Ken Timsit, Head of Cronos Chain & Cronos Labs, Discusses the Intersection of Web3 and AI

With over two decades of experience in fintech, Ken Timsit has an impressive track record of driving digital transformation programs at leading banks and capital markets firms. He began his career at The Boston Consulting Group and has served as a Partner and Managing Director in Paris, New York, and Singapore.

Prior to joining Cronos in 2021, Timsit was the Chief Revenue Officer at ConsenSys, a leading Ethereum tech company that is responsible for the creation of MetaMask and Infura. During his five-year tenure at ConsenSys, Timsit played a key role in driving the company’s growth and expanding its global footprint.

In his current role as the head of Cronos Labs, Timsit leads the R&D and ecosystem development arm of the Ethereum-compatible layer-1 blockchain network, Cronos. Given his decades of experience in fintech, Timsit’s current role is a natural extension of his professional journey. As he sees it, the crypto ecosystem is fundamentally about building the financial rails of tomorrow. 

In addition to his blockchain expertise, Timsit is also knowledgeable about the intersection of blockchain and AI. Recognizing the potential for these two technologies to work in tandem, he shares his insights on the potential applications of these technologies.

What piqued your interest in the web3 space, and where did you first hear about it?

I first learned about blockchain technology when I was a consultant to financial institutions in Southeast Asia, working on mobile consumer remittances, digital distribution of financial products, wholesale payments, and cross-border capital markets. In all these areas, blockchain technology was being investigated as a way to unlock efficiencies.

I was also traveling a lot for business during that time, carrying a dozen currencies in my wallet and experiencing the pain of bank account opening and termination every time I relocated. The promise of crypto, and its digitally native and global financial rails, was all the more appealing to me.

Can you discuss your understanding of the intersection between AI and blockchain and how it can be applied in the areas of DeFi, GameFi, and SocialFi?

In DeFi, AI can help users to describe investment strategies or issue trading instructions using natural language. AI can also help to avoid crypto scams by running fraud detection algorithms. Finally, it is possible that AI could generate and back-test trading strategies, but it does not look like we are there yet, even in traditional equity markets.

Conversely, DeFi can help AI to do business, for example, by enabling bots and IoT devices to transact with each other as compensation for services rendered, invest their treasury and/or insure their users against mistakes. For example, it would be interesting to see ecosystems where AI-based bots are required to stake assets so that, if they make mistakes that result in losses for human users, the staked pool can be used as an insurance fund to compensate users.

In GameFi, we are going to see lots of AI-generated content and NFTs triggered either by user prompts or gameplay events. We can also expect AI to help generate more entertaining non-player characters than what is usually the case, even in casual games.

In SocialFi, we will see identity frameworks and tools that help users to identify fellow humans in hybrid human/AI ecosystems. Web3 can also help to define and implement strict governance rules for AI and the underlying data.

The big picture is that, in a global hybrid world of humans and robots, it will be very challenging to rely on trust and morality to do business with each other. The tools of crypto are well suited for the creation of a trustless economy, where we can at least rely on immutable code to tell us what to expect from other parties.

What are some of the successful examples of real-world use cases at the intersection of AI and web3 you’ve seen?

The journey has just begun, but there are already quite a few real-world use cases. Firstly, AI and machine learning are used successfully in identity verification and fraud detection by major crypto exchanges.

Secondly, AI is already used by software developers to increase productivity by suggesting code auto-completion (Github, Tabnine), scanning code for bugs, and generating test scripts. These tools are going to enhance the ability of very small teams to create massively scalable product innovation, which was already impressive before AI when you look at what teams like Uniswap, OpenSea, and Cronos have achieved.

Thirdly, there are several examples of web3 products using generative AI to enable users to customize NFTs. Unstoppable Domains has a feature in beta, and several startups are launching new products on the Cronos chain in the coming weeks. However, there is also some fatigue going on as our trained eyes are improving at recognizing AI-generated images and text, leading many of us to skip them like we skip ads.

With fraud plaguing the DeFI space, how can AI be used as a fraud prevention tool?

Fraud is a broad term that encompasses many types of behaviors. There are various degrees of fraud. The crypto industry has already made huge progress when it comes to combating the most obvious ones. Given that all transactions can be monitored on public blockchains, it is now possible for many law enforcement agencies to follow the money flow and prosecute money laundering, theft, and misleading promotion.

AI can equip application creators and users with additional tools to enable them to manage all kinds of risks at their own level in real-time. This will include tools to detect scams by analyzing the published links and social media footprint of newly created projects, but also tools that allow software developers to create more robust code to avoid hacks and market manipulations.

Platforms for AI-powered avatar creators and emotes for virtual worlds have been launched lately. What impact do you see this having on the overall gaming and metaverse experience?

The confluence of AI and blockchain will enhance the overall gaming and metaverse experience by injecting greater interactivity within shared virtual spaces. By leveraging AI to create avatars and emotes, users are afforded greater customization options by way of physical movements, voice characteristics, and facial expressions.

AI-powered avatars are not going to magically solve the viability problem of some virtual worlds that do not have intrinsic entertainment value or tangible utility. But there is certainly a demand for enhanced customization features, just like there is a market for selfie editing on Facetune and bunny ear filters on Zoom.

When it comes to SocialFi, how can AI aid in building identity frameworks and tools to help users identify fellow humans in hybrid human/AI ecosystems, and what role do you see this playing in the SocialFi space?

The emergence of AI and bots will create a need for identity tools for application creators and other parties to ascertain if they are transacting with fellow humans. The solutions to this need are not straightforward, and we are likely to see an arms race between bot creators and bot detection tools, both enabled by AI, similar to what we are seeing more broadly in cybersecurity.

For example, AI makes it possible to run proofs of humanity efficiently, whereby users are asked to complete certain movements and say certain phrases in front of a webcam. However, AI also makes it possible to generate avatars and simulate human speech. It is important to keep in mind that stringent proof requirements may exclude people with certain disabilities or without access to certain documentation or equipment, so they need to be enforced with caution.