DeFAI refers to the fusion of DeFi (decentralized finance) and AI (artificial intelligence). In 2025, many projects fit this definition; there has been a steady rise in on-chain automation and AI-powered apps coming to market. Here’s everything you need to know about this nascent trend and it’s long term implications for decentralized technologies.
In This Guide:
- What is DeFAI?
- How do DeFAI crypto agents work?
- DeFAI market in 2025
- Will DeFAI create mass adoption?
What is DeFAI?
DeFAI is a combination of decentralized finance (DeFi) and artificial intelligence (AI). Daniele Sesta coined the term.
DeFAI aims to make life easier for both expert and novice crypto traders and users. One of the problems with modern-day blockchain interactions is that the experiences are tedious or extremely complex.
High-level problems
For the average user, some of the hurdles to adopting or using blockchain technology includes:
- Creating and securing a wallet.
- Navigating transaction fees, liquidity, slippage, token types, etc..
- Bridging, staking, lending, trading.
Low-level problems
The stumbling blocks for more advanced users typically revolve around collecting and analyzing blockchain data. This entails:
- Historical transaction data
- Metadata
- Transaction tracing
- Cross-chain transactions
DeFAI uses crypto AI agents to automate blockchain interactions, gather, analyze, and recognize patterns in blockchain data, and simplify users’ overall crypto experience. Many believe that combining DeFi and AI is the next step to greater crypto adoption.
How do DeFAI crypto agents work?
The cornerstone of DeFAI is the crypto AI agent. Many agents differ in their implementation, but you can classify them by the four primary tasks that they perform: gathering information, interpreting, decision-making, and execution.
Gathering information
A huge value of both standard and crypto AI agents is their ability to gather and digest vast amounts of data.
Some of the information that agents may collect include:
- Tokenomics (market cap., price, liquidations, open interest, DEX/CEX volume, etc.)
- Social media sentiment
- News reports
- Regulations
Interpreting
Interpreting involves making sense of or recognizing patterns in the collected data. This task utilizes machine learning algorithms, like neural networks or decision trees.
To put this into perspective, a trading DeFAI agent may look for patterns in charts that are not immediately recognizable to the average person. These trading patterns could include flags, channels, Bollinger Bands, RSI, detecting outliers or anomalies, etc.
Decision making
As the name implies, decision-making involves deciding what to do based on the interpretation of data. The difference between interpreting and decision-making is that interpreting makes sense of the information while the latter considers what to do with it.
Piggybacking off the previous example, the agent would then use the information gleaned from the trading patterns to decide whether to buy or sell, where to set stop losses or take profit, and more.
Execution
Execution primarily involves the implementation of the decision-making process but can also involve learning from successful or unsuccessful strategies, or adapting to market conditions. This phase often involves automated agents or bots operating within predefined parameters.
Some of the actions that these agents may perform are interacting with smart contracts, executing trades on DEXs, adjusting liquidity positions, managing lending protocols, or automating risk mitigation strategies.
DeFAI market in 2025
Both crypto and AI are still relatively young markets. As of February 2025, the market cap is just under $1 billion.
DeFAI market cap: cookie.fun
DeFAI projects typically range from trading assistants to chatbots, analysis, and trading terminals. Some of the most popular projects are:
- AIXBT: Extracts trending topics and sentiment from social media and KOL sources, offering real-time market intelligence.
- GRIFFAIN: An AI agent platform that supports various blockchain operations, including portfolio queries, token swaps, NFT trading, and coin sniping.
- Hey Anon: It aggregates project information across multiple blockchain networks and uses conversational AI to help users manage DeFi operations.
- Hive AI: Uses AI to automate project planning, create tasks based on suggestions, set next steps from emails, and generate various types of content.
DeFAI projects: CoinMarketCap
Will DeFAI create mass adoption?
It’s likely that DeFAI will help onboard the next wave of web3 users by abstracting away many of the complexities involved with using blockchain technology. However, given that the sector is still in its early stages, DeFAI users should exercise caution. Many project claim to be AI-enabled simply to ride the hype; this will likely become more common as DeFAI projects increasingly take centre-stage in web3. If what a token or project is promising seems too good to be true, it probably is.
