【Introduction to DeFAI】What is DeFAI, the New Trend of DeFi + AI? / Overview of DeFAI and Prediction of Noteworthy Projects and Outlook

The next bubble of AI agents will be the DeFi + AI DeFAI market!

Good morning.
Mitsui from web3 researcher.

Today we summarize the DeFAI, which has been a hot topic of discussion over the past week.

What is DeFAI
Hot Projects in the DeFAI MarketThe outlook for DeFAI and projects of personal interest

What is DeFAI

DeFAI is a coined term combining DeFi and AI, and as the name suggests, combining AI with DeFi creates a new experience.

With the bubble of AI agents, ai16z, Virtual, aixbt, Zerebro, and others that attracted attention in the early days reached a certain market capitalization, and more practical use cases were required, the area of DeFAI, combining DeFi and AI agents, began to attract attentionDeFI is a combination of DeFi and AI agents.

This area has long been a focus of attention among the possibilities for AI agents, and has been mentioned in terms such as AgentFi and DeFi 4.0, but now the word "DeFAI" has caught on and is being used in many places as a kind of buzzword.DeFAI" is a buzzword that is being used in many places.

Probably the first to start using it was Daniele, who runs the DeFAI project called Hey Anon, described below.I explained the concept of DeFAI as a new era of DeFi and my own Hey Anon in my own X article.

https://x.com/danielesesta/status/1875512495856619548

This post was posted on January 4, and it has been about a week since then, but I feel that the word "DeFAI" is starting to catch on.

Let me first explain the three specific use cases mentioned in this post as definitions of DeFAI.

(1) AI as an interface to DeFi

One of the biggest headaches for both novice and experienced DeFi users is the complexity of executing transactions across multiple protocols.Typically, you will need to

1. Access the appropriate decentralized application (dApp).

2. Connect your wallet (Metamask, Ledger, Phantom, etc.).

3. Enter transaction details.

4. Confirm (and possibly reconfirm) the transaction.

This process can be tedious and error-prone.This is especially true if you are operating multiple DeFi platforms simultaneously.However, using an AI-driven interface greatly simplifies this workflow.Instead of manually clicking through various UIs and carefully validating contract addresses, natural language commands such as "exchange 3ETH for USDC" or "provide liquidity to ETH-USDC pool" can be used.

Behind the scenes, the AI solution would

1. Analyze requests,

2. Find the best liquidity source

3. Generate the relevant transaction data; and

4. signing requests using a wallet of your choice (managed or self-managed, such as Ledger or Phantom).

DeFAI effectively automates the construction of transactionsand leaves only the final signature with the user, dramatically improving the user experience and eliminating many of the friction that keeps peopleIt eliminates many of the frictions that keep people from getting to DeFi.This is a huge leap forward in making DeFi accessible to everyone, allowing users to focus on why they want to trade, not how they want to trade.

(2) DeFi Agents: Autonomous Transaction Execution

While AI-driven interfaces streamline user input and generate transactions for manual approval, the next level of integration goes a step furtherand autonomousDeFi Agents will be created.These specialized AI agents control hot wallets and can execute complex multi-step strategies all from a single prompt, using the same natural language to transaction infrastructure.

Suppose we issue the following command.