DeFAI as Default?

I’ve been quite skeptical about DeFAI’s potential value add, so here’s my attempt to build a bull case and convince myself there’s something big here.

Activating Passive Capital

For those of us who have had capital sitting idle for years out of a lack of motivation to manage it, AI-enhanced wallets that parse intent into strategic management logic could be a game changer.

Even a drag and drop IFTTT service can be overwhelming friction for setting up an investment strategy.

If the only friction is typing in “Deploy my funds to the safest stablecoin-only pools” or “Invest 2% per month across the top DeFi protocols by market cap” would passive capital be more likely to become active?

A Boom in Expressivity

Following from this, we may see a boom in expressivity by investors that adopt AI for parsing their intent. Alice may be comfortable letting her money flow between top Uniswap stablecoin pools, Aave, and Morpho. Bob may trust select Morpho vaults but not Aave due to the commingling of collateral. Christine may prefer fixed rate opportunities across Size Credit or Term Labs.

Being able to express these views practically equates to a more efficient market “conversation” about risk. Risk evaluation is not purely objective, and there is no single highest risk-adjusted yield!

So we get money flowing with less friction, in a way that a single yield optimizing service cannot achieve (because it cannot encapsulate everyone’s specific preferences and biases at once).

“Civil Obfuscation”

This is not a direct argument for the value potential of DeFAI, but rather a note that having millions of agents taking actions on-chain autonomously and semi-autonomously will be a nightmare for the surveillance states of the world.

Everyone should be excited about a bloom in transaction volume simply for this reason. It may be the next-best thing to private DeFi while we wait for the UX and infra to catch up.

New Application Unlocks

Predictions markets will benefit from research agents, thus being able to scale with more efficient markets. This is exciting.

I’m sure there’s lots more being built in other verticals. What am I missing?