Web3 infrastructure firm Biconomy integrates artificial intelligence (AI) agents to facilitate on-chain transactions on behalf of users.
The Delegated Authorization Network (DAN) is a “relatively new” authorization layer that enables the delegation of trading activities to AI agents, as Biconomy co-founder Aniket Jindal explained to Cointelegraph.
Agents can autonomously manage trading accounts and execute transactions per predetermined instructions through authority delegation. A decentralized application (DApp) can receive personalized input from users regarding allocations and trading strategy after permissions are defined.
In essence, DAN enables users to delegate specific transactional duties and authorizations to AI agents, thereby allowing them to act on the user’s behalf within predefined parameters,” Jindal explained.
“For example, in a conversational way, ‘please use my $1,000 for this strategy’ or even provide more granular control through a settings sort of dashboard.”
AI agents are structured to execute particular duties autonomously or semi-autonomously on behalf of users. These tasks can vary in complexity, ranging from straightforward tasks, such as automating repetitive actions, to more intricate ones, such as decision-making in dynamic environments based on pre-established criteria or learned experiences.
The complexity and adaptability of their operations determine the distinction between AI agents and AI-powered trading programs. While AI agents can assist in optimizing asset allocation and portfolio management, trading bots are specifically engineered to automate the purchasing and selling of assets.
To ensure the privacy of credentials, the network implements a sharding mechanism. The system generates a new delegated authorization key for each user, as per Biconomy. This key is subsequently fragmented into multiple shards and disseminated across a decentralized network of nodes, ensuring no single node can access the complete key.
Jindal stated, “To guarantee that each node in the DAN network is functioning as intended, DAN employs EigenLayer to protect Ethereum’s economic security.” Ethereum holdings of validators in the EigenLayer network are liable to slashing in the event of malicious activity.
“AI will soon engage in on-chain transactions, and DAN facilitates this securely without sacrificing self-custody.”
The finance sector will likely experience accelerated growth in the AI agent market. A report from Grand View Research predicts that the global market for autonomous AI and autonomous agents will reach approximately $70.53 billion by 2030, with a compound annual growth rate of 42.8% from 2023 to 2030. Financial institutions employ AI agents to automate trading, manage risk, and detect deception, among other applications.
