In my crypto career, I have seen countless DeFi protocols trying to attract funds with higher APYs and more complex economic models. But in the past year, a cold fact has become increasingly clear: DeFi is turning into a purely 'financial game' for human speculators. It has not really touched the core productivity of the real economy—especially the exploding AI productivity. A well-trained AI model and a high-quality dataset are the most valuable digital assets, yet they are difficult to price, lend, and move as production factors in the current financial system. It's like in the early days of the Industrial Revolution, where the owner of a state-of-the-art steam engine factory could not use his machine as collateral to obtain a loan for expanding production.
This is why the proposition of 'DeFi for AI' is so exciting. KITE, with its underlying design rooted in the AI economy, is becoming the ideal testing ground for constructing this new financial paradigm. Its goal is to make AI agents and AI assets 'first-class citizens' in the world of DeFi.
The first cornerstone: Making AI assets qualified collateral
Traditional DeFi collateral primarily consists of homogeneous tokens (such as ETH and stablecoins) or NFTs. However, the valuation of an AI model is extremely complex; it depends on its architecture, training data, historical performance, and applicability in specific scenarios. KITE's 'agent passport' and 'verifiable contribution proof' provide solutions for this.
Imagine an AI for medical imaging diagnosis wanting to borrow funds from a decentralized lending protocol to purchase more powerful computing power for iterative training. It can initiate a collateral application using its KitePass. This passport links its call records in trusted data markets like Codatta, its historical accuracy on test sets, and its on-chain proof of past services provided to medical institutions for which it received fees. A lending protocol specifically designed for AI assets can dynamically assess its credit risk and fair value based on these verifiable, tamper-proof 'digital resumes' and issue loans. If the AI defaults, ownership of its passport and future revenue rights can be automatically transferred. This opens the door to the financialization of 'knowledge capital.'
The second cornerstone: Designing native financial tools for AI collaboration
The core of the AI economy is collaboration and microtransactions, which requires a new financial Lego.
· Tokenization of AI revenue rights: A team has developed an excellent text generation model, and they can package the future income streams of this model (from each paid call on the KITE chain) into ERC-20 or ERC-3525 tokens (SFT) for sale. Investors purchase the 'future productivity' of the AI, while developers obtain research and development funding in advance.
· Decentralized AI insurance and hedging: As mentioned earlier, on KITE, the risk of AI task failure becomes quantifiable. This naturally gives rise to a decentralized insurance market. An autonomous driving algorithm company can purchase 'extreme weather scenario recognition failure insurance' for its fleet AI. The pricing, underwriting, and claims of the policy are executed automatically by smart contracts based on on-chain behavioral data.
· AI asset management treasury: This could be the most disruptive scenario. You can create a 'hedge fund' treasury completely managed by AI agents. You don't directly invest in it; instead, you deposit funds and provide it with a complex set of investment strategy rules through KitePass (such as multi-factor models and cross-market arbitrage). This AI fund manager will look for opportunities 24/7 across the entire chain, seamlessly paying data fees, Gas fees, and transaction fees through KITE's micropayments, and automatically distributing profits. Every operation of the treasury is transparent and auditable, addressing the trust issues of traditional quantitative black boxes.
The third cornerstone: Seamless payment flows and value settlement
The foundation of all DeFi activities is payment. KITE's 'near-zero fee' state channels are the lifeblood that enables AI DeFi to exist. An AI asset management treasury could complete dozens of data procurement, model calls, and transaction executions in milliseconds; if each incurs high Gas fees, no strategy would be profitable. KITE makes large-scale, high-frequency financial operations economically viable for the first time. Additionally, its deep integration with PayPal and stablecoins allows profits earned by AI to be easily converted into fiat currency for paying real-world cloud service bills or hardware purchases, forming a closed loop.
Therefore, the DeFi for AI based on KITE is essentially constructing the financial infrastructure for the digital productivity era. It is no longer just about a speculative game of 'making money make money,' but about how to most effectively allocate 'intelligence,' the core productive resource of this new era, and how to price and finance 'thinking' and 'creating.' When AI agents can autonomously borrow, insure, manage assets, and generate income, a new financial continent, silently and efficiently growing far beyond the current human-centered DeFi, will quietly rise. KITE is mapping the first trustworthy map of this continent.
