AI Native On-Chain Communication
For AI-driven automation to work in DeFi, execution must happen entirely on-chain, ensuring security, transparency, and reliability. However, most AI systems today lack direct integration with blockchain infrastructure, forcing off-chain computation with delayed execution.
This results in:
High latency – AI must rely on external transaction relayers, slowing execution.
Limited security – Off-chain bots are vulnerable to MEV attacks, frontrunning, and oracle exploits.
Execution risks – AI systems must manually sign transactions, exposing private key vulnerabilities.
Faktora’s Solution: AI as a Native On-Chain Executor
Faktora integrates AI execution logic directly into blockchain infrastructure, ensuring that:
AI agents execute transactions natively on Ethereum and Layer 2s.
Smart contracts verify execution correctness before transactions settle.
On-chain security mechanisms prevent unauthorized AI actions.
By embedding AI-driven execution within the blockchain itself, Faktora ensures trustless, real-time DeFi interactions.
How Faktora Executes AI-Powered On-Chain Transactions
Faktora’s execution model consists of three key components:
AI Agents Generate Execution Strategies
AI detects optimal trading opportunities, arbitrage gaps, or liquidity shifts.
AI selects the most efficient route for execution across DEXs, lending platforms, and staking pools.
On-Chain Transaction Signing & Execution
AI constructs raw transactions, signs them with a pre-approved execution wallet, and submits them on-chain.
Transactions settle instantly, reducing latency compared to off-chain execution models.
Smart Contracts Ensure Security & Compliance
Faktora’s execution contracts validate transactions before committing them.
AI agents must follow predefined execution policies, preventing unauthorized trades.
Mathematical Model for AI-Based Transaction Execution
The AI execution model follows a reinforcement learning framework, ensuring that agents continuously improve their on-chain transaction logic:
Where:
is the execution decision vector at time 
represents the reward function (evaluating slippage, gas efficiency, execution success).
is the learning rate, ensuring that AI adapts over time.
This ensures that Faktora’s AI constantly improves execution logic, minimizing slippage and optimizing transaction speed.
AI-Optimized Gas Efficiency: Reducing Ethereum Transaction Costs
Ethereum’s gas fees are a major bottleneck for DeFi execution. Faktora solves this by dynamically optimizing transaction batching.
Gas Optimization Techniques in Faktora
Transaction Batching
AI combines multiple trades into a single on-chain transaction.
Reduces gas fees by 30-50%.
MEV Protection
AI detects MEV threats and adjusts execution routes.
Prevents frontrunning and sandwich attacks.
Layer 2 Execution
AI prioritizes Layer 2 rollups for gas-efficient transactions.
Cuts execution costs by 90% vs. mainnet.
By optimizing gas usage, Faktora ensures that AI-driven DeFi strategies remain cost-effective.
Faktora transforms DeFi execution by embedding AI directly into blockchain infrastructure, ensuring:
Autonomous on-chain trade execution without user input.
Real-time gas optimization, reducing transaction costs.
Security-first execution logic, preventing malicious AI actions.
With Faktora, AI is no longer just an assistant—it’s a full DeFi market participant, capable of executing trades, moving liquidity, and optimizing strategies entirely on-chain.
Last updated