The famous decentralized exchange PancakeSwap has just launched an AI-based prediction market on the Arbitrum blockchain.
The new stock exchange allows users to bet on the very short-term price trends.
It is therefore possible to bet on an imminent bull or bear, following or going against the strategy proposed by artificial intelligence.
Thanks to the launch of this new market on Arbitrum, which as a chain is growing a lot, PancakeSwap reduces the competition with the competitor Poly Market.
Let’s see all the details below.
Summary
PancakeSwap and the new prediction market on Arbitrum powered by AI
PancakeSwap, a well-known multichain decentralized exchange platform, has just launched a prediction market on the blockchain of Arbitrum integrated with AI technology.
This type of exchange, which as mentioned allows betting on the trend of crypto market prices, will be powered by data from Allora Labs.
This company leverages AI machine learning by offering clients of the DEX a price prediction strategy for ETH every 10 minutes.
It is therefore possible to bet following the strategy offered by artificial intelligence, or bet against it: if the position is in “UP” you win if the price of ether is higher than at the start of the bet, if instead the position is in “DOWN”, you win if the price is lower.
The prize varies greatly based on the volatility of prices and high multipliers can also be reached, while at the same time it is possible to lose the entire amount in case of a negative outcome.
At the moment Ether is the only tradable currency on this section of Arbitrum, while on other networks bets in BNB and CAKE are also available.
Until recently, this type of prediction market on Pancakeswap was only available on the BNB chain and ZKsync Era blockchains.
The platform will most likely aim to increasingly expand its multichain presence in this type of marketplaces.
In a recent interview, the product manager of PancakeSwap “chef Gyoza”, explained why the DEX decided to collaborate with the team of Allora:
“In the last three years, the models built by the Allora Labs team (formerly known as Upshot) have effectively produced price forecasts for over 400 million assets with 95 – 99% confidence for the most accurate forecasts.”
We remind you that while Allora Labs deals with AI betting strategies, the oracle that provides the asset price feed is always Chainlink.
The competition with Polymarket is growing: a prize pool of 60,000 ARB is up for grabs
The aggressive entry of PancakeSwap into this delicate sector with the landing on the Arbitrum chain puts pressure on the main predictive market Polymarket.
This latest one turns out to be the dominant platform in this niche to date, offering betting options on a wide range of events from the real world.
These include for example the outcome of the USA presidential elections, political debates, football events, geopolitical events, breaking news, debate bingo and much more.
In any case, you can only bet on “YES” or on “NO”, with odds that vary from time to time based on the probabilities of the event.
Polymarket, operating on the Polygon network, has grown significantly from 2023 onwards, increasing from a TVL of 4 million dollars to the current sum of 36.6 million dollars.
PancakeSwap, although it offers a much more immature prediction tool based solely and exclusively on the trend of cryptocurrency prices, could still threaten the current market share of Polymarket.
In fact, thanks to the AI feature, users will have a substantial advantage by being able to follow strategies with a higher probability of winning. Alternatively, they can go against the software’s choices but with significantly higher odds.
Gyoza summarized the new prediction market, saying:
“PancakeSwap users will be able to follow or oppose the AI’s prediction. With the AI’s performance and record in our tests reaching an accuracy close to 65%, users will have to choose when to oppose the AI, which will naturally have higher odds.”
Additionally, the participants of this market have the opportunity to win a portion of the prize pool of 60,000 ARB in each 10-minute round.
This type of incentive attracts even more users from other predictive markets, creating a fertile ground for the growth of PanceSwap and putting a spoke in the wheels of other competitors.
PancakeSwap increasingly focused on AI
The choice of PancakeSwap to rely on AI in the prediction markets reflects the development of a technology that provides very accurate and timely information.
This type of integration is such as to offer DEX users a betting experience decidedly superior to that of other platforms.
It is not, in any case, the first time that PanckeSwap dives into the world of artificial intelligence.
Recently, in fact, the decentralized exchange announced the launch of CupcakeHop, an intelligent portfolio management tool developed by Bril Finance.
This new invention, which will be ready for use in August, is designed to offer personalized investment strategies, based on certain factors.
Simply in this sense, the exposure to risk and the pursuit of certain financial objectives will be sufficient to set a precise strategy.
Furthermore, as stated by its developers, CupcakeHop would have the ability to redefine yield optimization and cross-chain liquidity.
This type of instruments are in line with the market trends of cryptocurrency and reflect the needs of the search for liquidity for cross-chain DEX.
The use of AI is also becoming increasingly widespread in many areas of daily life, both within and outside the blockchain landscape.
It is clear that PanceSwap’s choice to increasingly rely on artificial intelligence is aimed at being ready for structural market changes and keeping up with innovations.
We will see if thanks to these new integrations the platform will be able to bring new active users and attract new liquidity, increasing its market share.
The challenge and competition in the crypto market is becoming increasingly tough also and especially “because of” AI.
