PancakeSwap, a decentralized exchange (DEX) that operates across multiple chains, has joined forces with Allora Network to introduce a prediction market powered by artificial intelligence (AI) on Arbitrum.
The newly launched prediction market will utilize AI-driven price feed data sourced from Allora. By harnessing Allora’s machine-learning capabilities, users of PancakeSwap will be able to make predictions about the price movements of Ether (ETH) on Arbitrum.
Chef Gyoza, the product manager at PancakeSwap, explained in an interview with Cointelegraph the rationale behind the collaboration with Allora.
The functioning of the prediction market is as follows: Allora’s AI price prediction models will forecast the likelihood of various crypto assets experiencing price increases or decreases. Users can utilize this information to inform their trading decisions. The payout process will be determined by the accuracy of the AI’s predictions, which will be adjusted over time based on the AI’s performance as users participate in the prediction market.
Gyoza summarized the new prediction market by stating that it provides users with AI-driven price predictions that can assist them in making trading choices.
Gyoza also addressed concerns about market manipulation and user exploitation of the prediction market feature. According to Gyoza, the AI predictions are only released after rounds are locked, which prevents manipulation since users do not express directional positions.
As a new addition to the market, Gyoza shared PancakeSwap’s perspective on the potential impact of the prediction market on liquidity and volatility on the platform.
In other news, PancakeSwap has announced its upcoming launch of CupcakeHop, a portfolio management tool powered by AI developed by Bril Finance. This tool, set to be unveiled in August, aims to provide tailored investment strategies and real-time risk management to a broader audience.
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