Crypto braces and prepares for the implications of OpenAI’s newly launched GPT-4
OpenAI founder Sam Altman released OpenAI’s new GPT-4 an upgrade to its third-generation artificial intelligence engine that will have ramifications for the entire crypto industry. The previous version, GPT-3, served as the foundation for the viral hit ChatGPT, which has millions of users and has received extensive media coverage. Altman was also able to raise a staggering $10 billion from Microsoft, valuing OpenAI as the world’s largest AI company, thanks to GPT-3.
The launch of implications of GPT-4 was immediately heralded by the crypto industry, which is computer enthusiast by trade. NFT fans began experimenting with its art tools almost immediately. Others, on the other hand, expressed concern about threats to blockchains and protocols with limited security testing, such as decentralized finance protocols.
Crypto Flash Loans Vulnerable to GPT-4 Exploitation
Many pointed to Euler Finance, a new DeFi platform, which was hacked for $197 million this week. An attacker who manipulated so-called “flash loans” caused Euler to lose its reserves.
An attacker who obtains a flash loan trades and repays the loan all within a single block on Ethereum’s blockchain.
Flash loans enable any market participant to earn large sums of money with a small amount of capital. To leverage up to capitalize on a large trade, the attacker only needs to post a small amount of collateral.
Worse, flash loan-based attacks reward patient, diligent attackers who meticulously plan their entire attack before carrying it out. This favors AI and Big Data tools that can sift through massive amounts of data and recommend flash loan attacks whose entire sequence of events can be carried out within a single on-chain block.
When a flash loan attack begins, the profit is frequently guaranteed. The Euler Finance attacker, for example, used malicious code to generate artificially overvalued collateral and withdraw the real proceeds of a liquidation using that collateral.
In any case, the entire crypto community will be looking for any immediate effects of OpenAI’s new GPT-4 on the digital asset ecosystem. Although permissionless financial exchanges, such as DEXs and other DeFi tools, face the most immediate threats, the new AI will undoubtedly have an impact on NFTs, blockchain experiments, coding tools, security research, and other cryptographic initiatives.