Mode, a prominent Ethereum Layer 2 scaling solution focusing on decentralised finance (DeFi), has announced the launch of the Synth Subnet Testnet on Bittensor, a substantial decentralized AI network with an impressive ecosystem valued at $12 billion USD. This initiative aims to harness Bittensor’s decentralised intelligence network to develop highly sophisticated synthetic data for price forecasting, setting a new standard within the competitive landscape of DeFi.
The primary objective of the Synth project is to address current limitations in the predictive capabilities of AI agents and large language models (LLMs). By constructing models that capture the full distribution of potential price movements alongside their associated probabilities, Synth strives to provide what could be the most precise synthetic data available. This resource is anticipated to be particularly beneficial for options trading and portfolio management, serving as an essential tool for financial analysts and traders seeking insights into future price fluctuations.
Initially, the Synth platform will enable miners to generate 100 simulated price paths for Bitcoin (BTC) every five minutes. Miners' performance will be assessed based on their accuracy in modelling the probability distribution of future prices, with a keen focus on capturing realistic price dynamics, including volatility clustering and the complexities of skewed fat-tailed price change distributions. To ensure robust evaluations, validators will score miners by contrasting their output against historical price data from Pyth, utilizing a comprehensive scoring methodology that measures precision and reliability.
Bittensor distinguishes itself as a sophisticated network of dedicated sub-networks, known as subnets, each honing in on unique areas of artificial intelligence. With the introduction of Synth on testnet, Mode aims to tap into Bittensor’s advanced TAO economic model. This model is designed to incentivise the creation of high-value AI subnets, ultimately enhancing the capabilities of AI agents throughout the DeFi space.
James Ross, a Core Contributor at Mode, commented on the significance of this advancement, stating, “Synth marks a huge leap forward in enabling AI Agents to better model future asset prices.” Ross further explained that this progress is only achievable through leveraging Bittensor’s decentralised intelligence, asserting, “We anticipate that with Synth, AI Agents operating on Mode will be the most advanced in the space.”
The introduction of Synth positions Mode at the forefront of innovation in AI and DeFi, with the potential to redefine the extent of what AI agents can accomplish on-chain. The platform promises to deliver access to premium data sources specifically tailored for financial applications. More details about this initiative can be found on the dedicated project GitHub page.
Mode, built on Optimism’s OP Stack, has born the mission of expanding DeFi applications to billions of users by seamlessly integrating on-chain agents and AI-driven solutions. As businesses begin to explore the transformative nature of artificial intelligence in their operations, initiatives like synth reflect the ongoing trends and future directions within the realm of AI automation for business practices.
Source: Noah Wire Services