaces.

The panelists stressed the potential of AI to decode user queries and guide them step-by-step, making the vast universe of DeFi information more digestible for both new and existing users.

On-Chain Data Analysis: Deciphering the Narrative

The panel also grappled with the issue of understanding the story behind on-chain data analysis. While many can view on-chain data, not all can recognize transaction trends or perform in-depth analysis. Given the heightened interest in on-chain analysis due to recent events, the speakers underscored the importance of verifying on-chain activities instead of blindly trusting the data.

“Don’t trust, verify. The collapse of centralized entities over the last year has increased the demand for transparency and in turn, on-chain analysis amongst participants in the space. As more users come into the space and carry out transactions on-chain, the importance and value of on-chain analysis will grow alongside it. Whether you’re a regulator, investor, operator or a consumer, familiarity with on-chain analytics can benefit you.”
- Martin, Data Journalist, Nansen |

The Transparency Revolution in DeFi

The conversation around in-depth on-chain analysis and aggregation underscored the need for DeFi protocols to disclose their addresses publicly. A lack of transparency in this aspect was perceived as a potential barrier to progress.

“Undeniably, DeFi has the potential to draw the next billion users into the on-chain world. But it’s a process that needs careful thought and execution. The charm of DeFi isn’t merely its technical prowess or the excitement of innovation, but its promise to deliver a truly inclusive financial system. For this vision to materialize, we must ensure that accessibility is coupled with transparency, education, and insightful data. In this vein, we should strive to create an ecosystem that not only appeals to the tech-savvy early adopters but is also welcoming and comprehensible to those new to the space. As we cultivate a data-rich environment that supports informed decision-making, we inch closer to a future where DeFi becomes the norm, not the exception.”
- Jason French, Head of Business, Blockpour |

Collaboration: The New DeFi Paradigm

The necessity and advantages of collaboration were reiterated, with the panelists recognizing the challenge of any single app or platform dominating all DeFi developments. This was viewed as a unique opportunity not present in traditional web environments.

Enhancing DeFi Adoption

Despite the advancements, the panel recognized the significant amount of work remaining in the DeFi space, with a specific emphasis on education and accessibility of information.

“Making it incredibly easy to onboard to DeFi and reducing the risks of hacks and scams is very important. We shouldn’t be onboarding people and have mass adoption to an ecosystem which isn’t ready for 1bn users and where funds can be stolen and exploited irreversibly. Alongside UX there’s also critical infrastructure which needs to be built in order to get there.”
- Jaimin, Founder of Caddi |

AI’s Potential Impact on DeFi and Blockchain

Lastly, the conversation touched on AI’s potential influence on DeFi and blockchain. The primary use of AI, as per the speaker, is in synthesizing vast volumes of data from the blockchain and condensing it into meaningful insights for users. The predictive analytics capabilities of AI could considerably benefit DeFi platforms, offering an exciting direction for the industry’s future.

Dissecting the Future of Decentralized Finance: AI in DeFi and Blockchain

The dialogue spanned from exploring AI’s potential in optimizing and customizing DeFi experiences to addressing challenges in data analysis and automation.

AI: The Game Changer in DeFi

Incorporating AI into blockchain analysis platforms can revolutionize the user experience in DeFi. The potential role of AI in automating tasks was a crucial point of discussion, considering the estimate that automation could potentially handle around 40% of tasks across all sectors. This figure could be higher for the financial sector and DeFi in particular due to the nature of tasks such as identity verification and standardized data handling.

Two primary areas where AI could make significant contributions are optimization, enhancing the efficiency of processes, and customization, personalizing the user experience. The panelists identified the goal of using AI to streamline user transactions, making the whole process more user-friendly.

Interpreting Data with AI: A Game of Art and Science

The conversation also touched on the role of AI in data interpretation, particularly in the context of tokens and NFTs. This application of AI extends to data collection and analysis, painting a broad picture of its potential use in DeFi.

The convergence of AI and blockchain offers a fascinating vista full of opportunities, challenges, and advancements. As DeFi continues to evolve and grow, the role of AI becomes increasingly central, offering a pathway toward optimization, personalization, and broadened adoption. This series, “Will Defi tools unlock the next 1B users on-chain?” has aimed to shed light on the complexities and potential of DeFi and blockchain, opening a dialogue around these revolutionary technologies. As we continue to explore the bounds of what’s possible, the importance of collaboration, education, and transparency remains paramount.

By keeping these imperatives at the forefront, we can ensure a promising and inclusive future for DeFi and blockchain technologies.

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