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A portfolio’s exposure to one asset rises above an agreed limit. An AI tool could flag the change for the investment team. An agent could go a step further and propose a rebalance, or execute one if it has permission. Each level of involvement delegates a different degree of authority to the system.
Institutions exploring AI agents alongside DeFi vaults and tokenised assets need to define which decisions an agent can make while maintaining control of their portfolios and client assets. That requires clarity on the agent’s role and the conditions governing its actions.
A closed-door roundtable at Vault Summit Singapore explored that question across investment management, risk, compliance and on-chain execution. The discussion pointed towards a practical starting point: monitoring and narrowly defined tasks, supported by enforceable limits, before broader investment discretion. The insights below are shared without identifying participants or attributing remarks, in line with the Chatham House Rule.
The roundtable in 30 seconds
- Monitoring and constrained rebalancing involve different levels of authority. Institutions can evaluate each task before extending the agent’s permissions.
- Investment and compliance assessments require context about markets, collateral and the purpose of a transaction, alongside yields and wallet histories.
- A model’s recommendation and permission to execute it are separate decisions. Investment limits need to be checked before assets move.
- Ownership, investor rights and accountability need to be established before an agent is authorised to move capital into a vault.
1. Defined tasks give institutions a practical starting point for delegation
Monitoring collateral, reviewing a protocol or identifying portfolio concentration can support an investment team’s decisions. These tasks have a defined purpose and outputs that people can review. They also create a basis for assessing whether the tool is useful before extending its authority.
In the opening example, the institution might first use the agent to identify the concentration breach and propose a response. It could later authorise rebalancing within agreed limits. Each step carries specific responsibilities. Defining them gives the institution a way to evaluate the agent’s contribution and decide how much authority to grant as its capabilities are demonstrated.
2. Yield and wallet data need context to support investment decisions
An agent needs information relevant to the action it proposes. If it suggests moving capital to another vault to reduce concentration, assessing the destination requires an understanding of its collateral, liquidity and dependencies on other protocols. Its yield needs to be considered in that context, alongside off-chain market developments. This helps the institution judge how the proposed rebalance would affect the portfolio’s overall exposure.
Compliance monitoring needs context too. A collateral deposit, vault subscription and direct transfer are different activities, even when they involve the same address. Interpreting the proposed interaction requires an understanding of its economic purpose. Screening should inform the controls applied before execution and support ongoing monitoring of completed activity.
3. Investment limits must be enforced at execution
Each proposed transaction needs separate authorisation checks. For the proposed rebalance, controls can check whether the destination is approved, the resulting exposure is within limits and the action is authorised. A policy engine applies those predefined rules independently of the model generating the recommendation.
Restricted wallet permissions can then limit what the agent is able to execute. Audit trails record its actions, while human intervention provides a way to stop or review unexpected behaviour. Together, these controls help contain the effects of model errors or a compromised agent and give the institution a defined process to oversee.
4. Delegation requires clear ownership and accountability
The institution also needs clarity on its legal rights within the proposed arrangement. Before an agent is authorised to move capital into a vault, the institution needs to understand its rights once assets enter the smart contract, how its interest is recorded and which claims it can enforce. Where a receipt token represents that interest, its legal basis needs to be established.
The roundtable considered legal structures and separately managed accounts as potential approaches requiring further assessment. Choosing an arrangement requires investment, legal, compliance and custody teams to work together. Their assessment of the structure remains essential when an agent executes the transaction.
A clearer path from assistance to delegation
The rebalancing example illustrates a broader point: identifying a portfolio issue, assessing a response and executing it are distinct responsibilities. For builders, a credible service makes those boundaries clear and gives institutions evidence that the controls work. Better information and restricted permissions support delegation, while ownership and accountability need to be established before capital moves. Decisions to grant broader authority can then draw on demonstrated capability and the institution’s assessment of the investment arrangements.
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