Cryptocurrency bear markets have historically been challenging for the industry, with many promising projects fading into oblivion. However, every market downturn brings the opportunity for innovation, as seen in the success of Uniswap and OpenSea. As the market shows glimmers of hope for an upward trajectory, the next big innovation on the horizon is the unification of artificial intelligence (AI) and Web3 to onboard 1 billion users.
AI has become the most exciting technological innovation since blockchain, and its proliferation presents an opportunity to simplify and strengthen blockchain use cases for average users. To hit mass adoption, Web3 needs frictionless user experience (UX). The current UX of Web3 is often described as clunky, intimidating, and somewhat “cold” for average users. This is where AI can step in.
AI can help users become better at engaging with Web3 apps, from onboarding to becoming a power user. For example, AI can scrub a user’s wallet history to understand their buying patterns and recommend digital assets they might want. This is similar to how Amazon recommends products to its customers based on their purchase history. AI can also examine on-chain patterns and market activity to find the best time to buy an NFT.
Regarding much-needed improvements to security and accountability in crypto, AI can examine on-chain data of wallets to determine their reputation, helping distinguish between safe and unsafe transactions. It can also require users to complete extra verification steps before completing transactions, which could reduce rampant phishing and hacks. Exchanges already do something like this, but AI can automate the process and ensure a user’s custody is preserved. Take this further, and we can define protocol ratings based on the attack vector they might be exposed to, helping developers catch potential issues before they happen.
For normal users, terms such as “smart contracts,” “seed phrases,” and “wallets” can be intimidating. AI can help users understand and complete actions through an outsourced AI chatbot. This chatbot can be similar to the customer service assistance utilized by many websites. It can help understand a user’s Web3 knowledge and user history (via their wallets) to help them complete actions and understand them. This has the potential to drive new user engagement and the reengagement of existing Web3 users, leading to further adoption via improved education. It is also easy to implement among all wallets.
Moving to decentralized applications, AI can significantly increase user engagement and adoption rates by analyzing a user’s on-chain data and recommending the best features and how to leverage them. AI can help users become the best possible traders, a virtual investment adviser with the most innovative tools.
For developers, AI can simplify their workflow by pre-auditing contracts, which is one of the biggest pain points for Web3 developers due to the amount of planning, time, and cost it takes to audit smart contracts. Using AI as a pre-audit tool (and writing assistant) for smart contracts will enable a more streamlined operation for developers, saving valuable time and costs with the benefit of optimizations rolled into their product.
The promise of AI for Web3 is exciting, as it can remove the friction amidst the greatest barrier of innovation and usability for the industry. Like Web3 overall, AI can be an additional layer to the ever-powerful toolkit that is revolutionizing how we create, chat, trade, and live. Let’s use it as best we can as we build the future.