The Future of Risk Mitigation in DeFi: An Overview of Bird’s Upcoming Products

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OCADA AI (Formerly Bird.Money)

5 min readMay 29, 2023

A World of Cryptocurrency and Associated Risks

In the last decade, the world has seen a significant transformation due to the rise of digital currencies, particularly cryptocurrencies like Bitcoin and Ethereum. With these changes, however, come a new set of risks. The anonymous and decentralized nature of these transactions, while offering numerous advantages, has become a breeding ground for illegal activities such as fraud, theft, and money laundering. This has created a pressing need for innovative solutions in user-centric risk mitigation, a niche in which Bird is emerging as a leading figure. With its advanced uses of AI and machine learning, Bird is shifting the paradigm by offering user-centric, decentralized security and analytics that empower individuals and businesses in the DeFi sector.

Bird’s Contribution to DeFi Security So Far

Having been a pioneer in blockchain and web3 wallet analytics, Bird has been continuously developing its Blockchain Integrated Risk Detection (Bird) technology, in the fight to help protect users against crypto-related on-chain fraud. By leveraging AI and machine learning, Bird’s technology analyzes an array of on-and off-chain indicators to detect and deter suspicious activities. Its Nest App, which is under review by the Google Play Store and the Apple App Store, respectively is geared at providing users with actionable insights and fostering a safer environment for transactions. While the Nest API intends to aid decentralized on-chain projects and businesses with the same defense mechanisms. But Bird is not stopping there.

Unveiling Bird’s Future Products

Currently, Bird is working on augmenting its portfolio with two additional advanced solutions. Both products in development are also aimed at boosting DeFi security and furthering both retail user and on-chain business adoption: the AI-Driven Synthetic Blockchain Investigator (ASBI) and Zero Knowledge Escrow Smart Contracts (ZKESC).

AI-Driven Blockchain Investigations

The AI Synthetic Blockchain Investigator (ASBI) represents a leap forward in fraud detection and prevention automation. This next-generation solution uses sophisticated algorithms and federated learning to scan blockchain transactions continuously while feeding them through an artificial intelligence processor. Its ability to swiftly identify anomalous patterns in transactions and assess the risks associated with particular wallet addresses marks a significant advancement in web3 transactional risk mitigation. By quickly isolating potentially fraudulent activities, ASBI provides users and businesses with an extra layer of security, reducing their exposure to threats and potential financial losses.

The Role of Zero Knowledge Escrow Smart Contracts in DeFi

The Zero Knowledge Escrow Smart Contracts (ZKESC) on the other hand, offer a unique and powerful solution to on-chain transactional security. Traditional escrow models have long been used to ensure all parties fulfill their obligations in a transaction by having an accountable custodian, typically a lawyer or some other licensed and accountable professional agent, hold funds for a transactional exchange of property in lieu of ensuring that the obligations and requirements by both parties have been fulfilled prior to releasing funds. By bringing this model into the world of DeFi, utilizing the power of smart contracts, zero-knowledge proofs, and SNARKs (Succinct Non-Interactive Argument of Knowledge), Bird has found a way to increase transactional reliability and security without the need for a third-party intermediary. ZKESC employs cutting-edge cryptographic techniques to enable secure transactions between parties, safeguarding against malicious activity and enhancing trust in the DeFi space.

Impactful Innovations for DeFi

The integration of these two highly innovative solutions into the broader DeFi ecosystems that currently exist will undoubtedly be a game-changer. Not only do they reflect Bird’s impressive technical capabilities, but they also underscore the company’s unwavering commitment to user-centricity, security, and anonymity. By introducing advanced tools that anticipate and mitigate risk, such as the AI Synthetic Blockchain Investigator, Bird is taking an important step toward creating a safer, more reliable DeFi environment. Moreover, efforts are being made to make operating decentralized on-chain businesses a more viable option moving forward. Products like the ZK-Escrow Smart Contracts allow for web3 businesses to maintain their on-chain accounts concealed, likewise for users by and large. At the moment this isn’t possible since all on-chain transactions are not only visible but so too are the accounts of both the recipient and sending addresses. This isn’t viable (or safe) for a business to operate in this way. Having this level of exposure leaves businesses (and users) at risk.

The Commitment to a Safer Crypto Environment

Bird’s approach to DeFi security goes beyond merely innovating; it’s about building a culture of safety and trust. While focusing on user-centric security and anonymity, along with decentralized on-chain web3 business products, a clear and intentional path is being taken. A firm statement of dedication to the decentralized ethos that is etched in the original Bitcoin whitepaper penned by Satoshi Nakamoto. By placing a strong emphasis on AI and machine learning (ML) for users and on-chain purists, Bird is capable of addressing the dynamic and evolving nature of risks in decentralized finance. The continuous learning and adaptation facilitated by these technologies make Bird a formidable opponent not only in the fight against cybercrime in DeFi, but also to the impending onslaught of regulations being put forward by centralized scrutinizers that are aiming to utilize blockchain technology for their own nefarious purposes of maintaining control over populations of people, their property and their finances.

As Bird continues to expand its innovative solutions, the future of risk mitigation in DeFi seems more promising. So too does the ever-increasingly important future of decentralization and self-custody for users and on-chain businesses. The developments of the AI Synthetic Blockchain Investigator (ASBI) and ZK Escrow Smart Contracts (ZKESC) represent a seismic shift toward a more secure DeFi sector, free from the eyes of centralized system power holders, instilling greater confidence among users and businesses. As the world continues to move further towards the appeal of decentralized finance, Bird’s trailblazing efforts offer a glimpse into the promising potential that AI and blockchain technology hold for a safer, more secure future. The dawn of a new era in DeFi risk mitigation is upon us, and Bird is leading the flight.