As artificial intelligence begins to play a more active role in decentralized finance (DeFi), experts warn that wallet infrastructure is falling behind — potentially opening the door to new forms of financial exploitation.
AI agents are rapidly being integrated into DeFi protocols to manage tasks like liquidity provisioning, yield optimization, and real-time trading across blockchains. But according to Sean Li, co-founder of wallet infrastructure firm Magic Labs, the sector’s reliance on outdated wallet architecture could undermine this progress.
“Most DeFi platforms still depend on externally owned accounts (EOAs) that require manual approvals,” Li noted in a recent opinion piece. “That’s unsustainable in an environment increasingly dominated by automated agents.”
The emergence of AI-powered DeFi bots has already revealed critical vulnerabilities. In September 2024, users of the Telegram-based bot Banana Gun lost nearly $1.9 million after a compromised oracle enabled unauthorized access. Similarly, another exploit in early 2025 saw $100,000 worth of Ether drained from trading dashboards linked to Aixbt.
The common denominator? Wallets unable to validate automation or enforce user-defined restrictions.
“Wallets weren’t designed to understand ‘intent’ or apply programmable permissions,” said Li. “That creates a dangerous all-or-nothing situation for users delegating control to bots.”
Without clear security guardrails, even hardware wallets offer no added protection. Attackers can exploit offchain signed messages to trigger onchain transactions without alerting users — a tactic increasingly used in phishing attacks targeting AI agent tools.
To mitigate these risks, Li and others advocate for programmable wallet infrastructure. That includes session-based permissions, real-time access revocation, and cryptographic verification of agent behavior. Some in the industry are also pushing for universal keystore protocols that synchronize permissions across multiple chains, enabling secure and interoperable agent ecosystems.
“Automation is inevitable — but without safeguards, it’s a liability,” Li warned. “If we want DeFi to scale responsibly, we need wallets that can keep up with the intelligence we’re embedding into the system.”
As institutional adoption grows, experts say that verifiable control mechanisms — similar to what zero-knowledge proofs have brought to privacy and compliance — will become a standard requirement.
For now, the message is clear: DeFi is racing toward an autonomous future. But without secure wallet infrastructure, the risks may outweigh the rewards.
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