Risk Management of Future of Defi Using Artificial Intelligence as a Tool

Abstract

This chapter explores AI's pivotal roles in managing risks within DeFi, emphasizing strategic implementation to enhance risk assessment, management, and decision-making processes for a better user experience. The convergence of AI and DeFi presents unprecedented opportunities, fostering transparency and decentralization. Drawing from diverse sources, the study evaluates AI's effectiveness, particularly in machine learning, in addressing emerging risks. It focuses on how AI can guide DeFi's future while managing market and credit risks through tasks like data preparation, modeling, stress testing, and validation. Additionally, AI aids in data quality assurance, text mining, and fraud detection. Emphasis is placed on identifying and managing risks that could hinder DeFi's future, highlighting key AI techniques. Given the financial industry's ongoing transformation, these insights are increasingly vital.