Exclusive Interview with Crypto Asset Management Platform Fyde: How to Leverage AI to Build On-Chain Vaults for Higher Yields, Lower Risk, and Optimized Liquidity?
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Exclusive Interview with Crypto Asset Management Platform Fyde: How to Leverage AI to Build On-Chain Vaults for Higher Yields, Lower Risk, and Optimized Liquidity?
AI and machine learning are well-suited for monitoring, so it makes sense to use them for preventive threat monitoring or network analysis.
Navigating Web3 tides with focused insightsInterview: 1912212.eth, Foresight News
After experiencing a series of blow-ups in the previous cycle, some users have realized that many so-called asset management firms or protocols did not truly prioritize the security of user funds. Some misappropriated funds for unauthorized lending, others suffered devastating losses from hacker attacks—users' entrusted assets vanished overnight, resulting in severe financial damage.
Truly reliable Web3 asset management platforms with unique advantages are rare. Safeguarding user funds and maximizing returns remains the central theme. Recently, crypto asset management platform Fyde sat down with Foresight News to discuss their views on industry trends, AI, and more.
Currently, most so-called AI-powered solutions are merely marketing gimmicks. However, Fyde extensively uses AI for risk management and liquidity optimization, helping users earn better yields and compound faster. Additionally, backed by a strong team, Fyde plans to focus on consumer narrative tokens, restaking, and other emerging areas. Below is the full interview transcript.
From Crypto Hedge Fund to AI-Driven Asset Management
Foresight News: Some readers may not be familiar with what Fyde does. Could you briefly introduce your project?
Crypto users, including myself, often struggle to track where their tokens are held across different portfolios. They can't easily monitor which tokens are performing well or poorly, and frequently miss timely exits on profitable positions or fail to cut losing ones. Often, users don’t even have time to react—or claim airdrops. Their biggest question becomes: “Which rising category or narrative should I buy into or exit first?”
Fyde’s liquidity vaults solve this problem. We are an on-chain, AI-driven portfolio rebalancing and liquidity optimization solution. Users deposit one of several supported token types, and our liquidity vault automatically allocates it across various tokens and narratives visible on our dApp.
By diversifying holdings across multiple assets, users increase their chances of capturing major token rallies. Profits are locked in, while losses are minimized. AI and machine learning identify risks before they materialize, protecting users’ funds from volatility, isolated price swings, or extreme market behavior. The vault continuously monitors and manages all risks—so users don’t have to. Our goal is to help users consistently lock in gains, earn yield, and maintain liquidity—enabling faster accumulation of crypto holdings with reduced volatility.
Foresight News: I understand Fyde has an impressive team, including former members from NASA, JPMorgan, Wintermute, and Synthetix. Why did you choose to enter the asset management space? Any stories to share?
Interestingly, we originally planned to launch as a cryptocurrency hedge fund. We started with four founding members, all with experience at large asset management and private equity firms, along with deep quantitative research backgrounds. That made sense initially—but during development, we noticed that many interested users were actually DAOs, protocols, and native crypto participants.
Their positions were highly concentrated, or they simply held large amounts of assets on-chain and wanted diversified exposure and exposure to rising crypto narratives—but needed someone to manage it for them. We realized that if these users were willing to move their assets off-chain into illiquid hedge funds, it clearly indicated a lack of good on-chain alternatives.
At the same time, we launched the LBS Blockchain Association and LBS DAO, and began searching for ways to manage our own assets. It was difficult to find anything that truly met our needs, so we decided to abandon the hedge fund idea and instead build a robust on-chain portfolio and liquidity management solution—one that could lock in profits and use AI for risk management.
The Spark of AI Meets Crypto
Foresight News: AI is extremely hot right now, reshaping every industry. How do you view the convergence of AI and crypto?
We believe there are still very few real-world applications of AI in crypto today. Some genuinely interesting use cases focus on risk reduction—which is exactly how we use it. But many AI products don’t add much value, or they claim to be AI when they’re really just basic data analysis.
AI and machine learning excel at monitoring, making them ideal for preventive threat detection and network analysis—areas where we see the strongest potential today.
Foresight News: Specifically, how does AI contribute to Fyde’s asset allocation, risk control, and market forecasting?
We use AI in two main areas: risk management and liquidity optimization. For risk management, we run machine learning models over our network analysis. Machine learning excels at identifying patterns humans can’t detect, allowing us to analyze relationships between on-chain transactions and token prices to quantify risk. For example, rapid wallet consolidation or large volumes of wash trading between wallets are red flags indicating potential issues—we become more cautious accordingly.
As another example, we integrate Hypernative, which uses machine learning for proactive threat monitoring. They scan on-chain transactions to preemptively detect risks such as liquidity pool vulnerabilities, governance attacks, or hacks. We run their system on tokens within our vaults and isolate any flagged assets—adding an extra layer of risk prevention and security.
We incorporate these tools into our vaults as safeguards against rug pulls, hacks, and similar threats—providing a level of protection that most users cannot access independently.
Finally, we're researching AI to optimize liquidity. We create advanced simulation environments to test and refine our token’s liquidity under various market conditions—enabling us to maximize DEX liquidity per dollar and make real-time dynamic adjustments using machine learning outputs.
Foresight News: How is Fyde's AI model trained and optimized?
We use AI in several ways. In network analysis, we employ a subset called graph machine learning. Here, we build a network graph incorporating numerous on-chain parameters. These parameters help predict information about wallets (e.g., whether tied to market makers) and transaction flows (e.g., predicting traffic into Uniswap V3), enabling us to identify centralized risks, wash trading patterns, and more.
To ensure our tokens achieve super liquidity, we run agent-based simulation modeling to determine optimal DEX liquidity structures. These agents mimic DeFi participants’ trading behaviors, modeling optimal arbitrage sizes, trader strategies, and more.
We feed all these inputs into our simulation engine, which uses methods like Monte Carlo analysis—not only to uncover network patterns invisible to the human eye but also to determine the best approaches for providing on-chain liquidity.
What Sets Fyde Apart?
Foresight News: What are the unique aspects of Web3 asset management compared to traditional asset management?
Web3 asset management offers far more flexibility than traditional finance. Of course, you still have classic strategies like buy-and-hold, yield farming, delta-neutral trading, etc.—but volatility is significantly higher.
While there is overlap, there’s also vast room for innovation—particularly around automated rebalancing and trade execution. In traditional asset management, dedicated traders execute trades. At a bank managing portfolios, there might be 50 such people whose job is to secure optimal pricing—each earning an average of $200,000 annually, totaling $10 million in costs. Instead, we incentivize the ecosystem to perform these tasks for us.
Now, everyone in crypto is a potential execution trader—not just 50 individuals. By offering common market incentives, we drastically reduce costs—from $10 million down to a fraction. This democratization of financial tasks is one of the coolest things about Web3.
Foresight News: In the competitive Web3 asset management landscape, what are Fyde’s key competitive advantages?
When people think of DeFi, they usually focus on yield generation. Unfortunately, if your underlying assets drop 95% in a bear market, a 20% yield means nothing. Our protocol aims to help crypto users consistently lock in gains while protecting against rugs, hacks, and other risks—ensuring their portfolios grow steadily over time, with minimized downside. This enables faster compounding and intergenerational wealth building.
We use AI and machine learning to better manage user risk, shielding them from rug pulls and severe negative price movements. We also implement a whitelist mechanism ensuring only pre-vetted assets enter our vaults—designed specifically to filter out scams and pump-and-dump schemes.
Additionally, users can access our platform with any whitelisted token. Most projects today only accept ETH, wBTC, or stablecoins. With us, users can deposit any whitelisted token—making our solution accessible to more people looking to grow and protect their crypto portfolios.
Trends and Challenges
Foresight News: What technologies or trends in Web3 asset management deserve attention?
Layer 2s and how to effectively leverage them will be crucial for the future of Web3 asset management. Running portfolios and managing risk requires frequent transactions. Unfortunately, doing this on Ethereum’s mainnet is prohibitively expensive. Much of this work, however, can be done efficiently on L2s.
For instance, we run thousands of iterations across numerous machine learning and AI models. Imagine executing this on mainnet with $20 gas fees per transaction—we simply couldn’t operate. On L2s, we pay just $0.02 per transaction, reducing our costs by 99.9%.
Foresight News: What industry challenges has Fyde faced during development, and how have you addressed them?
Our biggest challenge is regulation. Currently, regulatory clarity in crypto—especially DeFi—is extremely low. However, we believe builders shouldn’t stop innovating due to regulatory uncertainty. That said, we’ve taken all necessary steps to ensure our platform complies with existing regulations.
We’ve completed all legal formalities, obtained legal opinions, properly structured our company, and more. With these measures in place, we’re prepared to keep building while ensuring both our platform and users remain protected. As regulations evolve, we maintain active dialogue with legal counsel to stay informed and compliant.
Foresight News: Can you share Fyde’s future development roadmap?
Absolutely. We plan to do many exciting things on L2s. Our current liquidity vaults focus on risk protection, but going forward, we aim to expand into consumer narrative tokens, restaking, and other vault types users care about. We’re particularly excited about launching a MEME token vault—allowing users to invest without worrying about rugs. Using AI, we’ll try to identify the most promising MEME tokens for users to buy. We also plan to leverage MEV to enhance the yields we currently offer in our liquidity vaults.
Next year, we aim to maximize liquidity for our token, further incentivizing user adoption and enabling deeper expansion into B2B markets.
Foresight News: What advice would you give to investors or users interested in Web3 asset management?
For users, my advice is to always check who’s behind the core team before using any Web3 asset management product. Many developers have never worked at asset management firms or understand risk management at all. These aren’t people worth entrusting your money and time to—and that’s precisely why so many blow-ups happen in crypto. Choose products with solid teams and meaningful design.
For builders, I’d say: deeply understand market trends. It’s easy to get caught up in flashy tech and shiny new things, but ultimately, technology must serve a purpose.
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