CZ Pushes for AI-Powered Privacy in Decentralized Exchanges

Former CEO of Binance Changpeng Zhao (CZ) appeared at the WebX conference in Tokyo in which he pushed for integrating AI-powered privacy in Decentralized Exchanges (DEXs). His remarks have been taken as a great suggestion. It underscores the growing focus of the industry on combining AI-driven innovation with blockchain to improve efficiency, user experience, and privacy.

After his departure from Binance, CZ has led investments through his firm EZ Labs. He argued that the integration of AI is fundamental in reshaping DEX operations. He gave the example of platforms like Hyperliquid and how they have been successful in providing privacy-centric trading. He also suggested that the combination of AI with blockchain infrastructure has the potential to make Decentralized Finance (DeFi) more efficient and secure.

“Crypto will become the natural medium of exchange for AI, bypassing traditional fiat, banks, and credit cards. I envisage hundreds or thousands of AI agents per person, generating a surge of microtransactions via programmable blockchain networks,” Zhao said.

His vision involves a shift away from reliance on traditional banking. He also suggests that AI-driven trading tools have the potential to enable almost instant transaction while securing the users from risks such as market manipulation and front-running.

Integration of AI into DEX

While the suggestion by CZ is great, there are significant regulatory concerns when it comes to integrating AI into DEXs. As the trading systems will evolve, governing bodies will need to revisit and revise their crypto bills to address these advanced, privacy-focused models. However, CZ argues that such forward-looking policies could accelerate the adoption of AI-enhanced DeFi platforms and further encourage institutions to participate in the blockchain industry.

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Experts say that AI is more than just a way to make things run more smoothly. AI could change the way traders and investors deal with digital assets by giving them tools like real-time fraud detection, predictive analysis, and automated portfolio management.

Zhao's suggestion also raises the need for DEX models that better protect users' privacy. He suggests that future exchanges could have features like dark pools that would safeguard traders against forced liquidations, miner extractable value (MEV), and other risks.