Mode Launches Subnet for AI-Driven Crypto Price Prediction

Mode, a Layer 2 network focused on agent development, has introduced a subnet on Bittensor for AI agents designed to predict cryptocurrency prices.

While primarily a Layer 2 on Ethereum and part of Optimism’s Superchain, this subnet will function independently as an appchain within the Bittensor ecosystem, providing infrastructure for AI-driven financial modeling.

Bittensor Overview

Bittensor is a blockchain protocol enabling a decentralized and collaborative machine-learning network. Within this ecosystem, AI models operate in a decentralized manner, with nodes (miners and validators) rewarded with TAO, the native cryptocurrency, based on the utility or accuracy of their AI outputs.

Role of Mode’s Synth

In this setup, Mode’s Synth will act as a subnet. Each subnet within Bittensor operates as an independent marketplace where participants compete to offer the best AI models for specific tasks.

Synth aims to incentive the development of financial forecasting models. According to developers, it will serve as a resource for querying future price probability distributions, targeting applications in options trading and portfolio management.

> “Synth marks a huge leap forward in enabling AI agents to better model the volatility of asset prices,” stated James Ross, co-founder of Mode. “This is only possible by leveraging Bittensor’s decentralized intelligence.”

How Synth Works

Synth requires miners to generate simulated price paths, which are then evaluated by subnet validators against historical data to ensure accuracy and realism in price dynamics and volatility.

Initially, miners will generate 100 simulated price paths for Bitcoin every five minutes. They will be assessed and rewarded based on their accuracy in modeling future price probability distributions and managing realistic price dynamics.

As a result, AI agents on Mode can employ these predictive capabilities effectively. Mode was developed using OP Stack, and is part of the Optimism Superchain ecosystem, which includes other platforms like OP Mainnet, Base, Zora, Aevo, and Fraxtal.