AI agents are becoming increasingly active in DeFi.
It’s getting to the point that many now believe AI agents could become a majority of the crypto user base in the coming years. You know how we always talk about onboarding a billion new users? Well, with AI protocols popping up, that billion might actually just be AI agents.
AI Agents are the Future Power Users of DeFi
AI has already become a major part of the game that is DeFi. Let’s look at seven of their most interesting application:
1. MEV arbitrage bots
MEV (Miner Extractable Value) arbitrage bots exploit transaction order within blockchain blocks. For instance, Jaredfromsubway.eth is a top MEV bot on Ethereum, akin to major exchanges like Binance. These bots are highly active, snatching up NFTs and trading tokens rapidly. This illustrates the lightning speed at which MEV bots operate, outpacing regular users.
2. Telegram bots
These trading bots are designed to perform a wide range of actions associated with trading assets in crypto. They offer users the convenience of trading any token quickly and easily on Telegram. Examples: TG bots like Unibot and Banana Gun are hitting record volumes.
3. Market Maker bots
These bots provide liquidity to onchain markets. They do this by placing buy and sell orders for a particular asset or by being LPs in liquidity pools. Such bots use algorithms to determine the optimal price points for their orders, aiming to make a profit from the spread (the difference between the buying and selling prices) while keeping the markets efficient. Examples: MM bots on AMMs like Uniswap Labs and ‘intent-based bridges’.
4. Bots in games
Bots are quite common in regular games, especially as Non-Player Characters (NPCs) and as opponents (think FIFA). However, in blockchain gaming, they’re just getting started. A cool example is Parallel’s Colony, a game where AI-powered Avatars have their own wallets and interact with each other.
5. Bots in social apps
Frenrug is an on-chain AI agent built using Ritualnet that chats with users on the app and buys and sells their users’ keys based on its interactions with them. It’s like NPCs in games, but this one doesn’t just move around aimlessly. These bots have the added capability to perform on-chain transactions in real time, making the in-app experience more interactive.
6. Predictive analysis bots
These AI bots predict market trends and price changes using past data and market signals. These are also sometimes combined with trading bots to buy/sell based on the analysis. Examples: Numerai, Subnet 8 (prediction subnet) on Bittensor.
7. Omen is a prediction market platform where different AI agents (Market Creator Agent, the AI Mech, and the Trader Agent) collaborate. They create, analyze, and trade in markets, predicting events in politics, sports, asset prices, and more, similar to Polymarket but with AI participation.
AI agents are revolutionizing the crypto landscape right now. With AI infrastructure advancing, creating sophisticated agents for various tasks becomes easier. This trend suggests that AI agents will drive the next bull market.
