PancakeSwap Partners with Allora Network to Launch AI-Backed Prediction Market on Arbitrum
Summary:
PancakeSwap, a multichain decentralized exchange, is partnering with Allora Network to introduce an AI-powered Prediction Market on Arbitrum. The new market will feature AI-driven price feed data gathered via Allora's machine-learning capabilities to forecast Ether price movements on Arbitrum. According to PancakeSwap's Product Manager, Chef Gyoza, the AI's recommendations have displayed a close to 65% accuracy rate, allowing users to make educated decisions concerning price fluctuations. Measures have also been implemented to hinder any potential market manipulation or user exploitation of this novel feature.
PancakeSwap, a DeFi exchange operating on multiple blockchains, has allied with Allora Network to initiate an AI-backed Predictive Market on Arbitrum. The upcoming predictive market will benefit from artificial intelligence-accelerated price feed data procured from PancakeSwap’s recent partner Allora. Thanks to Allora’s prowess in machine learning, PancakeSwap customers can make predictions regarding the fluctuation of Ether (ETH) price on Arbitrum (ARB).
Chef Gyoza, the Product Head at PancakeSwap, in a conversation with Cointelegraph clarified the reasoning behind this partnership with Allora. He mentioned, "Since the last three years, predictive models developed by the Allora Labs workforce (previously recognized as Upshot) have efficaciously offered price forecasts for approx. 400 million assets maintaining a 95-99% confidence level for the highly accurate predictions."
Addressing how it operates, Allora's AI price prediction models will foresee the probability of the value of diverse digital assets either spiraling up or down. Users can then agree or disagree with this prediction. The payment procedure is directed by the accuracy of the AI, altering over time in accordance with the AI’s performance as predictions are made within the Predictive Market.
To Shef Gyoza, "PancakeSwap customers will have the choice to either concur with or dispute the AI’s prediction. Considering our tests revealed an approximately 65% accuracy in the AI's predictions, users will need to determine when they want to challenge the AI, which will evidently pose greater odds."
Discussing potential threats like market manipulation and user exploitation of this new Predictive Market feature, Gyoza noted, "All users can review round history, price feed history, and AI prediction history by clicking on the history tab on the prediction page. All outcomes are also resolved on-chain via our v2 prediction contract." He further clarified that AI predictions are revealed only post the locking of rounds, which effectively prevents any manipulation as users are unable to show directional positions.
On the potential impact of the Predictive Market on PancakeSwap's liquidity and market volatility, Gyoza stated, "Given its early stage of development, we don’t believe it will significantly affect the market. However, with Allora alongside, we are excited about expanding predictions to many other markets offline and online."
Recently, PancakeSwap disclosed its plans to roll out CupcakeHop, an AI-enhanced portfolio management tool constructed by Bril Finance, which is set to launch in August. This novel tool aims to provide custom-made investment strategies and real-time risk management to a wider user base.
Published At
6/26/2024 4:00:00 PM
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