Artificial Intelligence (AI) has entered the cryptocurrency space in the form of AI agents, trading bots, automated risk analysis, and more.

Written by: Arthur Azizov

Translated by: Block unicorn

The world is facing a new technological race, and the development of artificial intelligence has become a national priority. The recently launched "Stargate" project in the United States is a strong testament to this trend.

Although Trump's presidency is still in its early stages, we can already see a technology-centric trend forming, with plans to invest $500 billion in AI infrastructure.

At the same time, this technological boom will also reshape another industry—cryptocurrency.

Artificial Intelligence (AI) has entered the cryptocurrency space in the form of AI agents, trading bots, automated risk analysis, and more.

The question is not whether AI will change cryptocurrency—because it already is.

The real question is—what does this mean for cryptocurrency and blockchain in the long run?

Will AI's involvement strengthen this field, or will it undermine the decentralization principles that the cryptocurrency community values?

Here are my thoughts.

The Current State of AI and Cryptocurrency—The Shift Has Begun

As it stands, I believe AI's presence in cryptocurrency has not gone too far—it can be said that it is still in its "infancy."

But this state will not last long—progress is happening rapidly.

The industry is moving beyond simple trading bots. AI is now being used to drive market-making strategies and risk assessments.

We have even seen cases of AI-driven decentralized venture capital.

Projects like Moby AI, Griffain AI, and HeyAnonAI are becoming increasingly rich—although these are just early iterations of AI-based cryptocurrency financial intelligence, they have already surpassed human traders in speed and efficiency.

As AI models grow in complexity and gain greater autonomy, I believe they will soon no longer just follow market trends—they will shape these trends.

Future Prospects

The next few years will redefine what it means to participate in cryptocurrency, with AI at the core of this transformation, bringing changes across all domains.

Autonomous AI trading agents are already optimizing market strategies in real-time, with speed and accuracy far exceeding human capabilities.

The more advanced these bots become, the greater the competitive advantage for investors and traders using them.

In the DeFi compliance space, AI-driven tools will be key to maintaining security.

Fraud and illegal trading have always been concerns, but AI-driven monitoring systems can analyze activities on the blockchain network and detect suspicious patterns in real-time.

This will enable them to flag potential risks before they escalate, making the space safer.

At the same time, AI-integrated DeFi services will simplify lending by removing human intermediaries.

AI models can automatically match borrowers and lenders and dynamically adjust interest rates based on market conditions.

All of this can be done without human involvement.

I can also see on-chain AI agents playing a significant role in governance.

They can provide real-time market insights, manage portfolios, and even participate in DAO decision-making by implementing more data-driven governance choices.

Beyond financial applications, AI can also address the long-standing inefficiencies in blockchain.

For example, a major issue with PoW (Proof of Work) networks is high energy consumption.

AI can tackle this problem by analyzing and predicting network demand, dynamically adjusting energy consumption to reduce waste and optimize performance.

Additionally, AI can facilitate "sharding," where blockchain data is distributed across multiple nodes, allowing for parallel processing and faster transaction times.

This can help effectively scale blockchain networks, which is a key step for cryptocurrency to gain wider adoption.

Although today's AI is still just a supportive tool that cannot truly replace humans in making effective decisions, this situation will not last.

In my view, AI has the potential to evolve into a dominant force, actively shaping the future of DeFi.

Risks—Will AI Undermine Decentralization?

While AI promises to significantly enhance efficiency, it is undeniable that it is not without risks. One of the biggest threats I foresee is AI-driven market manipulation.

Imagine a scenario where AI-driven trading firms control DeFi, making it harder for retail investors to compete.

We have already seen this phenomenon in TradFi (traditional finance), where high-frequency trading firms use AI to exploit market inefficiencies.

The same situation could occur in DeFi, leading to an arms race among AI bots, while human traders remain at a disadvantage and ultimately get left behind.

That said, DeFi does have certain advantages in this regard. Its high spreads and trading fees serve as natural barriers preventing AI from immediately dominating.

Since trading bots in DeFi must contend with significant costs, it creates a chicken-and-egg situation.

As long as fees and spreads remain high, AI-driven trading cannot easily scale. On the other hand, if trading volumes are low, these costs will remain elevated.

This can effectively prevent AI-driven market manipulation, as everyone in DeFi must operate under equal conditions.

Additionally, there are concerns regarding AI-generated smart contracts. AI can write complete contracts, but what happens if these contracts contain hidden vulnerabilities?

Hackers could exploit AI-generated code, using adversarial inputs to bypass security audits.

A compromised AI-generated contract could mean millions of dollars in lost crypto assets.

DeFi developers must take this threat very seriously—you should never rely on AI to write your code.

The Future of Artificial Intelligence and Cryptocurrency

The AI race is not just a competition for dominance between nations—it is a real battle between open-source AI and closed-source AI.

The launch of DeepSeek R1 has already laid the foundation for a significant shift in this regard.

It breaks the traditional assumptions about AI development, proving that the billions of dollars in budgets from large tech companies are not always a necessary condition for breakthrough innovation.

AI development is no longer centralized, and I believe open-source models can align well with the values of cryptocurrency, rather than a more centralized approach.

The idea that AI will take over the cryptocurrency space is no longer a controversial issue. The only question now is how quickly it will happen.

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