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DeFAI is the new Decentralized Finance: What is DeFAI? Overview of related projects
Author: 0xJeff, Steak Studio; Translation: Golden Finance xiaozou
DeFi has always been the pillar of Web3. It is DeFi that showcases the practical use of blockchain, providing us with the necessary tools for instant remittances worldwide, on-chain asset investment, intermediary-free lending, and strategies across DeFi protocols. These are all attainable financial freedoms.
More importantly, DeFi addresses real-world problems. It enables those without traditional bank accounts to access financial services, eliminates intermediaries, and operates around the clock, creating a truly global inclusive financial system.
But let's face an obvious problem together: DeFi** is really complicated**.
Setting up a wallet, managing gas fees, and learning to avoid fraud in a rampant environment - it’s not very friendly. The increasing number of L1, L2, and cross-chain ecosystems only makes things more complicated. For most people, the entry barrier is too high.
It is precisely this complexity that hinders the development of DeFi, but DeFAI is starting to change that.
What is DeFAI?
DeFAI (DeFi + AI) makes DeFi accessible. DeFAI utilizes artificial intelligence to simplify complex interfaces, eliminating the barriers that hinder ordinary people's participation. Imagine a world where managing your DeFi portfolio is as easy as chatting with ChatGPT.
The first wave of DeFAI projects has now emerged, mainly focusing on three areas:
1**, Abstraction Layers **
The purpose of the abstraction layer is to make DeFi more accessible by hiding the complexity of DeFi behind an intuitive interface. The abstraction layer allows users to interact with DeFi protocols using natural language commands without having to use complex dashboards.
Before the emergence of artificial intelligence, abstract layers like intent-based architecture simplified trade execution. Platforms such as CoWSwap and SYMMIO allow users to obtain the best pricing in decentralized liquidity pools, addressing the issue of liquidity fragmentation, but they do not solve the core problem: DeFi is still daunting.
Now, artificial intelligence solutions are filling this gap:
I personally use Slate, which is still in its early stages and has not released a token yet, but I like its automation features. I mainly use it to set conditional trades, such as selling 25% of my position if the market cap of [xxx] reaches $5 million, or buying $5,000 worth of tokens if [xxx] hits the price of [xxxx].
Wayfinder Foundation is another interesting application worth paying attention to. It is a behemoth being developed by the PRIME / Parallel team.
2**, Self-Trading Agent**
Why spend hours digging for alpha, manually executing trades, and trying to optimize your portfolio, instead of letting agents handle it? Autonomous trading agents are elevating the concept of trading robots to a new level, transforming them into dynamic partners that can adapt, learn, and make smarter decisions over time.
It needs to be said that trading bots are not something new. They have been executing predefined actions based on static programming for many years. But agents are fundamentally different:
This niche industry is rapidly developing. Initially, it was purely for entertainment purposes, but now it has shifted to practical, profit-driven tools that can help users trade more effectively. However, there is an important challenge here: how do you verify that an "agent" is not just a robot, but even a person operating everything behind the scenes?
This is where DeAI****infrastructure comes into play.
DeAI**'s Role in Verification Agents**
Key infrastructures like Trusted Execution Environment (TEE) ensure that agents run securely and are not tampered with.
For example:
Why is this important?
When self-custody agents start handling a large amount of TVL—imagine 100 million dollars or more in TVL—users will have extremely high assurance requirements. They need to understand how the agents manage risks, verify the framework under which they operate, and ensure that their funds do not end up flowing into just any meme coin.
This field is still in its early stages, but we see some promising projects exploring these verifiable tools. This should be kept in mind with the development of DeFAI.
The top autonomous trading** agent**** projects that I am closely watching**
As follows:
**(1)**Almanak
Almanak provides users with institutional-grade quantitative AI agents, addressing the complexities, fragmentation, and execution challenges of DeFi.
The platform forks the EVM chain, taking into account the unique complexities of MEV, gas costs, and transaction order, to execute Monte Carlo simulations in real-world environments. It uses TEE (Trusted Execution Environment) to ensure the privacy of strategy execution and the security of alpha insights, and supports non-custodial fund handling through the Almanak wallet, allowing for precise permission authorization for agents.
The Almanak infrastructure supports the conception, creation, evaluation, optimization, deployment, and monitoring of financial strategies. The ultimate goal is to enable these agents to learn and adapt over time.
Almanak raised $1 million on LEGION, receiving a significant amount of oversubscription. The next steps include a beta release and a deployment/initial strategy for beta testers. It will be interesting to observe the performance of these quantitative agents.
**(2)**Cod3x / Big Tony
Cod3x, developed by the Byte Mason team (known for their work with Fantom/SonicLabs), is a DeFAI ecosystem designed to simplify the creation of trading agents. The platform offers a no-code development tool that allows users to create agents by specifying trading strategies, personalities, or even tweet styles.
Users can access any dataset and formulate financial strategies in minutes using APIs and strategy libraries. Cod3x integrates the Allora network, leveraging its advanced ML price prediction model to enhance trading strategies.
Big Tony is the flagship agent trading based on the Allora model, entering and exiting according to its predictions. Cod3x is working hard to create a thriving ecosystem of autonomous trading agents.
One point worth noting is Cod3x's liquidity method. Unlike the common alt: alt LP structure promoted by Virtuals, Cod3x uses a **stablecoin: alt LP structure driven by Cod3x's own CDP (Collateralized Debt Position) cdxUSD.
Compared to the volatility of the alt:alt trading pairs, this adds more stability and confidence for LPs (liquidity providers) when providing liquidity.
Cod3x also has its own DeFi primitives, such as Liquidity AMOs and Mini Pools, which deepen liquidity and add more functionality to the agents in its ecosystem/ DeFi building blocks.
Note:
Axal / Gekko AI——Axal's auto-tuning product, which handles complex multi-step encryption strategies via agents. Gekko integrates the auto-tuning feature. I look forward to seeing how the integration of Gekko with auto-tuning performs data-driven trading.
ASYM——ASYM is described by many as the "cheat code" for meme coin trading, capable of analyzing large datasets from blockchain and social media to predict meme coin trends. ASYM has consistently outperformed the market. ASYM has demonstrated a return rate of 3-4 times through backtesting. I am very much looking forward to seeing its performance in live trading.
Project Plutus——I really like the name PPCOIN.
3**,AI-driven****dApp**
AI-driven dApps are a promising emerging field in the DeFAI sector. They are fully mature decentralized applications that integrate AI or AI agents to enhance functionality, automation, and user experience. Although this field is still in its early stages, some ecosystems and projects have already begun to stand out.
One of the most active ecosystems in this field is the Mode network, which is an L2 ecosystem aimed at attracting high-tech AI x DeFi developers. Several teams dedicated to cutting-edge AI use cases are already on Mode:
The core of the ecosystem is the native token MODE. Token holders can stake their MODE tokens to obtain veMODE, which provides airdrops from AI agents, access to project whitelists, and additional ecosystem benefits. Mode positions itself as an innovation hub for AI x DeFi, with its influence expected to grow significantly by 2025.
Additionally, Daniele published the DeFAI theory through HeyAnon, causing a sensation.
He announced that HeyAnon is working on the following tasks:
The market reacted enthusiastically, with the market capitalization of the ANON token soaring from $10 million to $130 million. Daniele seems to have brought back the excitement of TIME Wonderland, but this time with a stronger foundation and a clearer vision (hopefully).
In addition to these two ecosystems, many teams are building their own AI dApps. Once the main ecosystems around these dApps are formed, I will share more content in the future.
Conclusion
DeFAI is transforming DeFi to make it smarter, simpler, and more accessible.
With the abstraction layer simplifying user interactions, autonomous trading agents managing portfolios, and AI-driven dApp optimization use cases, we are witnessing the dawn of a new era.
It's not a reenactment of the DeFAI Summer of 2020, but the DeFAI Summer of 2025!