Author: Binance

Compiled by: TechFlow

Summary of key points

• The decentralized finance (DeFi) field is full of professional terms, complex operating procedures and potential scam risks, which makes novices feel at a loss and makes it particularly difficult to explore this field;
• The emergence of DeFAI simplifies the operation process by combining artificial intelligence (AI) and decentralized finance (DeFi), allowing users to complete DeFi operations through natural language instructions, thereby lowering the usage threshold for novices and veteran users;
• Additionally, DeFAI improves security by reducing human errors (such as entering the wrong wallet address) and helps users make smarter decisions through real-time data insights;

Entering the world of DeFi is like jumping into deep water without a life jacket. If you have ever been confused by terms such as staking, slippage, or gas fees and don’t know where to start, you are not alone. These unfamiliar terms, complex operating mechanisms, and cumbersome steps can make even technical experts feel overwhelmed.

While DeFi has great potential, its complexity sets a very high barrier for newcomers. This is where DeFAI, an innovative tool that combines AI and DeFi, comes into play. By simplifying on-chain interactions, DeFAI is expected to lower these barriers and make DeFi more friendly to everyone.

In this article, we will explore the main challenges of DeFi and how DeFAI can solve them.

Challenges of DeFi

Complexity of terminology and technology

The challenge of DeFi first comes from the large number of terms and complex technical concepts that need to be mastered. Terms such as slippage, gas fees, and cross-chain bridging are just the tip of the iceberg. To truly participate in DeFi, it is not enough to just know these terms, but also to understand more advanced concepts such as liquidity pools, yield farming, automated market makers, tokenomics, and so on.

These terms are not just buzzwords, but the core foundation of the DeFi ecosystem. For newcomers, understanding how liquidity pools support transactions, or how mining revenue rewards users through liquidity, is like taking an advanced finance course. Without these basics, the process of participating in DeFi becomes extremely complicated, which discourages many newcomers.

For example: Let's say you just deposited $1,000 on a cryptocurrency exchange (such as Binance) and plan to invest in a DeFi platform (such as AAVE). It sounds simple, but it is actually full of challenges. First, you need to buy a stablecoin (such as USDC); then, you need to transfer it to the correct blockchain network (such as Arbitrum) through a cross-chain bridge; then, you need to pay the gas fee for each transaction before you can deposit the funds into AAVE.

This process is not just a few simple steps, but a series of interrelated steps. For example, you need to choose the right cross-chain bridge, make sure there are enough native tokens in your wallet to pay for gas fees, and each step requires users to have certain technical knowledge and attention to details.

Even experienced users may find this complexity frustrating, so it’s no surprise that newcomers feel overwhelmed. DeFi’s steep learning curve is undoubtedly the main barrier that prevents ordinary users from entering this field, limiting its wider adoption.

Susceptibility to scams and vulnerabilities

While the decentralized nature of DeFi is one of its greatest strengths, it also presents a significant problem: there is no customer support or regulator to help resolve issues. When things go wrong, users are left to fend for themselves, which gives malicious actors an opportunity to exploit.

For example, let’s say your transaction fails due to insufficient gas fees. Not knowing what went wrong, you might go online to seek help. A scammer might pretend to be a helpful support agent and direct you to a so-called “blockchain repair” website, or trick you into revealing sensitive information like your seed phrase (the security phrase used to recover your wallet). Ultimately, your funds could be stolen without you even realizing it.

Without security, even a small mistake can have serious consequences. The lack of clear guidance makes the exploration of DeFi not only complicated but also full of potential risks, which discourages many people.

How DeFAI breaks down complexity

Among the many innovations that AI has used to drive the development of DeFi, Abstraction AI is an important tool that significantly lowers the barrier to use by simplifying the interaction between users and the DeFi ecosystem.

The core of abstract AI is to hide complexity. It focuses users' attention on core functions while encapsulating tedious operation steps in the background. In the use case of cryptocurrency, this means that users do not need to understand complex cross-chain bridging or staking operations, but complete all operations through an intuitive interface. This ability of AI makes DeFi easy for both novice and experienced users.

Simplify complex processes

One of the main goals of AI is to improve efficiency, solve complex problems, and make originally complex tasks simple. In DeFi, abstract AI takes on tedious operations, automating multi-step trading and staking processes so that users can complete operations without having to deeply understand technical details.

For example, Griffain is an abstract AI platform built on Solana that allows users to complete transactions, mint NFTs, manage wallets, and even quickly buy tokens based on preset conditions through simple natural language instructions.

Another example is Anon, a powerful abstract AI tool. Anon not only allows users to trade through natural language, but also supports multiple international languages (such as Chinese, Spanish, and Finnish). In addition, Anon provides seamless cross-chain bridging capabilities through LayerZero, while supporting automated triggers based on time and Gas prices. These features allow users to complete complex DeFi operations with minimal effort, making the entire process more efficient and user-friendly.

Reduce human error

Abstract AI not only simplifies the operation process, but also improves security by reducing the chance of human error. One of the most common mistakes in DeFi is sending funds to the wrong wallet address. This error may be caused by mistakes during manual input or by a program called clipper malware , which replaces the address in the user's clipboard with a malicious address.

DeFAI effectively avoids such risks through automated address verification, ensuring that each transaction is accurately sent to the correct address. It handles technical details in the background, greatly reducing the possibility of user errors, allowing users to focus on developing investment strategies without worrying about losses due to technical errors.

Real-time insights for smarter decisions

In addition to simplifying operations and improving security, Abstract AI also helps users make smarter decisions through real-time data analysis. Taking Anon as an example, this solution provides users with insights into market trends, token performance, and social sentiment by aggregating data from multiple platforms. Anon's agent Gemma is able to integrate on-chain data (such as total locked value and transaction volume) and off-chain data (such as social sentiment analysis of X and Telegram), and transform this information into customized analysis and reminders.

For example, when the trading volume of a token suddenly surges, or the discussion of a project on social media increases significantly, Gemma will promptly alert users to help them seize potential investment opportunities or avoid risks. Users can easily obtain comprehensive market insights and make smarter investment decisions without having to manually track multiple sources of information.

Summarize

With the rapid development of DeFi, the technical barriers that once made many people feel complicated and difficult are being gradually eliminated by innovative tools such as DeFAI. By simplifying operational processes, reducing human errors, and supporting intelligent decision-making based on real-time data, Abstract AI is making decentralized finance easier to use and safer, providing a better user experience for both novice and veteran users.

Being able to easily navigate complex DeFi systems without deep technical knowledge is an important breakthrough that DeFAI has brought to the industry. This not only makes it possible for more users to participate in DeFi, but also lays the foundation for the popularization and development of the entire ecosystem. Looking to the future, we have reason to expect more innovative AI-based solutions to emerge, making DeFi more intuitive and safer, and promoting the arrival of a more efficient and user-friendly decentralized financial ecosystem.