🔎DeFAI: The next big narrative?
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In today’s newsletter:
🔎An intro to DeFAI
📊On-chain alpha
😂Crypto meme of the week
🗞️The latest DeFi news
🔎An intro to DeFAI
We’ve been talking about onboarding the next billion users on-chain for a long time.
But the main problem is the following:
The current on-chain user experience is not ready for mass adoption.
Fortunately, DeFAI, a new narrative that has recently started gaining a lot of traction, might finally be able to address this issue.
I’ll explain why this is such a big deal below👇
What is DeFAI all about?
DeFAI (DeFi + AI) aims to significantly improve the DeFi user experience by using AI agents that can execute complex tasks on behalf of the users.
Imagine a natural language Interface like ChatGPT for executing on-chain actions instead of just answering questions. That’s what many DeFAI projects are building.
Let’s say you want to swap 0.1 ETH for SOL.
To do that on-chain, you need to find a bridge, bridge your assets to Solana, and then find a Solana DEX and execute the swap.
For those who are new to crypto, this process can be a nightmare.
But with the help of an AI-driven interface, you could simply type “Swap 0.1 ETH for SOL” and the AI will handle the rest.
For both newbies and regular DeFi users, this could save a lot of time.
Some DeFAI projects I’m closely watching
Hey Anon
Hey Anon is a project developed by Daniele Sesta, which is the creator of several DeFi projects that were very successful during the 2021 bull cycle.
The project was launched on the new L1 blockchain called Sonic.
Its upcoming AI-powered interface will allow users to execute swaps, open leveraged trades, bridge funds, and borrow tokens from money markets.
The AI bot will essentially translate natural language commands into on-chain actions.
Griffain
Griffain is a generalized DeFAI platform that allows its users to complete a wide range of on-chain tasks using natural language such as:
launch a new token
automatically conduct an airdrop
buy every token someone tweets about
Decide whether to buy a token based on a tweet
Set a take-profit order for a certain token you hold
Griffain is already live, but it requires an access pass to use it.
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Mode Network
Mode Network is technically an Ethereum L2 for DeFi.
But I included it in this list because the project started betting big on the AI agent narrative before the narrative even existed.
Some of the top DeFi AI Agents built on Mode are:
Modius - an AI DEX liquidity farming strategist
ARMA - an AI agent that automatically deploys stablecoins to the highest yield opportunities across Mode
AmpliFi - a platform that enables the creation of customizable AI-powered yield/trading strategies
You can find more similar protocols on Mode's AI Agent App Store.
If you want to see how the top DeFAI projects compare and what are their core functionalities, check out this table:
Final thoughts
If you’re a narrative trader, I recommend paying attention to what is happening in the DeFAI sector as it seems to be the hottest thing right now.
However, keep in mind that 95% of the current DeFAI projects will likely die in the long run as DeFAI is still in a very early stage of development.
So if you buy the tokens of certain DeFAI projects, make sure you constantly pay close attention to the latest developments in this sector.
In my opinion, DeFi will tremendously benefit from this new narrative.
DeFi needs major user experience improvements to onboard the next billion users on-chain. And DeFi AI agents can radically improve the on-chain UX.
On-chain Alpha🔎
DEX to CEX Spot Trade Volume hit a new ATH
Crypto Meme😂
The latest developments in DeFi
ZKsync released a 300M $ZK DeFi incentive program
Ethena announced plans to launch iUSDe, a yield product designed for institutional adoption, and bring sUSDe to Telegram for payments
Avalanche launched the infraBUIDL(AI) ecosystem grants program. AI projects that build on Avalanche will get up to $15M in funding
Defi App released the private beta for its SuperApp that allows users to swap, earn, leverage, and lend in one place. It also enables buying any token on any chain
CARV launched the testnet for its CARV SVM Chain. CARV SVM Chain combines Solana's scalability with Ethereum's security
Solv Protocol deployed its BTC liquid staking solutions on Sonic L1
Coinbase revealed plans to tokenize $COIN stock on Base L2
Frax Finance released the Frax Universal Interface, which enables users to access its ecosystem from one interface
Pendle released two points trading pools for EtherFi Berachain Vaults
Mantle released a portal to check the restaking rewards for cmETH
Solayer, a Solana restaking protocol, introduced its token $LAYER. The snapshot for its first airdrop will be taken on Jan. 13
Injective’s INJ 3.0 proposal to dramatically reduce the $INJ token supply has passed. Per reports, INJ 3.0 will boost the INJ deflation rate by 400%
Dolomite introduced its token $DOLO and its airdrop
f(x) Protocol released its V2, enabling users to open leveraged ETH positions without any funding fees or liquidations
Vertex Protocol announced its deployment on Sonic L1
That’s all for this week!
Until next time,
The DeFi Investor
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