The rise of artificial intelligence (AI) has opened up many breakthrough opportunities in the decentralized finance (DeFi) industry. Among them, Level 3 AI agents are attracting attention due to their high autonomy, advanced learning, and real-time intelligent decision-making capabilities. However, to achieve widespread adoption, these systems need to overcome many barriers related to ethics, security, and user trust.
What is Level 3 AI and how is it different?
Current AI agents mainly follow fixed workflows, requiring human guidance. However, Level 3 AI can learn by itself, have long-term memory, and make independent decisions based on real-time data.
According to James Ross, founder of the Ethereum Layer 2 Mode network, the biggest difference of Level 3 AI is the ability to flexibly adapt to environmental factors, instead of just reacting to available commands. These systems can refine their behavior through experience, processing many types of data at the same time, from text, images, audio to live environmental data.
This allows AI agents to predict user needs, make recommendations and take actions based on behavioral analysis, opening up a wide range of application potential in DeFi and the cryptocurrency market.
Level 3 AI applications in the cryptocurrency market
In the cryptocurrency industry, AI agents have previously focused mainly on automated trading, market monitoring, and smart contract execution according to static models. This limits the ability to respond to rapid market fluctuations.
With Level 3 AI, models can be refined in real time, helping to spot new trends and proactively adjust investment strategies. Ross believes this will help predict market movements more accurately and optimize asset portfolios without human intervention.
Jessica Salomon, advisor to Chirper.Fun Level 3 Agent Launchpad, also believes that Level 3 AI agents will change the way users interact with crypto platforms. Instead of simply executing trades on command, these systems can act like real investors, making decisions based on in-depth data analysis.
The Impact of Level 3 AI on DeFi
DeFi is one of the areas with the strongest potential for Level 3 AI applications. These systems can automatically manage investment portfolios, adjust lending strategies, and optimize liquidity on decentralized protocols.
Ross gives an example: an AI agent can detect signals of a market downturn and quickly reallocate assets, interact with DeFi protocols, or deploy a hedging strategy – all automatically.
Velvet Capital Protocol is also applying advanced AI to assist investors in trading digital assets. The company recently launched the “AI Agent Portfolio Launchpad” tool, which automates AI portfolio management strategies.
Additionally, decentralized autonomous organizations (DAOs) can also leverage Level 3 AI to optimize governance and treasury management processes. According to Ilan Rakhmanov, founder of ChainGPT, AI can analyze real-time market data and make recommendations for improvements without human intervention.
Barriers to Development
Despite its great potential, Level 3 AI still faces many challenges, especially in terms of security and ethics.
Salomon points out that long-term data storage can raise privacy concerns, while the ability to simulate human behavior can lead to emotional manipulation issues. Creating authentic but not misleading user responses is a major challenge for developers.
In addition, user trust in AI is still low. Ido Ben Natan, CEO of Blockaid, emphasized that without safety assurances, investors will not be willing to entrust their assets to AI. Therefore, Blockaid is developing security solutions to ensure that AI does not accidentally interact with malicious assets or entities.
In addition, establishing a clear boundary between AI and humans, along with a transparent development process, will play an important role in building trust and promoting widespread adoption.
The Future of Level 3 AI in DeFi
The development of Level 3 AI not only marks a major step forward in DeFi, but also raises questions about the future of intelligent automation in the financial industry.
These AI systems could completely change the way people manage digital assets, from trading to optimizing investment strategies. As the technology continues to mature, investors may consider how to effectively leverage AI to optimize their portfolios.
However, the combination of technology and human factors is still the key. The controlled application of Level 3 AI, combined with personal judgment, may be the right direction to fully exploit the potential of artificial intelligence in DeFi.
