Introduction

In 2023 there has been an influx of activity related to AI, Chat-GPT became one of the most known "Next-Word Prediction Engine" where users could interact with this AI to create essays, computer science codes, music, and a lot of things that you can ask to Chat-GPT. There are fake-voice-generated AI and also fake-video-generated AI trending lately and also AI has reached Web3. But what is AI and how it works? people don't need to answer this question to begin using these kinds of programs and this has become a new way to exploit "human trust".

On February 2023, a new product gained a lot of attention and it was called Harvest Keeper, this project declared that their smart contract was tested by Contract Wolf, and the Developer team behind this dApp was tested by KYC to prove their "Real Identity", according to Markus Peters founder of Harvest Keeper:

[Harvest Keeper’s] decentralized protocol interacts with a trading bot, using built-in artificial intelligence to analyze patterns like risk, news sources and many other factors that effect the price formation of various crypto assets. (CryptoSlate)

Trading Bots aren't something new in crypto, but this dApp appealed to the user offering a simple way to use a powered AI trading bot with simply connecting their "Metamask or Trust Wallet", deposit an amount and then start to harvest a daily profit by clicking the "Harvest" button. Investors didn't need to understand how the trading bot opperates, or the role of the AI in all of that, they only needed to interact with the Harvest Smart Contract and starting winning profits everyday.

Using my words the dApp worked like this:

Interact with the Smart Contract of Harvest Keeper in the Binance Smart Chain (BSC) Network.
Sent Binance-Peg BSC-USD token.
Harvest (Claim All Reward) of Binance-Peg BSC-USD Everyday thanks to AI.

And when the people started to receive their rewards the activity of this dApp started to increase daily until the day this dApp "was hacked" with more than 1M of Losses, but before reaching the conclusion let's answer some questions related to the "AI Used".

How does the protocol/dApp use AI technology, and what specific AI techniques or algorithms does it employ?

The Workflow Of The Bot Based On Ai

Harvest Keeper bot using algorithms analyzes the patterns, risks and factors based on past experiences to generate maximum profits 24 hours a day. Hence, each action of the bot is based only on objective data, excluding assumptions and hypotheses. The immense abilities of AI eliminates the possible human errors guaranteeing a reliable passive investment aimed at increasing capital. And each Harvest Keeper user gets a fixed daily reward of 4.81% of the deposit daily! Rewards can be withdrawn at any time as well as reinvested for even bigger profits!

Bot Maximum Efficiency

Automated trading system of the Harvest Keeper bot gives a high level of efficiency, thanks to its maximum formalization. The bot algorithm is written in maximum details which in its turn reduces the likelihood of blind spots in its trade, because the absence of some conditions for entering or exiting the market can lead to incorrect decisions of the program. Harvest Keeper is maximally adapted to the current realities of the cryptocurrency market.

Development team, after writing of the algorithm, together with the leading traders have conducted all the necessary tests, simulating all kinds of market situations:

Market growth along with a bull-run trend;

Market fall along with a bear-market trend;

Crisis in the segment of selected assets;

Sharp swings;

Lingering sideways movement;

Sharp market crashes;

Active influence of whales on the market and others.

This extract is from GlobeNewsWire because their whitepaper, twitter, medium dissapeared from the Web2 (Error 404). But after reading we can understand that their AI is "pretty competent".

What benefits does the integration of AI bring to the protocol/dApp, and how does it enhance its functionality or user experience?

The main benefits was the opportunity to use this "AI Trading Bot" through their dApp and earn these kinds of rewards (by GlobeNewsWire):

Thanks to HK's AI abilities market risk is reduced, which increases trading opportunities in difficult market situations and this in turn allows to allocate assets more wisely.

As the result of the trading bot work all the investors get daily rewards of 4.81%! And in 21 days the income becomes 101% of the investment!

Are there any potential risks or limitations of using AI in the context of the protocol/dApp, if yes, how can they be addressed?

Because the investors needed to interact with the smart contract using their "Trusted Wallets" it had room for exploits, and this was the case.In the audit made by ContractWolf they specified that "Owner can take tokens/USDT from Contract" and this happened when the function "getAmount" was called to sent all the volume that Harvest Keeper had to a single Wallet. Besides from that this smart contract used Ice Pishing to affect these wallets not only in the BSC network, but also the Ethereum, Polygon, Avalanche, Arbitrum and the BSC Test-Net.

Ice phishing is a type of web3 attack that deceives users into manually granting permissions by signing and approving requests.

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