The combination of AI and decentralized finance (DeFi) is nothing new. A few years ago, several well-known projects began to integrate these two hot fields. Such attempts as Yearn Finance's automated yield aggregator and Aave's credit scoring system have continuously promoted the combination of AI and DeFi, making people gradually realize that the effect of the combination of AI and DeFi is "1+1>2", which complements each other and adds wings to the tiger.

As Vitalik Buterin said: "For ten years, the cross-application of encryption and artificial intelligence has been obvious, that is, the decentralized exchange (DEX) of robot market making. There are many promising ways to further expand to the arbitration mechanism in the prediction market and DAO."

What can AI bring to DeFi?

It can be seen that the difficulties faced by DeFi in its current development are mainly concentrated in complexity, security and user experience, and these problems can actually be solved by AI.

Cybersecurity and fraud detection have always been core issues in DeFi security. In 2023, there were 76 hacking incidents in the DeFi field, resulting in losses of approximately $1.1 billion. The application of AI in DeFi risk management has shown its great potential. By analyzing large amounts of data, AI can identify market, operational, and credit risks, thereby reducing losses and improving overall risk management strategies.

In addition to security issues, the complexity of DeFi also limits its widespread application. Users often find it difficult to understand and operate complex protocols, and market volatility and credit risks further increase the difficulty of participation. AI also plays an important role in reducing the complexity of DeFi. Through AI-driven chatbots and virtual assistants, users can more easily interact with DeFi platforms. These robots and assistants can guide users through complex DeFi operations, thereby improving user experience and lowering the threshold for participation.

In addition, AI can also analyze users’ portfolios, token trends, and whale transactions, and provide tailored recommendations, allowing users without a technical background to make wise investment decisions. In a more ideal state, AI can also provide fully automatic trading solutions for DeFi, and users can “free their hands” by setting a good investment strategy. AI analyzes historical data, tracks price fluctuations in real time, predicts market trends, and automatically executes transactions, making DeFi transactions more intelligent and data-driven.

In this field of combining AI and DeFi, there are indeed many projects that have made attempts, but the author believes that the one who can really come out of this track must be a project that understands DeFi better, not AI better.

Among them, we have to mention the old DeFi project Bella Protocol. On September 24, Bella Protocol announced its brand reshaping and launched a new product Bella Signal Bot on Telegram in combination with AI.

Uncovering Bella: Binance's first LaunchPool project

When it comes to Bella Protocol, many new crypto players may not be familiar with it, but in the eyes of senior insiders, this is definitely a veteran DeFi project worthy of attention. As early as four years ago, Bella was launched as Binance's first new coin mining (LaunchPool) project. This milestone not only established Bella's position in the DeFi field, but also demonstrated its forward-looking nature in the industry.

Bella Protocol has received support from many well-known investment institutions, including Binance Labs, Arrington Capital, DWF Labs, Alphabit and RockX. The participation of these strategic investors not only provides Bella with strong financial support, but also provides it with valuable resources and experience in market expansion and technological innovation.

Since its establishment in 2020, Bella has been committed to simplifying users' trading experience and optimizing cryptocurrency returns on multiple chains. Its products have been deployed on multiple blockchain networks such as zkSync, Mantle, Manta Pacific and Ethereum, aiming to provide users with more convenient and efficient DeFi services.

Earlier this year, Bella partnered with Phoenix (PHB) to build customized AI-driven features for its DeFi product suite using Phoenix’s AI computing layers – SkyNet, AlphaNet, and Hypermatrix. Through this partnership, Bella was able to integrate advanced AI technology into its products, further enhance user value, and expand market influence.

At the beginning of its establishment, Bella's vision was to liberate DeFi from the circle of elite geeks and developers and serve a wider range of mass users. To achieve this goal, Bella focuses on lowering the threshold for user participation, improving the platform's ease of use, and attracting ordinary users to join by optimizing the user experience and providing low-cost DeFi services. Its goal is to become the "BlackRock" of the crypto world, and continue to innovate in liquidity mining, yield aggregation, and simplified user experience. Related reading: "Aiming to become BlackRock, how will Bella promote the leap in DeFi user penetration? "

This brand reshaping and the launch of AI products are highly consistent with Bella's consistent mission, aiming to further popularize DeFi so that more people can easily participate in and benefit from the opportunities brought by decentralized finance. This is not only a continuation of its original intention, but also a positive promotion of the future development of the DeFi ecosystem.

4 major product matrices

After having AI products, the current four major product matrices of Bella Protocol are as follows:

The latest flagship AI product, Bella Signal Bot, is an AI-driven trading assistant that provides long, short and liquidation signals based on AI models and is directly integrated into Telegram. Traders can seamlessly receive reminders for their selected token pairs and make informed trading decisions.

One of Bella’s “traditional” main businesses is Bella LP Farm, a yield agreement based on zkSync Era, Mantle Network and Manta Pacific. By staking LP tokens, users will receive optimized liquidity returns.

Another important product in Bella’s “traditional” business line is Bella Flex Savings V2, an efficient smart liquidity pool that automatically compounds returns and provides a low-fee wealth management experience, running on Ethereum since February 2021, with a maximum TVL of over $40 million.

In addition, Bella Protocol has launched a unique product for developers and quantitative strategists - Tuner, a programmatic Uniswap V3 simulator that enables users to backtest and optimize their quantitative strategies based on trading data, process arbitrary or historical data without relying on EVM, and run independently while fully retaining the design and implementation details of Uniswap V3 smart contracts.

5 major trading styles

The biggest highlight of Bella Protocol's rebranding this time is the trading signal bot - Bella Signal Bot, so let's talk about this new product next.

The function of Bella Signal Bot is simple. In a word, it can continuously monitor market data, analyze trends, and generate accurate "long" and "short" signals for selected perpetual token pairs.

However, what is special is that Bella Signal Bot is supported by five artificial intelligence models, which have led to five different trading styles, namely KnightML, ViperAI, AI Directional Risk, AI MeanRev and OptimaShort. The five AI models of Bella Signal Bot are introduced as follows:

For more details about these five models, please see Bella Protocol's official documentation. The following is the author's understanding and more popular interpretation for readers after testing:

KnightML

KnightML's style is like "Zhao Yun who went in and out seven times", flexible and maneuverable, and able to advance and retreat freely (the word "Knight" also means "knight"). This trading style provides adjustable trading frequency and risk exposure, and can adapt to different market conditions according to the trader's preferences. Whether you are going long or short, KnightML can adjust the signal according to your needs and tell users when to "attack" and when to "defend". It is suitable for traders who like to flexibly adjust according to market conditions.

ViperAI

Compared to KnightML, I feel that ViperAI is more like "Jia Xu, the first poisonous scholar in the Three Kingdoms" (the word Viper means "venomous snake"). This trading style is based on a deep learning model and can achieve neutral operations in long and short markets. It can find opportunities regardless of whether the market goes up or down. Users will receive "long", "short" or "close" signals, and there is also a 2% stop loss protection to ensure that the risk is always within a controllable range. This strategy is very suitable for traders who want to achieve stable returns in complex and volatile markets.

AI Directional Risk

AI Directional Risk is like Zhuge Liang who "follows the trend" and is good at seeing the big picture and grasping the main trend. This trading style divides the market into two main modes, helping traders determine when to follow the trend and increase their positions. This strategy is suitable for right-side traders who prefer trend tracking.

AI MeanRev

AI MeanRev's trading style is like Huang Zhong's "Hundred Steps Through the Willow", good at capturing short-term market fluctuations and hitting the target accurately. This trading style performs well in volatile and range-bound markets, and can find local highs and lows in prices, just like Huang Zhong's "Hundred Steps Through the Willow", not missing any short-term opportunities. AI MeanRev's average position holding time is about one day, which is very suitable for traders who want to quickly profit from short-term fluctuations, enter the market quickly, and exit the market quickly.

OptimaShort

The last trading style, OptimaShort, is like "Cao Cao in the bear market", good at finding opportunities in adversity. This trading style is designed for bear markets. Based on ViperAI's core technology, it has been optimized to keenly detect market downward signals and act quickly. When the market enters a downward trend, OptimaShort will send a "short" signal to help traders short and make profits in time. It also has a 2% stop loss protection to ensure that traders can protect themselves in the violent market fluctuations. It is especially suitable for traders who want to maximize their profits in a bear market, just like Cao Cao repeatedly found a breakthrough in adversity and made a comeback.

Hand in hand to teach you how to use Bella Signal Bot

As a trading signal bot, Bella Signal Bot, like all trading bots, needs to be used on Telegram. Therefore, you need to make sure that the notification of Telegram APP has been turned on in the phone settings in advance, so that you can receive the latest notifications in time when the market changes.

1. Enter Bella Signal Bot

After entering Bella Signal Bot from TG, you can see several functions of Bot, as well as the trading pairs and trading currencies that can be traded currently. (We will introduce them in detail later)

2. Select a token pair

Click Subscribe in the main menu on the start interface, or enter /subscribe in the input box to select the perpetual token pair whose currency price information you want to monitor.

After selecting one of the trading pairs, you need to select a trading style. As shown in the figure, an introduction to these styles will appear. You can also find a trading style that suits you in the above article "Bella Signal Bot's 5 major trading styles".

After selecting a suitable trading style, a message will pop up indicating that the trading pair has been successfully selected.

3. View subscribed token pairs

If you want to view all subscribed trading token pairs, you can return to the main menu at the beginning and click Show Subscribed Pairs, or enter /show_subscribed in the input box to display all your subscribed trading token pairs.

4. Unsubscribe a Token Pair

If you want to unsubscribe from a specific token pair, you can click Unsubscribe in the main menu, or enter /unsubscribe in the input box. In the Token Pair Unsubscribe Menu, click the token pair you want to unsubscribe. After the second confirmation, once the subscription is successfully unsubscribed, you will receive a confirmation notification.

If you want to unsubscribe from all selected trading token pairs, you can click Unsubscribe All in the main menu, or enter /unsubscribe_all in the input box.

For those who have not had enough fun after experiencing Bella Signal Bot, you can also look forward to Bella's new product that will be launched in early October. Bella will launch the Large Language Model (LLM) Research Bot. This new tool will provide traders with deeper market insights and help users analyze tokens, trends and market sentiment more accurately. What I am most looking forward to is that the cooperation between these two may create different sparks.

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