AI agents are coming for defi – wallets are the weakest links

Opinion: Sean Li, co-founder of Magic Labs

Crypto Markets is open 24/7. Human traders don’t. Once AI agents begin managing liquidity, optimizing trades at all times and running trades, they are quickly becoming an essential infrastructure for the future of decentralized finance (DEFI). AI agents have evolved from Quant Traders’ niche tools to mainstream financial operators, but are rapidly surpassing wallets to protect them.

While advances in account abstraction and smart contract wallets have emerged, most Defi platforms rely primarily on externally owned account wallets that require manual approval at every step. Although early stage programmable solutions exist, they remain fragmented, costly in layer 1 networks, and only a small percentage of users are employed.

As AI agents become more and more functional with Defi, this infrastructure limitation becomes important. A standardized infrastructure is needed that enables secure, cost-effective automation with verifiable guardrails across multiple blockchain ecosystems.

Automation requires non-applicable guardrails

The rise of autonomous agents opens up new possibilities, such as hands-free deforeing strategies, real-time portfolio optimization, and cross-chain arbitrage. However, without programmable privileges and on-chain visibility, delegating control to AI can put users at catastrophic risk. Malicious bots, hallucination agents, and poorly designed automation can drain your wallet before human notifications.

We’ve already seen what happens when the agent infrastructure fails. In September 2024, users of the telegram-based trading bot Bananagan lost 563 ether (ETH) (approximately $1.9 million) through a vulnerability in an exploited oracle that allows attackers to intercept messages and gain unauthorized access to user wallets. Recently, the attacker violated the AIXBT dashboard and issued a command to transfer funds directly, resulting in a loss of 55.5 ETH over $100,000. These are not isolated incidents. A warning sign of systematic vulnerability in automated infrastructure.

Legacy wallets cannot support autonomous agents

Despite years of wallet innovation, the architecture remains primarily static. Sign, broadcast and repeat the transaction. Most wallets are not built to understand “intention” or to ensure that automation matches user-defined rules or limits time, asset type, or strategy.

This stiffness creates all-or-nothing dynamics. Maintain manual control and miss out on the opportunity to move quickly or hand over access to opaque third-party systems entirely. To safely scale AI-powered Defi to build more utilities, you need a programmable, configurable, verifiable infrastructure.

Programmable permissions are the new trustees

Because smart contracts encode logic into DEFI protocols, wallet infrastructure must encode logic into user controls. This means that it allows for session-based authorization, cryptographic verification of agent actions, and the ability to revoke access in real-time.

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With these features in place, users can delegate transactions, rebalances, or implement strategies without giving up complete control. This approach not only reduces risk, but also increases access. Advanced Defi strategies can enable users to safely manage without technical knowledge by agents operating within verifiable constraints.

Programmable infrastructure makes Defi scalable

A programmable wallet infrastructure not only makes defi safer, but also scalable. Fragmentation of the chain and the entire protocol has long been a barrier to automated strategies. Universal Keystore protocols that synchronize privileges across networks can streamline cross-chain delegation and open the door to an interoperable agent ecosystem.

As institutional interest in Defi grows, secure automation cannot be negotiated. Most companies do not allow AI agents to interact with capital without verifiable guardrails. Just as proof of zero knowledge has become essential for privacy and compliance, programmable wallet permissions can become the norm for agent-based security.

The future of defi

While some may argue that AI cannot be trusted in financial autonomy, traditional markets have already adopted algorithmic trading and black box automation. defi is not immune – it is simply not ready.

If Crypto maintains its transparency and the principles of user sovereignty, it needs to build an infrastructure that suppresses AI agents. This starts with rebuilding the wallet as an interface and operating system for the autonomous multichine economy.

Defi is at the edge of the automation revolution. The question is not whether agents will participate. Whether we give them rails or not, they need to serve users, despite their users.

Opinion: Sean Li, co-founder of Magic Labs.

This article is for general informational purposes and is not intended to be considered legal or investment advice, and should not be done. The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or express Cointregraph’s views and opinions.