Biconomy’s Delegated Authorization Network (DAN) will serve as an authorization layer for autonomous on-chain transactions.

Web3 infrastructure firm Biconomy is integrating artificial intelligence (AI) agents into its platform to facilitate on-chain transactions on behalf of users. This innovation leverages the Delegated Authorization Network (DAN), a new authorization layer enabling the delegation of trading activities to AI agents.

Delegated Authorization Network (DAN)

The DAN allows users to delegate certain transactional tasks and authorizations to AI agents, who can then autonomously manage trading accounts and execute transactions under predefined instructions. Biconomy co-founder Aniket Jindal described the functionality:

“Essentially, DAN allows users to delegate certain transactional tasks and authorizations to AI agents, granting them the ability to act on the user’s behalf within predefined parameters.”

Users can specify permissions through a decentralized application (DApp) by providing personalized input regarding allocations and trading strategies. This could be as simple as instructing, “please use my $1,000 for this strategy,” or as detailed as adjusting settings through a dashboard.

AI Agents vs. AI-Powered Trading Bots

AI agents differ from AI-powered trading bots in terms of complexity and adaptability. While AI trading bots automate the buying and selling of assets, AI agents can handle more sophisticated tasks, such as optimizing asset allocation and managing portfolios based on pre-set criteria or learned experiences.

Security and Privacy

To ensure the privacy and security of delegated transactions, DAN uses a sharding mechanism to grant key privacy. Each user's delegated authorization key is fragmented into multiple shards and distributed across a decentralized network of nodes, preventing any single node from accessing the complete key. Additionally, DAN leverages EigenLayer for Ethereum's economic security, where validators restake their Ethereum holdings and face slashing penalties if malicious activity is detected.

Market Growth and Future Potential

The market for AI agents, particularly in the finance sector, is projected to grow significantly. By 2030, the global market for autonomous AI and agents is expected to reach approximately $70.53 billion, with a compound annual growth rate (CAGR) of 42.8% from 2023 to 2030, according to a report from Grand View Research. Financial institutions are increasingly utilizing AI agents to automate trading, manage risk, and detect fraud, among other applications.

Biconomy's integration of AI agents represents a significant advancement in Web3 infrastructure, aiming to enhance user experience by automating complex transactions while maintaining security and self-custody.