AI and Crypto Assets: Technological Innovation and Future Challenges

Currently, the world is engaged in a new technological competition, and the development of artificial intelligence has become a key focus for various countries. The recent project launched by the United States is a strong testament to this trend.

We can observe that a trend centered around technology is forming, planning to invest huge amounts of money in artificial intelligence infrastructure.

At the same time, this wave of technological excitement is also reshaping the Crypto Assets industry.

Artificial intelligence has infiltrated the Crypto Assets field in various forms, such as intelligent agents, trading algorithms, and automated risk assessment.

The key issue is not whether artificial intelligence will change Crypto Assets—because this transformation is already underway.

What really needs to be considered is - what does this mean for Crypto Assets and blockchain technology in the long run?

Will the involvement of artificial intelligence enhance this field, or will it undermine the decentralized principles cherished by the Crypto Assets community?

Here are some personal insights.

The Current State of AI and Crypto Assets - The Transformation Has Begun

As of now, the application of artificial intelligence in Crypto Assets is still in its infancy, one could say it is still in the "cradle phase".

But this state won't 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 AI-driven decentralized venture capital cases.

Some AI-based Crypto Assets financial intelligence projects are continuously evolving—although these are just early attempts, they have already surpassed human traders in speed and efficiency.

As AI models improve in complexity and autonomy, I believe they will soon no longer just follow market trends—but will begin to shape these trends.

Future Outlook

The next few years will redefine what it means to participate in Crypto Assets, with AI becoming the core of this transformation, bringing comprehensive changes.

Autonomous AI trading agents have been optimizing market strategies in real-time, with speed and accuracy far exceeding human capabilities.

The more advanced these intelligent systems are, the greater the competitive advantage they provide to investors and traders who use them.

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

Fraud and illegal trading have always been the focus of the industry, but AI-driven monitoring systems can analyze activities in the blockchain network and detect suspicious patterns in real-time.

This will enable them to issue alerts before potential risks escalate, enhancing the security of the entire field.

At the same time, AI-integrated DeFi services will simplify the lending process by eliminating 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 intervention.

In addition, on-chain AI agents may also play an important role in governance.

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

In addition to financial applications, AI can also address the long-standing efficiency issues in blockchain.

For example, a major issue with proof of work (PoW) networks is high energy consumption.

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

Additionally, AI can facilitate the application of "sharding" technology, which distributes blockchain data across multiple nodes to achieve parallel processing and faster transaction speeds.

This can help effectively expand the blockchain network, which is a key step for the widespread adoption of Crypto Assets.

Although current AI is still mainly an auxiliary tool and cannot completely replace humans in making effective decisions, this situation will not last long.

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

Risk - Will AI Destroy Decentralization?

Despite the promise of AI to significantly increase efficiency, it is undeniable that there are also risks involved. One of the most foreseeable threats is AI-driven market manipulation.

Imagine a scenario where an AI-driven trading company controls the DeFi market, making it harder for retail investors to compete.

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

Similar situations may also occur in the DeFi space, leading to an arms race between AI systems, while human traders are at a disadvantage and ultimately marginalized.

However, DeFi still has certain advantages in this regard. Its high price differences and transaction fees serve as a natural barrier preventing AI from rapidly gaining dominance.

Due to the high costs that trading bots in DeFi must handle, a chicken or egg dilemma has arisen.

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

This actually prevents AI-driven market manipulation, as every participant in DeFi must operate under relatively equal conditions.

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

Hackers may exploit AI-generated code to bypass security audits using adversarial inputs.

A flawed AI-generated contract may result in the loss of millions of dollars in Crypto Assets.

DeFi developers must pay close attention to this threat - they should not rely excessively on AI to write code.

The Future of Artificial Intelligence and Crypto Assets

AI competitions are not just a contest for dominance between nations - the real battle is between open-source AI and closed-source AI.

The launch of several open-source AI models has become the foundation for significant changes in this area.

It breaks the traditional assumptions about the development of AI, proving that the enormous budgets of large technology companies are not the only way to achieve breakthrough innovations.

AI development is no longer centralized; open-source models may align more closely with the value philosophy of Crypto Assets, rather than a more centralized approach.

The idea that AI will dominate the Crypto Assets field is no longer a controversial issue. The only suspense now is how fast this process will occur.