The Convergence of AI and Web3

Cryptocurrencies and AI have progressed concurrently within their distinct domains, constantly pushing the limits of technology and fostering innovation. No surprise then that we now stand at the intersection of these transformative technologies, destined to become interconnected and wield significant influence over the digital economy in the coming years. 

The dimensions of the intersection of crypto and AI can be broadly classified into three buckets:  

1. Blockchain Networks & Smart Contracts

• Scalability and Efficiency: AI algorithms can help improve scalability and efficiency in blockchain networks by optimizing consensus protocols, reducing transaction costs, and enhancing network performance.

• Smart Contract Automation: AI algorithms can facilitate the automation of smart contracts, ensuring seamless execution and reducing the risk of human error. This integration enhances efficiency and reliability in decentralized financial systems.

2. Security

• Enhanced Security: AI can be utilized to strengthen the security of cryptocurrency transactions and wallets by identifying patterns of fraudulent activities and detecting potential threats in real-time.

• Anti-Money Laundering (AML): AI-powered solutions can help in combating money laundering activities by analyzing transactional data and identifying suspicious behaviors, thereby ensuring compliance with regulations.

3. Asset Management 

• Predictive Analytics: AI algorithms can analyze vast amounts of data in the crypto market to identify trends, patterns, and potential price movements. This assists investors in making informed decisions and optimizing their trading strategies.

• Tokenization and Asset Management: AI can streamline the tokenization of assets, making it easier to represent real-world assets digitally. Additionally, AI-powered asset management platforms can optimize investment portfolios and provide personalized recommendations.

The third dimension of digital asset management is where AI has been a part of the architecture of aarnâ protocol in its design for autonomous alpha discovery. aarnâ AI’s machine learning models have developed predictive power from being trained on an extensive set of hand-crafted features built on blockchain transaction metadata, in conjunction with features built on social sentiment.

By harnessing the power of AI, aarnâ protocol offers a sophisticated approach to digital asset management by streamlining the infra and decentralized process for tokenization of assets. Additionally, the protocol's AI-powered asset management platforms optimize investment portfolios, providing personalized recommendations tailored to individual preferences and risk profiles.

As the convergence of AI and Web3 technologies continues to unfold, there will be further advancements in intelligent autonomous digital asset management. Taking AI feed directly via oracles into automated transactions on smart contracts based on algorithmic logic - this is an emerging decentralized finance innovation which will have a wide impact on the evolving field of on-chain asset management. That’s where â_fi800 comes in.

â_fi800 vault series take crypto x AI to the next level by tokenizing AI generated algorithmic investment and / or trading strategies into vaults, utilizing the infrastructure of aarnâ’s smart contracts tokenization platform. 

â_fi802 is the first such vault, which would be deployed on both Ethereum and Arbitrum, once aarnâ contracts are launched on mainnet on both chains, and would be composable with Uniswap V3. â_fi802 is based on aarnâ’s first production machine learning model, alpha 30/7, which is a sophisticated stacked model that makes short term predictions of top tokens on a weekly periodicity for a seven day horizon, by utilizing a look back window of thirty days on the extensively designed feature set of blockchain transaction data technical features and NLP features for social sentiment. alpha30/7 has been performing consistently well in robust backtesting.â_fi802 3 month back test

Currently developed by a small, highly specialized AI team at aarnâ, but with aarnâ’s commitment to decentralization, there is a clear progressive decentralization roadmap for the AI platform within the protocol. Data scientists and dAI protocols will join aarnâ DAO as contributors and experts and become alpha creators to create and propose algorithmic vault strategies. aarnâ will open source its feature set & models pipeline and enable the decentralization of the AI effort in the protocol, powered by the aarnâ protocol token. The future of decentralized AI x crypto is being built at aarnâ.

Polygon has proposed a zero-knowledge proof (ZKP) overhaul for its proof-of-stake (PoS) chain. The upgrade aims to enhance privacy, scalability, and efficiency. By utilizing ZKPs, Polygon seeks to achieve faster transactions, lower fees, and improved user privacy.Optimism, a prominent Ethereum layer 2 scaling solution, has announced a $40 million public goods funding round. This funding round is intended to support the development of public goods and infrastructure within the Optimism ecosystem. Bitcoin has surged to its highest level in over a month following the news of BlackRock's filing for a Bitcoin exchange-traded fund (ETF). The announcement has sparked renewed optimism among investors, as the potential approval of a Bitcoin ETF could attract institutional money into the cryptocurrency market. 

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Last month brought significant developments for aarnâ, particularly in the areas of community, socials and our engine. Check out our May update >