Data suggests that new users are joining the on-chain world to tap into DeFi opportunities and earn higher yields than they can in TradFi. The problem is that they need products that simplify onboarding without forcing them to manage seed phrases, hunt for yields, or worry about gas fees.
DeFAI is the answer to these challenges and the key to onboarding the next billion users on-chain. In this article, we’ll explore why “DeFAI is the Next Big Thing” and analyze three future trends that could explode in the coming years.
Crypto is still being adopted at twice the speed on the internet from 5m IP addresses vs 5m wallets (very like for like).
1. From DeFi to…
DeFi is the true disruptive technology of our era and stablecoins are the first real example of that. Thanks to $USDC, $USDT and $USDe, we are onboarding millions of unbanked people into the crypto space and this is just the first domino in a cascade that will bring us to billions of users in DeFi.
A few days ago, I came across an article by @CryptoHayes that laid out a simple but powerful idea: stablecoins will become the key vehicle for exporting the dollar beyond America, particularly to the Global South.
Anyone living in a country with a weak national currency and high inflation has one financial dream: to hold USD that offers a yield. Stablecoins can provide that and this is why in the coming years we are going to see the dollarization of the world thanks to this technology.
But all these stablecoins must be used somewhere and this is why we are also going to see mass adoption of DeFi and all the primitives built into it, such as:
- Lending and borrowing (ex. Aave)
- Spot trading (ex. Uniswap)
- Fixed yield (ex. Pendle)
- Perp trading (ex. Hyperliquid)
- On-chain neobank (ex. Ether.fi).
Stablecoins are the Trojan Horse that will bring them to DeFi, BUT…
The Problem and the Solution
DeFi has a major problem: the user experience. It’s still too complex to manage a Web3 wallet, move around dApps, pay chain fees, or even understand the differences between all these L2s.
The financial opportunities are here (like earning 10% yield on USD) but it’s still difficult for investors to access them due to technological complexity. This is where I introduce the solution: DeFAI, the sector merging DeFi and AI.
In this context, AI and especially AI agents are the solution to all UX problems, as they operate on-chain for us.
A Practical Example
I want to share with you a practical example of how DeFAI and AI agents can improve the DeFi user experience by 100x and finally allow everyone to take advantage of the opportunities available on-chain.
Let’s say you have some stablecoins in your wallet and you want to put them to work to earn yield. Before the AI agents revolution, the solution was to manually look for the best yield across different protocols such as Aave, Morpho, Compound and Fluid. For example, right now you can supply
$USDC on Aave for 4.39% APY.
The problem is that yields always change and there are dozens of protocols offering different yields, so it’s basically impossible to always deploy your capital in the best opportunities.
To resolve this issue, you can use AI agents and give them the allowance to move your funds around the chain with the goal of achieving the best yield.
As AI agents never sleep and can monitor an infinite list of protocols, they can always deploy your capital in the best opportunities and monitor the situation in real time.
The result? AI agents offer a 10x better experience, as the investor needs to do NOTHING and the final result is a HIGHER return (average of +10% APY) compared to manual execution (average of 6.5% APY).
Some projects building in this direction:
1. @FungiAgents — Users can deploy $USDC on Base and let the agent manage their stablecoins, moving them around a pre-selected list of protocols. Onboarding is super-easy thanks to fiat on-ramp and social log-in.
2. @gizatechxyz — Currently the leader in this sector, Giza has already processed over $1.6B in agentic volume, moving USDC across different protocols and signing institutional partnerships like the one with Re7. So far, this is the most succesfull DeFAI product.
3. @Almanak__ — A framework that allows the creation of different agentic strategies. Their first product, the “Autonomus Liquidity Vault” has seen huge success. With $40M in stablecoins under management, they are paying around 40% APY, boosted by token incentives. The $ALMANAK airdrop will happen in the coming months.
4. @ZyfAI_ — A framework available on Base and Sonic, ZyFAI differentiates itself through its security focus, using advanced session keys that improve the overall safety of the product. They have also recently introduced a new incentive system that rewards users with their governance token + the native yield.
DeFAI Potential
DeFi also means investing and trading and AI agents are changing the way users operate on-chain. Since this technology gives an unfair advantage compared to those who don’t use it, every trader is starting to implement AI in their process.
Some practical examples:
1. @Replicatsai – Building a fully autonomous investing framework: their agents research, deploy, and manage user wealth much like a financial consultant would. These agents primarily invest in blue-chip assets such as $BTC, $ETH, $USDC (and some DeFi tokens soon) using proprietary risk management frameworks to evaluate opportunities and manage risk.
2. @Cod3xOrg – Building autonomous trading agents: with the upcoming v0.7 release (mid-September), users will be able to create autonomous AI agents that trade for themselves, following predetermined rules such as asset lists, risk appetite, and strategy.
3. @HeyAnonai – Building the definitive trading overlay: if you still want to trade manually but understand that without AI you can’t compete, HeyAnon’s HUD is the solution. It’s an overlay for trading front-ends like Hyperliquid, Binance, GMX, or GMGN, giving you real-time AI-powered trading info that helps you make the right decisions.
Three Future Trends in DeFAI
Now that we’ve seen what has already been deployed in DeFAI — with products that already have active users and generate fees — it’s time to predict the next trends in DeFAI that will unlock its full potential.
1. AI agents for fixed yield products — Similar to how current AI agents optimize stablecoin yields, the next step will be agents trading fixed yield products such as those provided by @pendle_fi. This is the natural evolution and a use case requested by thousands of users.
2. AI agents managing lending and borrowing — Aave has improved its UX a lot, but it’s still complex for non-crypto users. AI agents that can access lending markets, analyze borrow rates, manage liquidation risks, and deploy capital will be in high demand in the near future.
3. AI agents handling advanced strategies — Such as funding rate arbitrage (going long spot and short perpetuals). This is the strategy that made @ethena_labs and $USDe successful. If AI agents can offer this without high fees, they will open growth space for more sophisticated users.
See you in the next article.
Akash
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