While interest in AI-related crypto projects has surged, much of the AI agent niche remains speculative. Although some projects address practical challenges, the rapid development of Chinese AI models also adds competitive pressure that may lead to a sell-off among crypto AI projects, according to Sygnum Bank.
Additionally, while AI enhances security, it also introduces new risks. If not properly secured, AI systems can become targets for malicious actors. Moreover, flaws in algorithms could be exploited, making security a top priority for any AI-powered DeFi platform.
The regulatory environment of AI in DeFi is still nascent. Regulators and governments are concerned about algorithmic bias, data privacy and accountability. Resolving these concerns is crucial for AI to be implemented in DeFi on a large scale.