PancakeSwap, a decentralized exchange (DEX) operating across multiple blockchains, has entered into a partnership with the Allora Network to unveil a prediction market driven by artificial intelligence (AI) on Arbitrum.
The innovative prediction market will leverage AI-generated price data provided by Allora. By tapping into Allora’s machine learning capabilities, users of PancakeSwap will be able to make forecasts on the price fluctuations of Ether (ETH) specifically on the Arbitrum network.
In a conversation with Cointelegraph, Chef Gyoza, the product manager at PancakeSwap, elucidated on the rationale behind the collaboration with Allora. He mentioned the significance of ensuring greater capital efficiency in the adoption of decentralized exchanges like PancakeSwap.
Functionality-wise, Allora’s AI-powered models will offer predictions on the probability of various cryptocurrency prices either rising or falling. This information can guide users in making informed trading decisions. The payout mechanism is determined by the accuracy of the AI predictions, which evolve over time based on the performance of the AI as users engage with the prediction market.
Gyoza encapsulated the essence of the new prediction market, underscoring its potential to enhance liquidity and impact volatility on the PancakeSwap platform. Additionally, he addressed concerns regarding market manipulation and exploitation, noting that the AI predictions only surface once the rounds are locked, thereby deterring any potential manipulation attempts as users are not required to reveal their directional biases.
Looking ahead, PancakeSwap is venturing into the realm of AI innovation with the forthcoming launch of CupcakeHop, an AI-driven portfolio management tool developed in collaboration with Bril Finance. Scheduled for release in August, this tool aims to provide tailored investment strategies and real-time risk management solutions to a broader user base.
In parallel, the gaming industry is witnessing a shift towards Web3 technologies, with the creator of Farmville highlighting the significance of beta releases over crypto game rewards in the evolving landscape of crypto gaming.