AI Bots in Prediction Markets: A Growing Concern:-🔥🔥💥💥🚀🚀🚀🚀
AI bots are taking control of prediction markets, performing trade actions at a scale of thousands per second. Nonetheless, there are no infrastructure setups in place that will make it possible to verify these activities.
The Problem- Lack of Transparency: The agents can collude, glitch, and manipulate the market in such a way that no one can actually determine why the market prices behaved in a certain manner.
- Lack of Audit Trails: There are normally no trails of the decision-making process of the AI agent in making a certain decision.
What’s Required
- Verifiable Data Trails
A permanent, tamper-proof record of the origins of data and the way in which the data has been processed. - Transparent Trade Logic: The reasoning behind each trade, from what information triggered the trade to how sure the system was. -Auditable Settlements: All market closure decisions and reasons for settlement, and the process by which compensation is assessed.
Implication - Market Manipulation Risks: If inadequate infrastructure is in place, then the combination of AI and prediction markets is simply a disaster waiting to happen.
- Lack of Trust: Trust is necessary for markets, but it is difficult to generate, at least until an infrastructure is developed.
Future directions - Rethinking Market Infrastructure
A balance between decentralization and the need for organized record-keeping needs to be struck with regard to trust and accountability in markets that are AI-driven. - Building Trustworthy Systems: The future of prediction markets will depend on whether it’s possible for anyone to develop infrastructure that provides auditable trade functionality, the ability to verify results, or trustworthy systems.
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