As professional traders and hedge funds know, one of the best ways to be successful is to employ risk management strategies. However, many ordinary people do not have the knowledge to do this, and this is especially important when it comes to DeFi which is full of volatility.
A valuable portfolio can lose a fortune overnight, if not managed properly.
As AI becomes smarter and more advanced, many new ways of using it are coming to the forefront, and crypto is no exception.
Imagine having an assistant who is available 24 hours a day to ensure that your risk levels are managed. Sounds great right? That’s the kind of benefits that are possible for everyday traders, using AI and risk management.
This AI assistant can watch over your portfolio day and night, analyzing patterns, identifying risks and rebalancing when necessary.
Who Is Using AI To Assist With Safety In DeFi?
Take DeFi blue chips Aave and Compound for example. By continuously scanning the market and historical data, Aave’s AI can make real-time adjustments that protect lenders from potential losses.Â
Similarly, Compound’s machine-learning algorithms analyze yield farming opportunities, advising users on strategies that align with current market trends.
Instead of relying solely on intuition or manual research, users benefit from advanced algorithms that can quickly adapt to market changes, reducing exposure to high-risk assets.
Elluminex, a new DeFi hub in the making, built on the TON blockchain, plans to use AI to help people manage risk in their portfolios.
AI-powered portfolio trackers offer real-time data, performance analysis, and market insights. Users can monitor their investments, track performance, and make informed decisions based on data.
This means that Elluminex users can get automated insights tailored to market conditions, helping them manage risk. It will help users to avoid common pitfalls, and even optimize trades based on predictive analytics.
For instance, if AI detects a sudden liquidity shift in a popular trading pair, it could adjust trading parameters in real time, offering users a better experience even during volatile periods.
Final Thoughts About AI And Crypto Portfolio Risk Management
Cryptocurrencies, even more so than traditional financial markets, move extremely quickly and experience a high level of volatility. If used correctly, this can lead to large profits. Keeping up with everything manually takes more time and effort than any one person can spare. So using AI means that risk management is going to be much easier as time goes on.
This will all help give investors increased confidence in participating in DeFi, while also maximizing their returns, and saving time and effort.
For more information about Elluminex visit the links below:
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