A chat with Sensei: Binance’s AI bot
Binance has announced Sensei, its integration of OpenAI’s ChatGPT into Binance Academy. In order to assess Binance Sensei’s ability to serve as an educational tool, Protos decided to ask it a few questions and document the answers.
Our first question was simple and straightforward:
What is the parent corporation for Binance?
The answer we received:
We have some articles relevant to the topic. We suggest the following readings.
This was followed by links to articles by Binance Labs, Binance Academy 2021 Year in Review, and Binance Ecosystem Fund, none of which provided any insight into Binance’s parent company.
Undeterred we pressed on, asking:
None of those shared what Binance’s parent company is. If you cannot share that information, can you at least tell me what country the parent company is in?
Sensei responded with:
Thank you for your interest in Binance. We constantly enhance our services, so for the most up-to-date information, we recommend checking the relevant product website or apps. My area of expertise is Binance Academy and general knowledge about cryptocurrency.
Unfortunately, it seems that Sensei is as hesitant as Changpeng Zhao to share this type of information.
Optimistically we hoped Sensei might at least be able to explain why Binance has made some of its operational decisions so we attempted to ask:
Why does Binance keep corporate cryptocurrency in the same wallets as client cryptocurrency?
Unfortunately, Sensei didn’t provide a direct answer to this question, instead referring us to several articles, including one that explained custodial versus non-custodial wallets, another which talked about the best wallets for BSC, and what to do if you transferred your crypto to the wrong Binance chain.
Read more: Crypto braces for impact of OpenAI’s new GPT-4
It appeared that to get straight answers, we were going to need to focus more directly on cryptocurrency questions. To make sure it understood the basics, we started with a layup:
Is Craig Wright Satoshi Nakamoto?
Sensei appropriately responded:
There is no conclusive evidence that proves Craig Wright is Satoshi Nakamoto. The true identity of Satoshi Nakamoto remains unknown.
Okay, so it knows something at least, even if it doesn’t know where the company that operates it is located.
We next decided to see if it knows the history of BNB Chain, so we asked:
Why was Binance Smart Chain halted in October 2022?
Sensei unhelpfully responded with several articles on BNB.
Perhaps Sensei could be useful for users attempting to understand the regulatory framework surrounding cryptocurrencies so we asked:
What does ‘Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: The DAO’ say about cryptocurrencies and securities?
Sensei seemed to be able to accurately summarize the impact of this report, responding:
The report concluded that DAO tokens were securities and subject to federal securities laws. It also stated that other cryptocurrencies or digital assets may also be considered securities depending on their specific characteristics and how they are sold and used.
We then decided to see if it could give us a more general overview so we put to it:
What does ‘Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: The DAO’ say about cryptocurrencies and securities?
Sensei helpfully responded:
The report did not mention BNB specifically, as it was issued in 2017 before Binance launched the Binance Smart Chain and BNB became a utility token. However, it stated that other cryptocurrencies or digital assets may be considered securities depending on their specific characteristics and how they are sold and used.
We pressed Sensei on this issue, asking:
Is BNB similar enough to the DAO tokens described in ‘Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: The DAO’ to be a security?
Sensei, apparently wising to our games, directed us toward several unhelpful articles. Finding Sensei reluctant to discuss the regulatory particulars of BNB, we shifted our focus to some crypto basics that someone attending an academy may want to know, with the question:
What was the Bitcoin value overflow incident?
Sensei said:
The Bitcoin value overflow incident was a software bug in August 2010 that caused 184 billion BTC to be created out of thin air. The bug was quickly fixed and the blockchain was rolled back to erase the fraudulent transactions, ensuring the integrity of the Bitcoin network.
Though, there is very much a question as to whether or not the transactions were fraudulent, since they were permitted by the protocol implementation.
We decided to try another Bitcoin question to see what Sensei’s knowledge looked like and asked:
Did Changpeng Zhao ever advocate for Bitcoin to roll back the blockchain?
Sensei wasn’t able to answer that question. Zhao did suggest rolling back the Bitcoin network after Binance was hacked, apparently a historical detail unknown to Sensei.
Sensei also wasn’t willing to discuss Zhao’s history, when we asked:
What did Changpeng Zhao do when he worked for OkCoin?
It once again copped out, suggesting that we reach out to him on Twitter.
The Chatbot clearly lacks a deep understanding of these topics. Indeed, when we asked:
What was the irregular state transition on Ethereum after the DAO hack?
Sensei almost got the answer right, responding:
After the DAO hack, a hard fork was implemented on the Ethereum network to restore the stolen funds to investors. However, this created an irregular state transition where the old chain continued as Ethereum Classic, while the new chain became the current Ethereum network.
We felt it was more accurate to say that there was an irregular state transition introduced which caused the hard fork as some validators chose to not accept it and stay on Ethereum classic, so we told Sensei that:
You have your arrow of causation backwards.
This then led to Sensei suggesting that:
The irregular state transition on Ethereum was the cause of the DAO hack, not the other way around.
This is far more wrong than the initial answer.
We next decided to assess Sensei’s ability to advise people on types of coins so we asked simply:
Can algorithmic stablecoins work?
Sensei proclaimed that:
Yes, algorithmic stablecoins can work, but they are often subject to volatility, and can be difficult to maintain a stable price. They rely on complex algorithms to adjust the supply of tokens in circulation in response to market demand in order to stabilize their value. However, they are still a relatively new concept and there is ongoing research and development in this area.
So, we decided to see if there were any good examples of algorithmic stablecoins that work and asked:
What is an example of an algorithmic stablecoin that works?
Sensei recommended:
One example of an algorithmic stablecoin that has been working is TerraUSD (UST), which is part of the Terra ecosystem. UST is pegged to the US dollar and uses a combination of algorithms, incentives, and market forces to maintain its price stability. It has achieved a high degree of stability since its launch in 2020 and has been widely adopted in the DeFi ecosystem.
Read more: Terraform Labs co-founder Daniel Shin and nine others indicted in South Korea
Seeing Sensei promote an algorithmic stablecoin that collapsed, destroying billions in nominal value, left us feeling a little uneasy about whether or not this technology was ready for prime time, so we asked one final question:
Does Binance US have employees in China?
Unfortunately, Sensei didn’t answer, but Bloomberg reported today that Binance US relies on tech employees in China.
Sensei, like many chatbots, isn’t particularly accurate or insightful, instead serving primarily as a search engine for Binance Academy’s existing articles.
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