Biconomy, a Web3 infrastructure company, is introducing artificial intelligence (AI) agents to facilitate on-chain transactions for users. The Delegated Authorization Network (DAN) is a relatively new concept that acts as an authorization layer allowing users to delegate trading activities to AI agents, as explained by Biconomy co-founder Aniket Jindal in an interview with Cointelegraph.
Through authority delegation, AI agents can independently manage trading accounts and execute transactions based on predefined instructions. Once permissions are established within a decentralized application (DApp), users can provide personalized input to the AI agents regarding allocations and trading strategies.
In essence, DAN enables users to delegate transactional tasks and authorizations to AI agents, empowering them to act on behalf of users within specified parameters. AI agents are designed to carry out tasks autonomously or semi-autonomously, ranging from simple actions like automating repetitive tasks to complex decision-making in dynamic environments based on pre-defined criteria or learned experiences.
The distinction between AI agents and AI-powered trading bots lies in the complexity and adaptability of their operations. While AI agents focus on optimizing asset allocation and portfolio management, trading bots are specifically programmed to automate buying and selling assets.
To enhance privacy and security, the network utilizes a sharding mechanism to create delegated authorization keys for each user. These keys are then fragmented into multiple shards and distributed across a decentralized network of nodes to prevent any single node from accessing the complete key.
In order to ensure the proper functioning of each node within the DAN network, EigenLayer is employed for Ethereum’s robust economic security, according to Jindal. Validators in the EigenLayer network stake their Ethereum holdings and face penalties if any malicious activity is detected.
The market for AI agents, particularly in the financial sector, is expected to experience rapid growth. A report from Grand View Research predicts that by 2030, the global market for autonomous AI and autonomous agents will reach approximately $70.53 billion, with a compound annual growth rate of 42.8% from 2023 to 2030. Financial institutions are increasingly turning to AI agents to automate trading, manage risk, and detect fraud, among other applications.