Original Article Title: AI Trading with DeFAI: Welcome to the Next Era of On-Chain Automation
Original Article Author: @danielesesta, DeFAI Researcher
Article Translation: zhouzhou, BlockBeats

Editor's Note: The future of DeFAI has completely transformed the way DeFi trading works, using AI to convert simple text commands into executable on-chain strategies. Whether it's dollar-cost averaging (DCA), take-profit/stop-loss, or volatility management, the system can accurately execute them without manual intervention. It simplifies complex trading strategies, allowing even ordinary users to enjoy hedge fund-level tools, truly achieving a "set it and forget it" approach.

The following is the original content (slightly rephrased for better reading comprehension):

One of the main criticisms of decentralized trading is that, compared to traditional finance or top-tier centralized exchanges, it lacks mature trading tools. In the past, DEX traders often had to watch the screen constantly, ready to click "buy" or "sell" at any moment, with limited automated means and even basic stop-loss mechanisms not being very intuitive to implement on-chain.

DeFAI (AI + DeFi) and Hey Anon were born from this. These platforms, through AI-driven smart agents, implement condition-based complex trading strategies without human intervention. Ultimately, users can enjoy advanced functionalities comparable to or even surpassing those of centralized trading platforms, truly bringing automated trading, risk management, and conditional trigger logic into the decentralized trading world.

Limitations of Existing Decentralized Trading

· Limited Tools and Interfaces: While DEXs have developed rapidly, they still lack the advanced features of centralized exchanges—even providing limit orders is cumbersome, and advanced trigger mechanisms such as trailing stops, ATR-based position sizing, or layered DCA are basically absent.

· High Dependence on Manual Operation: Traders often need to closely monitor the market to execute entries and exits or partial take-profit actions in a timely manner. If they step away from the screen and miss the sell opportunity, they can only blame themselves.

· Inadequate Risk Management: Current risk control measures mostly involve "manually setting stop-loss" or "reducing position size" as basic operations. However, in the real market, especially with meme coins or newly listed tokens, where volatility is high and liquidity changes rapidly, more sophisticated risk management mechanisms are needed.

These issues have made it challenging for many users to fully engage in decentralized trading, despite the permissionless nature of on-chain transactions offering great autonomy, innovation, and global participation.

DeFAI: Rethinking the Game Rules of Decentralized Trading

DeFAI combines AI logic with DeFi smart contract interactions. The architecture built by Hey Anon can:

1. Automatically execute on-chain transactions based on conditional events without the need for manual intervention;

2. Allow ordinary users to easily create complex AI trading strategies through simple natural language commands (e.g., "If Y happens, then buy X");

3. Integrate advanced risk management systems to reduce the operational barriers and potential risks of DEX trading.

This transformation will bring unprecedented intelligence and convenience to decentralized trading.

From Instruction to Executable On-Chain Strategies

One of the most significant features of Hey Anon's AI architecture is its ability to translate simple English instructions into actual executable on-chain operations. Traders do not need to switch between multiple interfaces or write custom scripts; they only need to describe the strategy in a single sentence, such as:

"When Coin A profits by 50%, sell half, set a trailing stop loss of 2 times ATR for the remaining part, and exit all positions when the gain reaches 300%."

The AI agent will automatically handle each step, from price monitoring to trade execution, and even cross-chain operations, streamlining the entire process.

Advanced Tools at Your Fingertips

1. DCA (Dollar-Cost Averaging) Buy Strategy

Dollar-cost averaging is a proven investment method, but decentralized platforms have always had limitations in automation. Hey Anon provides the following DCA methods:

· Fixed time intervals: "Buy $50 of Token Z every 4 hours."

· Price triggers: "If the price retraces 10% from the previous high, make an additional 10% purchase."

· Volatility-based DCA: "Accelerate buy frequency when volatility exceeds a set threshold to capture lower prices during a downturn."

· Portfolio-based DCA: "Purchase 2% of a stablecoin asset daily into a new memecoin, but only for tokens with liquidity above a set threshold."

These trigger mechanisms reduce the uncertainty of manual operations. The AI agent monitors the market 24/7 to ensure no trading opportunities are missed.

2. DCA (Dollar-Cost Averaging) Sell Strategy

An orderly exit from the market is equally crucial, and Hey Anon provides various intelligent sell options:

· Price Target Trigger: "Sell 25% at +50%, another 25% at +100%, and liquidate the remaining at +200%."

· Trailing Stop Loss DCA: "Automatically adjust the stop loss range based on token volatility and sell gradually."

· Time-Based Batch Selling: "Upon reaching the target profit, sell in batches within a fixed time window (e.g., 1 hour) to reduce slippage or price impact."

3. Risk Management and Advanced Strategies

In volatile on-chain transactions, risk management is crucial. DeFAI offers advanced risk control features:

· Dynamic Position Adjustment:

  "Reduce position by 50% if the ATR (Average True Range) doubles."

  "Increase position when the market volatility contracts and liquidity is healthy."

· Kelly Criterion:

  Calculate the optimal fund allocation ratio based on historical win rate and expected risk-return.

· Time/Event-Based Exit Strategies:

"Close 30% of the position in the first 10 minutes before the Fed announcement."

"Linearly sell if a token is listed on exchange X within the next 5 minutes."

4. Liquidity Monitoring:

"Stop purchases if the daily trading volume is below 30% of the average or if the buy slippage exceeds 5%."

Imagine you have such a strategy:

"Monitor token $X, DCA $69 every 420 seconds. If the price retraces 80% from the previous high, switch to buying every 69 seconds until the position reaches $6,900. Initially set a trailing stop loss at 0.5 times ATR; if in a profitable state, expand it to 2 times ATR. Sell the initial principal at a 120% profit and liquidate the entire position at 300% profit. If the ATR doubles in a profitable state, reduce the position by 30%. If the token is listed on exchange Y, perform 69 linear sells within 5 minutes."

In a traditional environment, executing such a strategy would require manual monitoring, setting numerous limit orders, or relying on third-party bots (often facing trust or reliability issues). However, within Hey Anon's DeFAI system, all these operations can be completed through a simple conversation. The AI agent will automatically translate each condition into a series of on-chain execution actions.

Reshaping Decentralized Finance

The impact of this AI revolution on the DeFi space cannot be underestimated:

1. Breaking Free from Screen Monitoring
Traders can define strategies to let AI handle buy/sell orders and risk management, freeing them from constantly watching the screen, breaking away from the intense monitoring of memecoins or altcoins markets.

2. Democratizing Advanced Trading Tools
Technologies previously exclusive to hedge funds, such as volatility-based position management or the Kelly criterion, are now available to the average user, significantly lowering the entry barrier.

3. Unleashing Trading Creativity
With just one command, you can combine cross-chain operations, token sniping, partial profit-taking, event-driven adjustments, and even multi-token layered strategies—the only limit is your imagination.

4. Building a Safer Trading Environment
Through rigorous risk management, reducing liquidation events and total loss of funds, even in high volatility environments of new assets, can foster a healthier ecosystem development.

Future Outlook: Infinite Possibilities

DeFAI is not just a few advanced trigger conditions or a better user interface but a paradigm shift. The entire system is driven by on-chain code and AI logic, strictly executing user-defined commands and possessing evolutionary potential:

· Integrating foundational data (such as GitHub project updates or social sentiment) into trigger conditions.

· Providing advanced analysis akin to professional research institutions, combining advanced data analytics with direct execution capabilities.

· Expanding to multi-token or cross-chain strategies, bridging liquidity across multiple ecosystems, compounding yields, and automatically managing gas fees and cross-chain complexities.

The wave of innovation has already begun. The future of DeFi may be a unified ecosystem controlled by AI agents, covering everything from yield farming to token issuance to complex derivative strategies—and users won't need to manually confirm each step or switch between multiple dApp interfaces.

Hey Anon stands at the forefront of this DeFAI transformation. With security, transparency, and intuitive AI trading commands at our core, we are ushering in an unprecedented era of automation in the DeFi space.

Conclusion: Imagination Is Just the Beginning

The era of 24/7 monitoring and 2 a.m. manual trading is coming to an end. We are now at the threshold of on-chain AI trading, which can:

1. Monitor the Market

2. Calculate Risk

3. Execute Operations on Your Behalf in the Most Precise Manner.

From advanced dollar-cost averaging strategies to intricate volatility risk controls, DeFAI makes "set it and forget it" a reality—even in the chaotic world of meme coins and new token launches.

This is a truly revolutionary change as it opens up decentralized trading to everyone—whether you're a newbie seeking a secure and stable strategy or an expert envisioning multi-condition, multi-asset trading scenarios. And the best part? You just need to unleash your imagination, provide simple natural language commands, and create entirely new ways of trading.

Welcome to the Hey Anon era—AI-powered trading that enables any user, regardless of experience, to harness advanced automation strategies and turn DeFi into a world full of endless possibilities.

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