Mode launches Synth 'subnet' on Bittensor to build decentralized AI that predicts crypto prices

Mode — a Layer 2 network focusing on agent development — rolled out a subnet on Bittensor for AI agents that can predict crypto prices.

While Mode primarily exists as a Layer 2 on Ethereum and is part of Optimism’s Superchain, the subnet will operate separately as an appchain in the Bittensor ecosystem to provide infrastructure for AI-driven financial modeling.

Bittensor is a blockchain protocol that facilitates a decentralized and collaborative machine-learning network. In this ecosystem, AI models operate decentralized, rewarding nodes (miners and validators) with TAO, its native cryptocurrency, based on the utility or accuracy of the AI outputs.

In this scenario, Mode's Synth would act as a subnet. Each subnet on Bittensor operates as an independent marketplace where participants compete to provide the best AI models for a specific task. 

Specifically, Sync would leverage Bittensor's model to incentivize the development of financial forecasting models. The developers said Synth will serve as a resource for querying future price probability distributions, targeting use cases in options trading and portfolio management.

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

Synth involves "miners" generating simulated price paths, which subnet validators evaluate against historical data to ensure they accurately reflect realistic price dynamics and volatility.

Initially, Synth will have miners generate 100 simulated price paths for bitcoin every five minutes. Miners will be evaluated and rewarded based on how accurately they model the probability distribution of future prices and their ability to encapsulate realistic price dynamics.

AI agents on Mode could then use these predictive capabilities. Mode was developed using OP Stack and is part of the Optimism  Superchain  ecosystem, along with others like OP Mainnet,  Base , Zora, Aevo and  Fraxtal .