DeFAI or Faux AI? The Great Crypto Naming Game!

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Move over DeFi, there’s a new kid on the block: DeFAI, a.k.a. Decentralized Finance and Artificial Intelligence. But with a market cap down 80% from its peak, can this crypto darling bounce back?

Ryan McNutt, the brains behind AI-powered DeFi assistant platform Orbit, seems to think so. According to McNutt, the sector is just “warming up” and will take off once it finds its product-market fit.

But with over 7040 projects and a market cap of $1.4 billion (down from $7 billion in early January), the industry is facing a few teeny tiny challenges. Like, what even qualifies as a DeFAI project? And can we please find a name that doesn’t sound like a sneeze?

Mete Gultekin, token incentive engineer at Vader DAO, has his own ideas. He suggests the term AiFi and argues that DeFAI is simply the “natural evolution” of crypto technology. But even Gultekin admits that the sector’s biggest challenge may not be naming conventions, but rather ensuring that AI doesn’t go rogue.

And let’s not forget the potential risks of AI agents managing user funds. As Gultekin puts it, “With fine-tuned AI agents, there’s this trade-off: You either give it a lot of creativity, and it goes off and does cool stuff, but the potential risk is that it can get easily manipulated and hallucinate.”

So, can DeFAI come back up? Only time will tell. But one thing’s for sure: this sector is anything but boring!

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2025-02-11 19:55