PancakeSwap

Arbitrum

DeFi

PancakeSwap, a multichain decentralized exchange (DEX), has partnered with Allora Network to launch an artificial intelligence (AI)-powered prediction market on Arbitrum.
The new prediction market will feature AI-driven price feed data sourced through Allora.
Through Allora’s machine-learning capabilities, PancakeSwap users can forecast Ether (<a href="https://cointelegraph.com/ethereum-price">ETH</a>) price movements on Arbitrum.
In an interview with Cointelegraph, Chef Gyoza, product manager at PancakeSwap, explained the decision to collaborate with Allora:
<blockquote data-ct-non-breakable="true">
 “Over the last three years, models built by the Allora Labs team (formerly known as Upshot) have effectively produced price predictions for more than 400 million assets with a 95–99% confidence for the most accurate predictions.”
</blockquote>
Related:<a href="https://cointelegraph.com/news/dex-adoption-greater-capital-efficiency-pancakeswap"> DEX adoption needs greater capital efficiency — PancakeSwap product lead</a>
<h2 data-ct-non-breakable="true" id="how-it-works">How it works</h2>
Allora’s AI price prediction models will predict the likelihood of the price of different crypto assets rising or falling, which users can use to aid their trading choices.
The payout process is guided by the AI’s accuracy, adjusting over time according to the AI’s performance as users make predictions on the prediction market.
Gyoza summarized the new prediction market, saying:
<blockquote data-ct-non-breakable="true">
 “PancakeSwap users will be able to follow or oppose the AI’s prediction. With the AI’s performance and record in our tests achieving close to 65% accuracy, users will have to choose when to oppose the AI, which will naturally have higher odds.”
</blockquote>
Related: <a href="https://cointelegraph.com/news/pancakeswap-gasless-transactions-zyfi-integration">PancakeSwap integrates Zyfi for gas-free DeFi trading</a>
<h2 data-ct-non-breakable="true" id="preventing-exploitation">Preventing exploitation</h2>
On the topic of the potential for market manipulation and users exploiting the new prediction market feature, Gyoza added:
<blockquote data-ct-non-breakable="true">
 “Users can track all round history, price feed history, and AI prediction history via a history tab on the prediction page. All results are also settled onchain via our prediction v2 contract.”
</blockquote>
Gyoza explained that the AI prediction is only issued after rounds are locked, preventing manipulation “as users do not express directional positions.”
As a new market feature, Gyoza expressed PancakeSwap’s opinion on the influence the prediction market could have on liquidity and volatility on the platform:
<blockquote data-ct-non-breakable="true">
 “At the moment, we don’t think that it’ll influence the market to a large extent, as it’s still a nascent product. However, we believe that with Allora as a partner, we can expand the predictions to many other markets, both on and offchain.”
</blockquote>
Related: <a href="https://cointelegraph.com/news/ai-powered-defi-platform-introduces-token-mints-by-placing-orders">AI-powered DeFi platform introduces token mints by placing orders</a>
<h2 data-ct-non-breakable="true" id="pancakeswap-turns-to-ai">PancakeSwap turns to AI</h2>
PancakeSwap recently announced that it is gearing up to launch <a href="https://cointelegraph.com/news/ai-portfolio-management-tool-pancakeswap">CupcakeHop, an AI-powered portfolio management tool</a> developed by Bril Finance.
This new tool, set to debut in August, is designed to offer tailored investment strategies and real-time risk management to a wider audience.&nbsp;
Magazine: <a href="https://cointelegraph.com/magazine/crypto-game-rewards-farmville-creator-beta-releases-web3-gamer/">Crypto game rewards not ‘crucial,’ Farmville creator makes case for beta releases: Web3 Gamer</a>

PancakeSwap launches AI-powered prediction market on Arbitrum

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Cointelegraph

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