Can AI bridge the gap between DAO complexity and user understanding?
Tags: defi, ai, innovation
Published: 2024-05-31 10:02:15

Interest in AI has grown significantly in the past few years. Its applications are known to be vast, ranging from education to technical recommendations for developers. For example, a selection of the datacamp platform [showed](https://www.datacamp.com/blog/unique-ways-to-use-ai-in-data-analytics) its applications in data analytics. It seems that this 20th-century breakthrough has the potential to change every aspect of our lives and influence its course. However, the question arises: will it really be beneficial?

Artificial intelligence is closely related to autonomy, as its algorithms can link and identify information from different databases without the direct involvement of a specialist. This can be explained by its development and structure, which analyzes cognitive processes and, as a result of research, develops intelligent software and systems that can provide a wide range of diverse services. Therefore, when DAOs (Decentralized Autonomous Organizations) appeared, it became clear that a [synergy](https://www.datacamp.com/blog/unique-ways-to-use-ai-in-data-analytics) could arise between AI and DAO. This issue was raised as early as 2016, when many examples of DAO and AI interaction were given, such as the ability to personalize the experience, improve fraud detection, and increase transparency and security.

## What is a DAO?

To elaborate, a DAO is a digital organization that operates on a blockchain and uses smart contracts to govern rules and decision-making processes. These are groups that are formed to manage Stablecoins, tokens with a fixed rate. Another purpose of such organizations is to invest in startups or buy NFTs. Such organizations are promising for decentralized cryptocurrency exchanges, investment funds, social networks, and blockchain-based games. Therefore, there are many examples of DAOs, including [Uniswap (UNI)](https://uniswap.org/ecosystem) — a decentralized exchange that generates automated markets for pairs of liquid assets. [BitDAO (BIT)](https://docs.bitdao.io/) is a community that provides development support, as well as liquidity and funding for launching projects in NFT, DeFi, DAO, and online games. The [Mango DAO (MNGO)](https://dao.mango.markets/dao/MNGO) organization is engaged in lending and margin trading, based on the Solana blockchain using the Serum exchange. The potential benefits of integrating AI and DAO include:

**AI bots for DAO functionality.** 
This connection will be useful in the case of asset trading, summarizing management decisions, and attracting new customers;

**Integration of AI into the product or service offered by DAO.** 
Such synthesis will provide management of crypto assets, as shown by the experience of the decentralized portfolio management protocol SingularityDAO;

**Delegation of own tokens to an AI agent.** This means that instead of an investor manually signing a transaction using an e-wallet, they will be able to delegate their tokens to an artificial intelligence agent to vote on their behalf. This option is offered by [TRUST AI.](https://www.trust-ai.io/#tokenomics) However, of course, DAO should be further developed to ensure customer confidentiality;

**AI and smart contracts**
DAO allows you to install a plugin that will allow AI to participate in transactions. However, if the address for sending funds does not match the address specified in the proposal, then such an action will be marked as malicious. This will primarily ensure the safety of the storage and use of funds. Another potential application option is offered by the company [EncrypGen](https://encrypgen.com/), which uses AI smart contracts to transfer patient DNA data for further clinical trials.

The risks of DAO are that it is difficult for members of such organizations to understand what others are doing, and for token owners to understand the specifics of DAO. This is what causes the need for artificial intelligence as a kind of assistant that will coordinate actions for quality work. However, the modern crypto industry is moving forward and is starting to actively implement AI services for its products. For example, the [WhiteBIT](https://whitebit.com/ua) exchange began to combine blockchain and AI, and several crypto projects joined it. The Edain project provides AI-based big data analytics services, and the NOOFT token will promote NFT on the platform. CEO of the exchange Volodymyr Nosov said in one of the interviews: “Artificial intelligence brings drastic changes in society. And this is something we have to come to terms with and adapt to as soon as possible. We cannot stop this process. So, it’s time to tighten up a little, think about the consequences and start taking action”.

Some blockchain projects include [Render Network](https://rendernetwork.com/), a blockchain platform for peer-to-peer sharing of AI-generated graphics, and [Fetch.AI](https://fetch.ai/), a platform for creating apps, according to [Reuters research](https://www.reuters.com/technology/cryptoverse-ai-tokens-outpace-record-breaking-bitcoin-2024-03-19/#:~:text=Some%20of%20the%20top%20blockchain,SingularityNET%2C%20an%20AI%20services%20marketplace.).

**Conclusion**

According to SingularityDAO CEO Marcello Mari, the use of AI technologies has great potential to increase the autonomy of DAO, but it is important to emphasize that achieving a high level of quality in these processes requires further research and ensuring reliability for all participants in this process. It is also worth noting that DAOs are undergoing significant changes under the influence of artificial intelligence and its transformative technologies. Therefore, it is undoubtedly true that, as a result, society can get a transparent and efficient way of doing business.