🧞 Can't understand DeFAI? Check this guide

DeFAI 101

Feb 03, 2025

Gm and happy Monday frens🖖

The DeFAI narrative has been buzzing since the beginning of the year. Some say it's the real future of DeFi and others remain sceptical that it's just another passing fad.

We want to help you understand this better, so we’ve compiled a bunch of awesome longreads from 0xJeff to provide a more general overview.

So, how DeFAI came to be and what the future of it:

🩰 The only events you should care about
🤖 DeFAI overview
🧵 India, Thailand and 100M$ investment
📰 News

📅 What you should do this month

We've got 4 events this month!

In Hong Kong we'll be hosting our next Telegram Builders Day (Feb 17th) with topics like user acquisition for Telegram apps, successful viral case studies and how to build successful Telegram games!

And in Denver we'll be hosting 3 events:

🥩 Restaking & DeFAI Day (Feb 25th) - expect a day packed with keynotes, workshops, and panels diving deep into the latest in the restaking space.

🧩 Modular & L2 Day (Feb 26th) - side event for web3 developers, tech founders, and enthusiasts seeking in-depth of modular stack and layer 2 scaling solutions.

👾 Agents Day – AI x Web3 (Feb 25th) - where visionaries, innovators, and pioneers will gather to explore the powerful convergence of AI and Web3. Together, we will push the boundaries of what’s possible in building a decentralized, transparent, and equitable future for AGI.

🛠️ Deep-dive: DeFAI 101

Why DeFAI narrative is still alive and going to be for some time.

Great alpha from 0xJeff!

To fully understand come to our Restaking & DeFAI Day on Feb 25th during ETHDenver! Catch speakers from EigenLayer, EtherFi, Symbiotic, Mode, HeyElsaAI, Hyle, Giza, and Kern.

2024 for AI Agents

2024 has been a pivotal year for AI agents, with rapid advancements in their capabilities and adoption. The year began with a surge in interest, fueled by innovative projects that pushed the boundaries of AI integration across various domains.

Conversational AI agents gained traction, evolving beyond simple chatbots into autonomous entities capable of interacting across multiple platforms.

AI-powered trading agents revolutionized the financial sector, executing real-time trades and optimizing portfolios with machine learning models. Meanwhile, the gaming and entertainment industries saw the emergence of AI-driven content creators, immersive NPCs, and virtual influencers, further blurring the lines between artificial and human creativity.

The open-source movement played a significant role in AI development, with decentralized communities contributing to frameworks that enable more accessible AI training and deployment.

Companies leveraged AI for security, governance, and infrastructure optimization, setting the stage for a more autonomous and efficient digital landscape.

What is DeFAI

DeFi has long been a cornerstone of Web3, providing a trustless, permissionless financial ecosystem. However, the complexity of navigating DeFi has limited mainstream adoption. DeFAI (DeFi + AI) emerges as the next evolution, utilizing artificial intelligence to simplify and enhance DeFi interactions.

DeFAI projects primarily focus on three key areas:

Abstraction Layers – AI-powered interfaces that eliminate the need for technical expertise, allowing users to interact with DeFi protocols through natural language or automated execution.
Autonomous Trading Agents – AI-driven bots that analyze market trends, predict price movements, and execute trades, optimizing yield strategies with minimal human intervention.
AI-Powered dApps – Decentralized applications integrated with AI to provide enhanced analytics, risk assessment, and automated financial services.

Leading DeFAI platforms are working on bridging the gap between traditional finance and crypto, making DeFi more intuitive and efficient. The fusion of AI with decentralized finance has the potential to redefine how users engage with financial ecosystems.

DeFAI s still alive

Despite market fluctuations, DeFAI remains one of the strongest narratives in the Web3 space. While other AI agent sectors have faced downturns, DeFAI continues to attract investment and innovation. The performance of key projects in the abstraction layer category, such as Orbit and HeyAnon, showcases the resilience and demand for AI-enhanced DeFi solutions.

Major developments include:

Cross-chain automation – AI agents that seamlessly operate across multiple blockchain networks, reducing friction for users managing assets on different chains.
Data-driven execution – AI-powered insights that improve trading strategies, portfolio management, and risk mitigation.
Enhanced user experience – AI-powered DeFi platforms that offer personalized financial planning, automated asset management, and intuitive investment tools.

With DeFAI proving to be one of the most robust sectors in Web3, developers and investors are doubling down on its potential. As AI continues to advance, the ability of DeFAI platforms to offer seamless, automated, and intelligent financial services will only strengthen.

The rise of trading agents

The emergence of autonomous trading agents marks a new era in financial markets. Unlike traditional trading bots, these AI agents adapt to market conditions, learn from historical data, and execute complex strategies in real-time.

The development of autonomous trading agents has been driven by:

Machine learning advancements – Enabling agents to predict market trends, optimize entry and exit points, and manage risk dynamically.
Verifiable AI execution – Transparency measures, such as zkML (zero-knowledge machine learning) and TEEs (trusted execution environments), ensure AI trading strategies are executed as intended without human interference.
Integration with DeFi protocols – AI trading agents operate on decentralized exchanges, interacting with lending, staking, and yield farming protocols to maximize returns.

Projects like Cod3x and Almanak are leading the charge, providing infrastructure for traders to deploy and monitor AI-powered strategies. The ability of these agents to analyze sentiment, detect anomalies, and execute trades faster than any human trader gives them a competitive edge.

As the market matures, autonomous trading agents will play an increasingly dominant role in DeFi, reshaping how individuals and institutions interact with financial markets. The future of DeFAI is bright, and the integration of AI with decentralized finance is just beginning.

Don't forget to register for the Restaking & DeFAI Day on Feb 25th!

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