Thread by @diego_defai
https://x.com/diego_defai/status/1920413949272510761 DeFAI is one of the fastest-growing sectors in the crypto space, with a market capitalization that reached an all-time high of more than $4 billion just a few months after the term “DeFAI” was coined.
This rapid growth has been fueled by all the new projects that have emerged daily since the sector’s inception.
This situation of explosive growth has led to considerable confusion about what DeFAI actually is and, more importantly, which projects are leading this narrative.
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](https://x.com/diego_defai/article/1920413949272510761/media/1920399817127104512)
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Content
- The Problem to Solve
- Introducing DeFAI
- Mapping the DeFAI Ecosystem
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The Problem to Solve
We must begin this deep dive into the DeFAI ecosystem by understanding what DeFAI is and the value proposition of this emerging crypto sector.
As the name suggests, DeFAI is the merger of DeFi and AI.
DeFi is what makes blockchains truly useful today; dApps such as
,
,
, and
are among the most prominent representatives of the sector.
DeFi has grown very rapidly since its inception, almost 10 years ago, reaching an all-time-high total value locked of more than $170 billion in 2021.
[
](https://x.com/diego_defai/article/1920413949272510761/media/1920401942926225409)
However, what had once been the main narrative in crypto started to slow down as builders and users realized DeFi’s biggest problem: the user experience.
Using DeFi apps is not easy; users need a third-party Web3 wallet, must manually switch between different chains, pay gas fees, approve contracts, and sign every single transaction.
Although DeFi’s mission is to make finance accessible to everyone, we have come to understand that DeFi is not for everyone because of its high level of complexity.
[
](https://x.com/diego_defai/article/1920413949272510761/media/1919690924604497920)
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Introducing DeFAI
DeFi needed help to solve its UX problem, and AI looks like the best solution.
In DeFAI, AI’s primary role is to abstract the complexity of operating in DeFi, from data research to on-chain execution. Blockchains are not designed for direct human interaction, which is why UX designers are in such high demand in the crypto space.
Think of DeFAI as similar to the search engine revolution in the early days of the internet.
Before them, users had to manually enter website addresses, and research was difficult and time-consuming. Search engines improved the internet user experience by orders of magnitude, paving the way for the revolution we know today.
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Mapping the DeFAI Ecosystem
Let’s begin mapping the DeFAI ecosystem and identify its main sub-categories.
Just as DeFi includes sub-categories such as DEXs, lending protocols, perpetuals, yield trading and others, a similar breakdown is emerging in DeFAI.
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Abstraction Layers
ChatGPT has brought AI to the masses. An incredibly easy-to-use text bot that lets users “talk to a human-like assistant” delivers one of the best UX experiences we’ve ever seen, and DeFi needs the same level of abstraction. This was the first DeFAI sub-category to emerge, and it remains one of the most developed.
Leading projects in this space:
- @neur_sh
- @griffaindotcom
- @AIWayfinder
- @bankrbot
- @mantis_app
- @Chain_GPT
- @slate_ceo
- @askthehive_ai
- @orbitcryptoai
- @HeyElsaAI
- @ProjectPlutus_
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AI Trading Facilitators
Trading is still crypto’s largest use case, and the recent surge of
and
clearly shows the trend. Imagine autonomous agents that help traders discover alpha and boost their win ratio—that’s precisely what projects in this DeFAI sub-category aim to do.
Leading projects in this space:
- @HeyAnonai
- @Cod3xOrg
- @Almanak__
- @ProjectPlutus_
- @gatsbyfi
- @StrawberryAI_5
- @getaxal
- @GigabrainGG
- @AgentXYZ_ai
- @Aiathenax9
- @Cortex_Protocolx
- @Maiga_AI
- @PaalXOfficial
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Autonomous Agents
What if, instead of using AI merely to discover alpha and improve your win ratio while trading, you could simply deposit funds into an AI agent’s smart contract and let it handle everything—from research to execution? Or what if you are a DeFi yield farmer but are tired of manually hunting for the best yields? Autonomous agents are designed to automate all of these tasks, taking over the jobs we once performed ourselves. Leading projects in this space:
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Agent Frameworks
AI agents represent the next trillion-dollar opportunity, and within the next five years, we may see more on-chain activity carried out by autonomous agents than by humans. Because of that potential, AI-agent frameworks have become a key DeFAI sub-category to watch. Whether built on open-source or closed-source models, it’s still too early to predict which approach will win the AI-agent race.
Leading projects in this space:
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DeFAI Infrastructure
This sector needs high-quality infrastructure if it wants to keep growing and reach millions of users. Key components include reliable data providers for agents, blockchains optimized for Crypto × AI integration, and efforts to develop truly decentralized AI.
Leading projects in this space:
DeFi is not for everyone because of its high level of complexity. AI is here to make DeFi finally accessible to everyone.