Revolutionizing Trading: The Role of AI Bots in the Digital Asset Market

AI trading bots can execute buys and sells for investors.

They're a potential game changer, and they're moving to blockchain.

I spoke to Jack O'Halloran, who is the CEO and co-founder at Scale Labs, to hear about the integration between these technologies.

Take a look.

Well, first and foremost, to help our viewers understand better, can you explain the role that AI trading bots are playing in the digital asset market?

Yeah, it's a very interesting premise where you can actually have this intelligent bot which before a few years ago, these bots we had were unintelligent.

Now you can tell when, hey, here's go, you know, take X amount of, of assets, go trade for me, deploy a strategy, make sure you are somewhat aggressive but somewhat conservative, and you can talk to it like it's a financial advisor.

Imagine if you're, you had a buddy who was You know, a hedge fund manager and they work for you full time.

Well, that's what these bots can do for any normal person, which really I think levels the playing field and brings up some new interesting features.

Yeah, and Jack, I understand that scale launch fair blockchain, the first L1 to eliminate MEV at consensus.

So tell us a little bit more about this and what's the goal here?

Yeah, well, I think the first thing to note is we look at blockchain today and in a lot of ways we're still in the early days.

We're in the stone ages, OK?

There's something called MEV which frankly is called maximal extractable value.

OK, that's the feature and what it is, it means that validators constantly are running bots that take money from individuals now.

If you're an individual and you just trade, you know, something twice a day or once a day, well, the vast the amount, the full quantity of the manipulation or the value extract is going to be low.

But if you're using an AI agent, that grows massively.

In addition, you know, with MEV, uh, we're limited in what features we can use in DFI.

In DFI, you can't even do limit orders.

You can't even do, you don't see any indexes, and that's because of MEV.

So we're building fair.

Essentially to stop MEV and help DeFI come into the next stages and be able to utilize the gentech AI.

Yeah, and we all know that with opportunity comes risk.

So crypto traders can face an annual loss of up to $1 billion due to maximal extractable value across leading blockchains.

So can you weigh in on some of the risks here?

Yeah, well, you know, that's the thing.

There's already a risk any time you're trading, you're swapping assets, moving assets.

Well, throw in the fact that, you know, these, you know, validators could sandwich attack you.

You can be front run, you can be back run, and that's because validators get to see the transactions that come into the blockchain.

A blockchain is a transparent database, OK?

Now if you're trading on NYSE or Nasdaq, that doesn't exist.

No one can come in and see your trade in advance and And, and do something to take money from you.

Now you can do that in blockchain, but Bay because of its encryption, doesn't allow that to happen, which I think is pretty transformative.

And already billions of dollars are being taken from end users over the course of each year.

But on top of that, what's even more punishing is that we just can't utilize these features that you can utilize in traditional finance in DeFi.

So we're building this to help take DFI to the next stage.

And speaking of which, can you weigh in on some of the technology that is underlying this because we hear about the intersection of blockchain and AI and how some of these bots actually work, but tell us about the technology.

Yeah, well, the beauty of blockchain is that it's this database that everybody who runs one of the servers gets to see all the information, OK?

And then the rest of us, if you're not running one of these servers or nodes, you can see clearly everything that's happening.

OK, now with the technology that we're helping develop here, what it does is it actually encrypts that information so validators, the people who run these servers or nodes. can actually continue to do their job without being able to see information until it's public.

OK, so it takes away the ability of people to have asymmetric information based off of what's coming into the chain while at the same time not hurting the piece of blockchain that works that makes blockchain so great, which is the immutability, transparency, and coordinate decentralized nature of blockchains.