As the 2024 US presidential election draws near, crypto-based prediction market PolyMarket is experiencing a surge in activity. Decentralized exchange PancakeSwap on Wednesday announced that it is launching a prediction market focused on one question: will the price of Ethereum go up or down?
And they will be betting for or against predictions made by artificial intelligence (AI).
"We're always exploring ways to create unique experiences for our users,” Pancakeswap’s pseudonymous product manager Chef Gyoza told Decrypt. “Adding AI to prediction markets was a logical next step."
The PancakeSwap prediction market will be based on Arbitrum, and invites users to forecast ETH price movements every 10 minutes, according to the announcement. Rewards for correct predictions will be distributed from a 60,000 ARB prize pool (about $49,600 as of writing) over the next nine weeks.
PancakeSwap has tapped decentralized AI network provider Allora to provide the AI predictions, which the exchange said has shown 65% accuracy in testing.
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The debut of PancakeSwap's AI prediction market comes as the crypto market awaits the launch of Ethereum spot ETFs in the U.S., and coincides with record-breaking activity on PolyMarket, which bills itself as the world's largest prediction market.
While PancakeSwap’s platform is focused on one question, PolyMarket supports countless wagers on a plethora of topics.
As of June 27, Polymarket has achieved a record monthly trading volume of $93.55 million and 26,560 monthly active users. The platform's top prediction focuses on the winner of the 2024 US presidential election, with more than $185 million bet so far. Current odds give Donald Trump a 60% chance of winning, while Joe Biden stands at 34%.
"Prediction markets gain significant attention around U.S. presidential elections due to their ability to focus market mechanisms on specific events,” Allora co-founder Nick Emmons told Decrypt. They're powerful tools for aggregating collective knowledge, especially when elections capture widespread attention."
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He said AI brings an important new dimension to the space.
"AI's ability to efficiently process vast datasets introduces a new type of trader to interact with these markets,” Emmons said.
With tonight's presidential debate between Joe Biden and Donald Trump, the crypto community will be watching with keen interest. Stand With Crypto, a grassroots advocacy group empowering crypto users, has gathered signatures to urge CNN to ask the candidates about crypto during the debate.
While public opinion polls continue to be the main gauge of public sentiment, Emmons said that could change.
"Over the next six months, prediction markets will likely see increased activity as election-related events unfold. This heightened interest will familiarize a broader audience with prediction markets,” he said. ”As a result, people will increasingly view these markets as a more definitive source of collective knowledge across a growing set of domains."
Edited by Ryan Ozawa.
