PancakeSwap, a decentralized exchange, has unveiled its AI-powered prediction market on the Arbitrum network. It is driven by the Allora Network’s artificial intelligence model.
Integrating Allora’s advanced machine learning models, PancakeSwap now offers predictive capabilities previously unseen in the platform.
How PancakeSwap Leverages Allora Labs’ AI Model
Over the last three years, Allora Labs (previously known as Upshot) has developed models that forecast prices for over 400 million assets. This expertise is now available to PancakeSwap users, combining AI-driven insights with an active trading environment.
“We’re excited to integrate Allora’s AI models into our prediction market. Now our users can test their prediction skills against AI, which will create another exciting form of prediction for our users,” Chef Gyoza, Product Manager at PancakeSwap told BeInCrypto.
In this new AI-powered prediction market, users predict the future price movements of cryptocurrencies like Ethereum (ETH). Every 10 minutes, they can forecast whether the price of ETH will rise or fall. Successful predictions allow participants to earn a share of the prize pool, enhancing engagement through AI-enhanced accuracy.
“Our collaboration with PancakeSwap is a perfect example of how AI can be used to enable novel applications in DeFi. With the convergence of AI and crypto, prediction markets are on the cusp of a significant transformation that will greatly expand their role in society,” Nick Emmons, Co-Founder of Allora Labs, told BeInCrypto.
First, AI models from Allora predict asset price movements. Users then place their bets, either supporting or opposing the AI’s predictions.
Payouts are based on the AI’s performance, with the structure adjusting over time to maintain fairness and challenge. Currently, PancakeSwap’s prediction market focuses exclusively on cryptocurrency prices.
However, platforms like Polymarket are making a stride in the prediction market. They cover a wide array of topics beyond cryptocurrencies, including culture, technology, sports, and politics.
In May, Ethereum co-founder Vitalik Buterin and PayPal co-founder Peter Thiel backed Polymarket with a $70 million investment, highlighting its significance in the prediction market. This platform allows users to engage with global events in real-time, offering a decentralized environment for predictions.
It gained popularity with the upcoming US Presidential elections. Even Donald Trump used a screenshot from Polymarket to boast about his odds of winning the election.