Tech
The role of artificial intelligence in improving Web3 platforms
Last updated: February 2, 2024 04:50 EST | 2 minute read
Blockchain and artificial intelligence (AI) together have the potential to enhance each other, making the two fields more interesting and diverse.
A new relationship by TenSquared Capital highlights ways AI can increase speed and efficiency in the Web3 arena.
Essentially, Artificial intelligence joins forces with Web3 it has the potential to address difficult global issues. It can also automate essential tasks, power data-driven choices, and increase trust and transparency for users.
The growth equity firm’s research team explored specific areas where AI can be applied to make Web3 more structured.
The power of artificial intelligence in multilingual coding
Artificial intelligence, especially tools like ChatGPT and Github Co-Pilot, can significantly impact the cryptocurrency industry by making it easier to write code.
These AI tools allow developers to work on various blockchains, even if they are not experts in a specific programming language.
For example, if a developer is proficient in Solidity but needs to program in Rust for Cosmos, he can rely on ChatGPT/Co-Pilot to assist him in the translation process, the TenSquared report states.
“AI-based code writing tools lower the barrier to entry into blockchain and allow developers to write much faster,” they said.
AI not only speeds up code writing, but can also improve blockchain infrastructure.
The technology can create smart contracts and consensus protocols that make real-time decisions using on-chain data. Furthermore, it can improve Web3 security through AI-based detection systems, ensuring more accurate and efficient smart contract decisions.
Some startups have already embraced it. For example, Oraichain uses AI-powered APIs to lay the foundation for intelligent smart contracts and advanced decentralized applications (DApps).
Additionally, DApps can use on-chain AI for data analysis and automation.
Experts predict that AI agents will use cryptocurrencies for the majority of payments, as large language models (LLMs) can handle transactions via crypto wallets and interact effectively with smart contracts and DeFi protocols.
Enhance Web3 security
Researchers and startups are already diving into AI-based consensus methods, which are key to keeping blockchains secure and scalable.
Take Velas, for example, which is developing a delegated Proof-of-Stake system with artificial intelligence.
Meanwhile, Inery is working on a way to validate blocks more efficiently based on uptime.
AI also plays a role in strengthening Web3’s security, helping to fend off cyber attacks and strengthening blockchain defenses. This is a big deal because security is a big hurdle for users entering the world of cryptocurrencies.
Just in January, Web3 took a $127 million hit by hackers in 19 separate incidents. And last year, Cyber fraud groups have earned over $1 billion from the cryptocurrency sector, according to Chainalysis.
Artificial intelligence in credit scoring
AI can reshape decentralized finance (DeFi) by using historical lending data to create credit scores and improve lending decisions. For example, Spectral’s MACRO Score is an advanced machine learning-based on-chain credit score for DeFi lending.
Through trading bots and predictive analytics, AI can enable traders to improve their decision-making and profit from market trends. Platforms like 3Commas offer cryptocurrency trading bots for automated strategies.
Interactive game
Generative AI can personalize game stories and characters. For example, Inworld AI creates AI NPCs, making games like WebKinz more engaging. ASM, part of Futureverse, develops a platform for user interaction with AI agents in game worlds.
AI can also enhance NFT platforms and Web3 social networks by providing users with personalized content and relevant product recommendations.
However, Ethereum co-founder Vitalik Buterin recently warned that it is the most difficult challenge in integrating cryptocurrencies and artificial intelligence is creating a single, decentralized AI that is trusted by other applications.