DeFi has experienced significant growth, but ongoing volatility remains a characteristic feature as the year 2025 approaches its end. The ecosystem reached a record total value of 237 billion dollars locked in the third quarter of 2025, but the joy was short-lived. By the end of November, the total value had decreased by 55 billion dollars, dropping to 123 billion dollars.
Despite these sharp fluctuations, DeFi participation has not only remained stable but has grown significantly. Over 14.2 million wallets were involved in the ecosystem this year, and Ethereum continues to capture around 63% of all DeFi activity.
This high level of participation is seen as a testament to DeFi's potential. However, some experts believe that volatility has revealed a fundamental challenge: the need to react continuously to market conditions, which puts success opportunities beyond most users' reach.
Users are expected to continuously follow liquidity pools, adjust positions, and navigate fluctuating arbitrage opportunities. This has created a paradox where, despite the claimed self-growing money, DeFi participants are indeed burdened with time-consuming, manual tasks to optimize their yields.
One example of this perspective is Ron Bodkin, a former Google executive who now leads the AI Agent Protocol Theoriq team. Bodkin claims to have seen the burden on ordinary users grow as DeFi expands.
"Most people came to DeFi hoping their money would work for them," Bodkin says.
"But somehow it became a situation where they are working for their money: checking charts at midnight, adjusting areas between meetings. This is somewhat upside down and wears users out."
According to Bodkin, true passivity is not achieved by asking users to do more and more, but by rethinking how yield is managed overall. This sounds less like aiming for returns from past recycling and more like seeking tools that do not depend on users tracking their wallets.
Bringing AI into DeFi without the black box problem
Theoriq's new protocol, AlphaVault, fits into a broader shift towards more autonomous forms of DeFi management. Over the past year, more and more projects have begun experimenting with integrating DeFi and artificial intelligence (sometimes referred to as DeFAI), using agents for automating routine decisions and managing fast-moving markets.
An experiment that has slowly transitioned from hackathon curiosity to something that protocol teams are now discussing as part of long-term plans. Bodkin adds:
"We see more interest in AI in DeFi, but the real challenge is ensuring that people can understand and trust what those agents are doing. Transparency must grow alongside automation, or none of this will scale in the desired way."
AlphaVault is one of those DeFi vaults experimenting with the use of specialized agents for direct management of user funds. Instead of relying on simple rule-based interest compounding tools, it employs a multi-agent system designed to adapt to changing market conditions. This arrangement was tested under real pressure in Theoriq's testnet, which handled over 65 million agent requests across 2.1 million wallets.
The team states that one of the key differences between this and other AI Agent protocols is the management of transparency and security. Previous attempts were often criticized for hiding how decisions were made.
AlphaVault approaches the issue with "policy cages," which are smart contract rules that precisely define what an agent can do, from asset types to position sizes. These limits are intended to give users a clearer picture of the system's operation and reduce risks that have appeared in previous AI experiments.
In the release, AlphaVault integrates with established, trusted partners in Ethereum's yield markets. These include Lido's stRATEGY vault, managed by Mellow Protocol, and Chorus One's MEV Max, powered by StakeWise.
These partnerships allow AlphaVault to target capital towards established Ethereum yield strategies that have been used throughout the ecosystem. The goal is to enable users to earn yield without constant scrutiny or position adjustments, though how well this works in practice depends on the system's long-term performance.
Liquidity bootstrapping, as many DeFi projects are doing today
Across DeFi, early participation programs have become a common way for projects to build liquidity and create a foundation for total value locked (TVL), allowing new systems to operate in real-world conditions. AlphaVault follows the same path.
To kick off the vault, Theoriq has launched an incentivized early phase where the community can lock ETH and earn points that can be converted into $THQ rewards. As this phase progresses, TVL will gradually shift from locked capital to live capital managed within AlphaVault's autonomous agents.
This is a familiar approach in DeFi, but in this case, capital does not just sit idle but acts as fuel for a system designed to operate under minimal supervision, the team claims.
Interestingly, how $THQ is planned to be used in the future. Instead of just serving as an incentive, Theoriq envisions it becoming a reputation token that allows users to stake behind AI agents believed to perform well.
If an agent behaves poorly or does not meet expectations, these stakes can be partially cut. This mechanism aims to keep quality high and prevent reckless behavior.
This approach reflects a broader industry effort to bring more responsibility to automated systems. Instead of relying on marketing claims or opaque performance reports, the idea is to let reputation be formed directly from how these agents behave over time.
In theory, it creates a system where trust is not based on personalities or promises, but on visible, on-chain performance, and where the community has a direct role in which AI agents earn more responsibility.
Where DeFi is heading after the era of yield hunting
Theoriq aims to shift the industry's discussion away from chasing higher APYs and towards reducing the expected workload for users. It is designed on the premise that developers are looking for ways to shift ongoing monitoring, rebalancing, and decision-making that most people still perform manually.
The goal is not to remove users from the process, but to build tools that handle routine, timely chain management tasks, so that people do not have to deal with DeFi as a side job.
The team says user interest is growing in systems that can operate in the background more reliably, responding to market conditions without them having to intervene every few hours. Such automation is increasingly seen as a natural next step for an industry that wants to mature, expand, and attract a broader audience.
These efforts towards more reliable, transparent on-chain automation may make Theoriq and its AlphaVault system sensible. AI-managed vaults could become the standard or remain early experiments, but the industry trend makes their arrival feel anything but coincidental.
