Wulf A. Kaal (U St. Thomas Law (Minnesota)) has posted “How can we Best Monitor AI Agents?” on SSRN. Here is the abstract:
This paper examines the critical challenge of monitoring AI agent transaction execution within decentralized digital ecosystems, highlighting the deficiencies of traditional centralized AI-driven supervision, including opacity, bias, and systemic vulnerabilities. In response, it proposes a web3 Decentralized Autonomous Organization (DAO)-centric governance model that integrates blockchain technology, federated communication platforms, smart contracts, and Weighted Directed Acyclic Graphs (WDAGs) to deliver an alternative oversight framework. The proposed system ensures unparalleled transparency and accountability through blockchain’s immutable ledger, while decentralized decision-making via community consensus mitigates bias and single points of failure. Federated platforms enhance scalability and privacy by distributing data processing, and smart contracts automate real-time compliance, bolstered by WDAGs’ adaptive governance structure. Validation pools and reputation tokens further empower stakeholders, fostering a dynamic, inclusive monitoring process. By incorporating feedback loops, this model anticipates and adapts to AI evolution, overcoming scalability, interoperability, and regulatory gaps inherent in existing frameworks. This decentralized approach not only addresses current shortcomings but also establishes a forward-looking standard for secure, compliant, and efficient AI agent management in modern infrastructures.