Web3 infrastructure firm Biconomy is onboarding artificial intelligence (AI) agents to enable on-chain transactions on behalf of users.
The Delegated Authorization Network (DAN) is “relatively new” and serves as an authorization layer that allows the delegation of trading activities to AI agents, Biconomy co-founder Aniket Jindal explained to Cointelegraph.
Authority delegation means agents can autonomously manage trading accounts, executing transactions under previous instructions. After permissions are defined with a decentralized application (DApp), it can receive personalized input from users regarding allocations and trading strategy.
“Essentially, DAN allows users to delegate certain transactional tasks and authorizations to AI agents, granting them the ability to act on the user’s behalf within predefined parameters,” Jindal explained, adding:
“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 programmed to perform specific tasks autonomously or semi-autonomously on behalf of users. These tasks can range from simple, such as automating repetitive actions, to complex, like decision-making in dynamic environments based on pre-set criteria or learned experiences.
The difference between AI agents and AI-powered trading bots relies on the complexity and adaptability of their operations. While AI agents can help optimize asset allocation and portfolio management, trading bots are specifically designed to automate asset buying and selling.
The network uses a type of sharding mechanism to grant keys privacy. According to Biconomy, the system generates a new delegated authorization key for each user. This key is then fragmented into multiple shards and distributed across a decentralized network of nodes, ensuring no single node can access the full key.
“To make sure that each node in the DAN network is performing as intended, DAN leverages EigenLayer for Ethereum’s robust economic security,” said Jindal. Validators in the EigenLayer network restake their Ethereum holdings, subject to slashing if malicious activity is detected.
“AI will soon engage in on-chain transactions, and DAN facilitates this securely without sacrificing self-custody.”
The market for AI agents, specifically in the finance sector, is expected to grow rapidly. By 2030, the global market for autonomous AI and autonomous agents is forecast to reach approximately $70.53 billion, with a compound annual growth rate of 42.8% from 2023 to 2030, according to a report from Grand View Research. Financial institutions are leveraging AI agents to automate trading, manage risk, and detect fraud, among other use cases.
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