AI in DeFi and Trading

DeFi runs 24/7 on public mempools — prices move, liquidations trigger, and MEV bots reorder transactions within blocks. Machine learning enters as signal generation, portfolio rebalancing, and intent parsing, but on-chain execution still obeys deterministic smart contract rules and gas economics.

Retail-facing products promise 'AI portfolio managers' that rebalance across vaults; behind the scenes many are rules plus heuristics with LLM summaries. Genuine edge is scarce and decays quickly as competitors copy signals.

Regulators may treat autonomous trading agents as investment advisers depending on jurisdiction. Builders should document human oversight, disclose model limitations, and never promise returns based on opaque black-box models.