The synergy between blockchain and artificial intelligence (AI) holds the promise of mutually reinforcing each other, adding increased excitement and diversity to both fields.
A recent study conducted by TenSquared Capital underscores the possibilities of AI in elevating speed and efficiency within the Web3 domain.
In essence, the collaboration between AI and Web3 possesses the potential to address complex global challenges. Furthermore, it can automate critical functions, enhance data-driven decision-making, and enhance trust and transparency for users.
The research team of the growth equity firm delved into particular domains where AI applications could bring greater structure to the world of Web3.
AI’s Power in Cross-Language Coding
AI tools, such as ChatGPT and Github Co-Pilot, are poised to have a significant impact on the crypto industry by simplifying the process of writing code.
These AI tools empower developers to engage with various blockchain platforms, even if they lack expertise in a specific programming language.
For instance, if a developer is well-versed in Solidity but needs to code in Rust for Cosmos, ChatGPT/Co-Pilot can step in to assist with the translation process, as highlighted in TenSquared’s report.
“AI-driven code-writing tools reduce the entry barriers into blockchain development and enable developers to produce code at a much faster pace,” the report emphasized.
Moreover, AI doesn’t just accelerate the code-writing process; it also has the potential to enhance the overall infrastructure of blockchain systems.
This technology has the potential to create intelligent smart contracts and consensus protocols capable of making real-time decisions based on on-chain data. Moreover, it can enhance the security of Web3 by implementing AI-driven detection systems, thereby ensuring smarter and more efficient decisions within smart contracts.
Several startups have already embraced this trend. For example, Oraichain utilizes AI-powered APIs to lay the foundation for intelligent smart contracts and advanced decentralized applications (DApps).
Furthermore, DApps can leverage on-chain AI for tasks such as data analysis and automation.
Experts foresee a future where AI agents will primarily facilitate cryptocurrency payments. Large language models (LLMs) can adeptly manage transactions through crypto wallets and seamlessly interact with smart contracts and DeFi protocols, streamlining the payment process effectively.
Boosting Web3 Security
Researchers and startups are actively exploring AI-based consensus methods, which play a crucial role in ensuring the security and scalability of blockchain networks.
For instance, Velas is a notable example as they are in the process of developing an AI Delegated Proof-of-Stake system.
Simultaneously, Inery is working on innovative methods to enhance block validation by focusing on uptime as a key metric.
AI also contributes significantly to fortifying Web3 security, playing a pivotal role in defending against cyberattacks and reinforcing the overall security infrastructure of blockchains. This is crucial because security concerns have been a significant obstacle for users entering the crypto space.
Just in January, the Web3 ecosystem suffered a $127 million loss from hackers across 19 different incidents. Furthermore, in the previous year, cybercriminal groups managed to siphon off over $1 billion from the crypto industry, as reported by Chainalysis.
AI in Credit Scoring
Artificial intelligence has the potential to revolutionize the world of decentralized finance (DeFi) by leveraging past lending data to establish credit scores, thereby enhancing the precision of loan evaluations. An excellent example of this is Spectral’s MACRO Score, an on-chain credit rating system driven by cutting-edge machine learning algorithms designed explicitly for DeFi lending.
Furthermore, AI, coupled with trading bots and predictive analytics, can empower traders to make more informed decisions and capitalize on market trends. Platforms such as 3Commas provide crypto trading bots tailored for automated trading strategies, opening up opportunities for traders to optimize their trading outcomes.
Interactive Gaming
Generative AI has the potential to add a personalized touch to gaming narratives and characters. For instance, Inworld AI is at the forefront of crafting AI-driven non-playable characters (NPCs), elevating the immersive experience in games like WebKinz. ASM, a pivotal component of Futureverse, is actively developing a platform that enables user engagement with AI Agents within gaming realms.
In addition to gaming, AI can significantly enrich NFT platforms and Web3 social networks by tailoring content and offering pertinent product suggestions to users based on their preferences and behavior.
Nonetheless, Ethereum co-founder Vitalik Buterin recently cautioned that the most formidable obstacle in integrating crypto and AI is the creation of a unified, decentralized AI system that can earn the trust of other applications across the board.
