Artificial Intelligence (AI) is changing the way we interact with the world today, and its impact on decentralized finance (DeFi) is also beginning to take form in what we call DeFAI.

DeFAI is a term reflecting the fusion of AI technology and DeFi protocols. It focuses on integrating AI capabilities into DeFi applications and enhancing Web3 tools' functionality and user experience. This could be applied to financial management, decision-making, and user engagement tasks.

Today, the DeFi space offers users decentralized financial tools that enable them to manage their finances without the need for third parties. However, the complexity of DeFi platforms has created significant barriers to mass adoption. 

Many users struggle to understand blockchain-specific concepts such as smart contract interactions, and do not know how to navigate across multiple chains and platforms to perform basic token swaps. Users are also prone to scams and may not be able to grasp precisely how to keep their funds secure, which makes adoption in the DeFi space relatively stagnant. This makes centralized exchanges a more appealing option for users to interact with cryptocurrencies, underscoring the ethos of blockchains in the first place. 

The introduction of AI to DeFi can simplify user interactions with DeFi. Through AI’s machine learning algorithms, users may be able to have more streamlined interactions with DeFi protocols, improving the user experience. Additionally, AI systems may help identify potential scams and suspicious transactions, making the DeFi space safer for its users. 

According to raz.dmt, in the near future, AI’s integration with DeFi will allow users to purchase crypto as quickly as they can order food from their apartments. Instead of having to navigate multiple platforms, AI will enable users to buy a token directly from a web page, identifying the correct chain and token contract and ensuring the transaction is executed securely. 

DeFAI on Arbitrum

AiSweat.Shop 

AiSweat.Shop is a launchpad focused on integrating AI agents with DeFi functionalities. Rather than giving AI agents basic Web3 wallets, AI Sweatshop flips the narrative by using AI to enhance existing DeFi products. This approach enables users to leverage AI for advanced  operations like yield farming, liquidity management, and even automated trading.

Building on Arbitrum was a deliberate choice for AiSweat.Shop. Although the team was initially drawn to Solana or Base due to the active AI liquidity there, it ultimately chose Arbitrum for its thriving DeFi ecosystem and strong community of early adopters.

"Deploying on Arbitrum made sense because it’s the heart of DeFi innovation. The community is active, and foundational projects like GMX continue to thrive here. It was a no-brainer to bring our AI-driven DeFi solutions to a chain with such a vibrant ecosystem," Kate W, a core contributor of AiSweat.Shop said.

AI Sweatshop is collaborating with leading DeFi projects on Arbitrum, including Camelot and GMX, to explore how AI can drive innovation in liquidity management, yield optimization, and beyond. They aim to deliver user-friendly tools and interfaces that allow individuals to maximize returns with minimal effort, showcasing the transformative potential of AI in DeFi.

Kudai

GBC emerged in 2021, initially launching as an NFT collection that brought together the GMX community. The company was founded by three longtime friends with complementary expertise: XM serving as Chief Executive Officer, feed them as Head of Product and Strategy, and Vee as  Chief Growth Officer. The team has previous experience working on notable projects in the web3 space, including Pudgy Penguins, Vertex Protocol, GMX and Juice Finance.

Kudai and Kaigen are GBC’s two flagship products. Kudai is an autonomous AI agent designed to optimize capital in real-time. It evolves through distinct phases, from student to investor, trader, and redistributor. Kudai is working towards advancing into its next phase, evolving from passive investment to active market participation with enhanced strategies and increased autonomy.

Following Kudai's success, the GBC team created Kaigen, a platform democratizing AI-powered DeFi investment management. Kaigen allows users to create personalized AI agents that continuously execute, optimize, and adapt investment strategies, operating directly from users' wallets without intermediaries.

"AI is not just transforming DeFi. It is revolutionizing how we interact with the web as a whole. We are witnessing a paradigm shift where intelligent agents are becoming intermediaries capable of analyzing, optimizing, and automating complex processes, making systems more efficient and accessible," Vee said. 

GBC decided to build with Arbitrum because of its mature DeFi ecosystem, particularly its synergy with GMX. Vee said Arbitrum's technical capabilities, including fast and cost-effective transactions, robust security, and compatibility with essential DeFi infrastructure, influenced the selection. Arbitrum's support through initiatives like the Trailblazer AI G further validated this decision, demonstrating alignment with GBC's vision for AI-enhanced DeFi.

Aikaverse 

Developed by the Fanko team, Aikaverse allows X users to buy and sell crypto directly from the platform without needing a wallet or website. Users can interact with an AI agent to perform transactions seamlessly.

“The best way to abstract the whole experience of people starting to use crypto is by integrating AI technology. By simplifying complex DeFi processes into a few intuitive steps, AI has the potential to make decentralized finance accessible to everyone, not just crypto natives,” Raz.dmt said.

The team decided to build on Arbitrum because of its low fees, high transaction speeds, and developer-friendly environment, raz.dmt said. Most importantly, however, the Aimechain team believed that Arbitrum was the home of DeFi innovation and that being part of this ecosystem would allow Aimecswap to integrate AI into DeFi where it mattered the most. 

The Aikaverse team is gearing up for several exciting new developments, including launching a Telegram-based AI agent for cryptocurrency transactions and preparing for the public launch of its token, PTE. 

Get involved today!

The DeFAI space on Arbitrum is growing rapidly. Whether you’re a developer or entrepreneur, or if you’re just interested in learning more about the space, now is the time to contribute and learn more about the growing DeFAI space on Arbitrum. You can start building on Arbitrum today, integrate with existing projects, or create something entirely new.

AI innovators on Arbitrum can now take advantage of Trailblazer, a $1,000,000 grant program administered by The Arbitrum Foundation that is dedicated to funding AI builders on Arbitrum.

If you want to get involved, you can contact Arbitrum today via our discord channels, follow us on X, or read the Arbitrum docs to learn more.