The Cambridge-based artificial intelligence lab Fetch.ai Ltd., which develops AI-powered agents for peer-to-peer applications, today announced the development of new trading tools for decentralized cryptocurrency exchanges.

The new platform will use AI agents that can execute trades on the behalf of users, ensuring the best possible trade outcomes and reducing the need for manual intervention. At the same time, autonomous agents can be programmed with user preferences and fine-tune strategies based on market conditions while allowing users to interact across markets in a peer-to-peer manner.

Decentralized exchanges are part of a larger economy known as decentralized finance or DeFi, a token economy built on blockchain technology that allows for peer-to-peer transactions directly between users. This opens opportunities for Fetch.ai’s platform of machine learning algorithms to track market conditions to connect buyers and sellers for maximum impact, the company argues.

Because each seller and buyer is directly connected, it means that trades happen with one-to-one smart contracts on the blockchain, instead of large liquidity pools involving multiple trades and users. Large pools of crypto tokens are obvious targets for hackers and insider exit scams known as “rugpulls” where the holder of the crypto wallet simply takes all the tokens.

“As we stand at the forefront of a new era in the DeFi sector, with rapidly evolving technologies and innovations, we recognize the need to go deeper into decentralization,” said Fetch.ai Chief Executive Humayun Sheikh. “AI agent-based trading has enormous potential to remove central points of failure and solve some of DeFi’s biggest problems such as liquidity contract hacks and rugpulls, which cost the industry billions of dollars a year.”

During the first quarter of 2023, crypto protocols and markets lost more than $452 million to hacks and scams, according to a report from De.Fi Security, which tracks these trends. Although these numbers may seem large, they are much lower than the same period in 2022, which saw $1.3 billion in losses. Many of these thefts and losses come from exploits in crypto protocols and vulnerabilities in blockchain smart contracts.

The company recently closed a $40 million funding round led by DWF Labs to advance the development of autonomous agents and AI technology. Fetch.ai has already produced autonomous AI travel agents capable of connecting people to over 770,00 hotels worldwide via the Amadeus global distribution system and booking rooms on their behalf. It also piloted a smart parking space management program in Germany to match parking space supply and demand.

Fetch.ai’s new tools are slated for general release in the second quarter of this year. The company says they will be the first of their kind to hit the market.

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