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The DeFi arena has seen significant growth, however, continued volatility remains a feature as we approach the end of 2025. The ecosystem hit a record high of $237 billion in total value closed in Q3 2025, but this euphoria was short-lived. At the end of November, total TVL decreased by $55 billion, to $123 billion.
Despite these sharp fluctuations, participation in DeFi has not only proven stable, but has increased significantly. More than 14.2 million wallets have interacted in the ecosystem this year, and Ethereum continues to attract about 63% of all DeFi activity.
This high level of participation can be seen as a testimony of the potential of decentralized finance. However, according to many experts, volatility has revealed a fundamental challenge: the constant need to respond to market conditions, which makes success elusive for most users.
Users are expected to constantly monitor liquidity ranges, adjust positions, and navigate changing arbitrage opportunities. This has created a paradox where, despite claims that money grows by itself, DeFi participants are in fact burdened with time-consuming manual tasks to optimize their returns.
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An example of this view is Ron Bodkin, a former Google executive who now leads the AI Agent Protocol team Theory. Bodkin says he’s seen the weight of ordinary users grow as DeFi expands.
Bodkin said that most people came to DeFi hoping that the money would work for them.
“But somehow it has become in them that they work for their money: checking the charts in the middle of the night, adding intervals between meetings. It is a kind of work behind and stresses the users.”
According to Bodkin, the real negativity doesn’t come from users asking to do more, but from completely rethinking how they handle returns. This looks less like the days of chasing past returns and more like looking for tools that don’t rely on users being attached to their wallets.
Introducing AI in DeFi without the black box problem
Thorik’s new protocol, AlphaVault, fits into a broader shift towards more autonomous forms of DeFi governance. In the past year, more projects have begun to experiment with the intersection of decentralized finance and artificial intelligence (sometimes known as DeFAI), using agents to help automate routine decisions and keep up with fast-paced markets.
It’s the kind of experimentation that’s slowly moving from a hackathon curiosity to something that protocol teams are now discussing as part of their long-term roadmaps. Bodkin adds:
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“We have seen more interest in AI in DeFi, but the real challenge is to make sure that people can understand that agents can trust what they are doing. Transparency has to grow alongside automation, otherwise none of this will scale in the way that people hope.”
AlphaVault It is among the treasurers experimenting with the use of AI agents to manage capital directly for users. Instead of relying on simple rule-based stackers, it uses a multi-agent system designed to adapt to changing market conditions. This setup was tested under real pressure during Theoriq’s test, which processed more than 65 million proxy requests in 2.1 million wallets.
The team reports that one of the key differences between it and other smart agent protocols is the way it handles transparency and security. Previous attempts have been repeatedly criticized for hiding how decisions are made.
AlphaVault addresses this with “policy rules,” which are smart contract rules that define exactly what the agent is allowed to do, from asset types to position sizes. These limits are intended to give users a clearer idea of how the system will operate and reduce the risks seen in previous AI experiments.
At launch, AlphaVault integrates with trusted Ethereum partners. These partnerships include Lido’s STRATEGY Fund, orchestrated by Mellow Protocol, and Chorus One’s MEV Max backed by StakeWise.
These partnerships allow AlphaVault to allocate capital to established Ethereum revenue strategies that have been used in the ecosystem. The idea is to give users a way to make returns without having to constantly monitor or adjust their positions, but whether this actually works will depend on the long-term performance of the system.
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It provides liquidity as many DeFi projects do now
Through DeFi, early stake programs have become a popular way for projects to build liquidity and establish an initial base of total locked-in value (TVL), which provides new systems with room to operate under realistic conditions. AlphaVault takes a similar route.
To start the fund, Theoriq launched an incentivized introductory phase where the community can lock in ETH and earn points that convert into $THQ rewards. As this phase progresses, TVL will gradually transition from locked capital to live capital managed in AlphaVault by its self-agents.
This is a familiar model in DeFi, but in this case, capital doesn’t just sit there, but becomes fuel for a system designed to operate with minimal manual oversight, the team says.
Things get even more interesting in what we expect THQ to do in the future. Instead of just being an incentive, Theoriq plans to make a reputation token that allows users to bet behind smart agents they believe are doing well.
If an agent misbehaves or fails to meet expectations, these bets can be partially reduced. This mechanism aims to maintain high quality and encourage wise behavior.
This approach reflects a broader industry effort to bring more responsibility into automated systems. Instead of relying on marketing claims or vague performance reports, the idea is to let reputation build directly around how these agents behave over time.
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In theory, this creates a system where trust is not based on personalities or promises, but on visible performance on the chain, and where the community has a direct role in deciding which AI agents have more responsibility.
Where is DeFi headed after the era of hunting back?
Theoriq hopes to shift the industry debate away from chasing big APY returns and toward reducing the amount of work users are expected to do. It is designed on the idea that developers are looking for ways to relieve the burden of constant monitoring, rebalancing and decision-making that most people still do manually.
The goal is not to remove users from the process, but to build tools that handle the routine and time-sensitive parts of chain management that allow people not to treat DeFi as an add-on.
According to the team, there is a growing interest among users in systems that can operate more continuously in the background, responding to market conditions without needing their intervention every few hours. This type of automation is increasingly seen as the next natural step for a sector that wants to mature, expand, and bring to a wider audience.
In this broader push for more reliable and transparent chain automation, Theoriq and its AlphaVault system can find meaning. Whether AI-driven faces become standard or remain early experiments, the industry trend makes their arrival seem like no coincidence.
