Exploring the intersection of Generative AI and Web3: Platforms aim for better security

As new technologies continue to evolve, they will show new potential to address lingering issues and exacerbate societal challenges. Take Generative AI and web3 for instance. Both have shown promising solutions related to data privacy, equitable access to services, and job displacement.

The?Dartmouth College researchers?who coined the term "artificial intelligence" in 1956 would be amazed by today's industry's progress. In 2022, AI demonstrated its potential with innovations like OpenAI's DALL-E and ChatGPT passing the Turing test. Now, Generative AI is a key focus area that has implications for the future of various sectors.

Although AI has gained traction, Web3 is still unfamiliar to many.

Web3, the third generation of the internet, is?mainly founded?on blockchain and cryptocurrencies, but it also incorporates other technologies, such as the Internet of Things and big data. These tools allow decentralized applications to analyze data with remarkable precision and human-like sophistication within the Web3 ecosystem.

Web3 is a relatively complex technology that requires a certain level of technical knowledge to understand, making it less inclusive than AI. In addition, unlike many popular Generative AI tools, Web3 has yet to be widely adopted or integrated into everyday applications and services. Nevertheless, both have more potentials to offer when combined.

Creating a symbiotic relationship

According to Yat Siu, co-founder and executive chairman of Animoca Brands, in?his recent piece on CoinBase, the?recent demand for a pause?or shutdown in AI research, coming from influential individuals in the industry, is based on flawed thinking. Siu argued that the concern should not be about an out-of-control AI killing us all but rather about ensuring that the economics of AI do not encourage such outcomes.

“The task is to ensure that the economics of AI don’t intrinsically encourage that horrific result. We must prevent concentrated control of the inputs and outputs of AI machines from hindering our capacity to act together in the common interest,” he wrote. “We need collective, collaborative software development that creates a computational antidote to these dystopian nightmares.”

The financial sector has already been disrupted by crypto and Web3. Despite turbulence in 2022, more people are looking toward?decentralized and trustless technology.

AI has the potential to significantly impact web3 and the decentralized internet as a whole. The potential for innovation driven by AI and Web3 is vast. Imagine a world where your AI assistant could manage your finances, schedule appointments, curate your NFT art collection, and even help you file crypto taxes. It may seem like science fiction, but these technologies are converging to make this digital utopia a reality.

As AI rolls out, a user-centric and secure internet experience requires Web3 to empower and innovate. AI assistants like ChatGPT can help build online reputations and curate NFT art collections tied to a user's digital ID.

One of the ways that AI can change web3 is by enabling new forms of decentralized decision-making. With AI algorithms, dApps can automatically analyze data and make intelligent decisions based on that data without the need for human intervention. This can enable more efficient and accurate decision-making in areas such as finance, supply chain management, and healthcare. By enabling decentralized decision-making, providing personalized user experiences, and improving governance, AI can help unlock the full potential of decentralized applications and smart contracts.

Another way that AI can change web3 is by enabling more personalized user experiences. For example, AI algorithms can analyze user behavior and preferences to provide personalized offerings, leading to more engagement and better user retention.

Furthermore, AI can also help with the governance of decentralized networks. For example, AI can be used to monitor the network for potential security threats, identify malicious actors, and make decisions on how to respond to security incidents.

To harness the best of both, some have taken the leap of faith to pair the two innovations.

The future of security

AI cybersecurity tool developers assert that their primary aim is to?decrease the occurrence of false positives. According to Acumen Research, the global market for AI cybersecurity is anticipated to reach $133.8 billion by 2030.

AI is being employed by companies at a corporate cybersecurity level to identify any deviations from normal network activity paired with firewalls. Often, stolen funds from crypto scams are converted to censorship-resistant cryptocurrencies and then passed through mixers like Tornado Cash to conceal their source and destination. Forensic companies, such as Chainalysis, PeckShield, and Elliptic, can provide transaction data to train AI models to detect suspicious transactions.

Cyvers.ai, on the other hand, employs geometric machine learning to learn and identify anomalous behaviors from typical crypto users. It recommends on-chain and off-chain analysis in real-time with alert systems for critical wallet addresses or smart contracts.

In their Web3 security report,?the company revealed?that smart contract audits alone are inadequate in preventing crypto scams, as audits of smart contracts were implicated in around 52% of security breaches. Human errors such as compromised keys also contributed to 30% of Web3 hacks in 2022.

Meanwhile, security firm AnChain.ai's CEO, Dr. Victor Fang believes that the first step in developing a comprehensive risk management framework is?conducting a smart contract audit, which uses machine learning to identify smart contract anomalies alongside a multichain analytics platform.

He claims that smart contract exploits resulted in a loss of $4 billion in funds in 2022, with victims losing roughly $200 million per incident. The theft of more than $600 million through the exploitation of?Harmony's Horizon Bridge?and the $566 million?Binance Smart Chain hack?are among the notable security breaches.

For that reason, AnChain.ai seeks to expose fraudulent cryptocurrency schemes and illicit money flows within the blockchain. The firm is introducing a new framework called Web3 SOC, aimed at reducing the seven-day detection window for smart contract exploits in 2022 to a shorter duration.

The company aims to close the gap between Web3 and traditional cybersecurity breaches, as Web3 projects generally respond to hacks nearly 40 days after the exploit. In contrast, conventional cyber breaches are detected within five hours.

Furthermore, AnChain.ai assists authorities in detecting money laundering by identifying whether companies violate the Bank Secrecy Act. The firm's technology is used by the Internal Revenue Service to scrutinize digital asset filings and investigate white-collar crime.

Meanwhile, Cambridge-based AI tool developer Fetch.ai is introducing its?advanced suite of trading products?for decentralized exchanges. The firm aims to streamline peer-to-peer transactions between decentralized finance users by leveraging AI-powered "agents" to execute trades based on user-defined criteria.

The suite of trading tools is set to be released later in the current quarter. Users will be able to submit their orders to an agent, which will then place the order in escrow or an atomic transaction while searching for suitable order matching. According to CEO Humayun Sheikh, the platform's ability to locate and generate liquidity is where it excels, as agents collaborate to establish decentralized order books.

The use of individual agents rather than a liquidity pool reduces the risk of cyber attacks since there is no central pool of coins for hackers to target. Moreover, by using their own smart contracts, the agents eliminate the risks associated with rug pulls or exploitation of the smart contract at the core of a DEX.

"A hacker would have to hack every single agent,” said Sheikh. “They couldn't just hack the central smart contract because there isn't one.”

HyperproAI is taking the same direction,?offering new features and ways of earning cryptocurrency, attracting the crypto community's attention during the ongoing presale of its native token, HPO.

The platform aims to create a complete suite of professional DeFi applications using AI that enables automated trading strategies. Its AI marketplace allows users to access services and resources listed on the platform, including a finite number of free API calls, pricing information, and reputation rankings.

Additionally, users can pay directly for additional services using HPO tokens or fiat currency via Paypal integration.