Prediction markets have evolved significantly, shifting from niche forecasting tools to vital components of the fintech landscape. This transformation has been further amplified by the integration of artificial intelligence (AI), enabling machines to play pivotal roles in these markets. David Minarsch, CEO and co-founder of Valory AG, emphasizes this shift with their crypto-AI protocol, Olas (previously known as Autonolas), which facilitates the emergence of autonomous AI agents designed to enhance users’ predictive trading capabilities in an increasingly automated environment.
Olas serves as an innovative infrastructure for these autonomous software agents. These agents not only perform tasks on blockchains but also interact with smart contracts and collaborate with other agents, earning crypto rewards in the process. Minarsch envisions an “agent economy,” a decentralized digital ecosystem where AI agents deliver value for their users by completing various tasks autonomously.
A notable example of this emerging agent economy is Polystrat, an AI agent that debuted on the prediction-market platform Polymarket in February 2026. Polystrat autonomously trades on behalf of users, functioning tirelessly around the clock. According to Minarsch, this innovation addresses the limitations of human trading, allowing trading to continue even when users are preoccupied with other activities or resting.
The prediction markets segment gained substantial traction during the 2024 U.S. presidential election, witnessing a huge spike in trading volumes that surged into broader domains such as sports and economics. By 2025, platforms like Kalshi and Polymarket dominated the space, handling $44 billion in notional trading volume, with certain peak months seeing trading activity reach $13 billion.
As interest and participation in prediction markets grow, Minarsch notes the significant advantages provided by machine trading. Human participants face challenges in maintaining consistent performance; recent data reveals that only 7% to 13% of human traders manage to achieve profitability, whereas machines are quickly achieving higher success rates. Analytics indicate that over 30% of wallets on Polymarket are already utilizing AI agents, pointing to an ongoing competition between human and machine traders.
The early performance of Polystrat has exceeded expectations, with the agent executing more than 4,200 trades in its first month and achieving single-trade returns up to 376%. The performance metrics indicate that AI agents can substantially outperform human counterparts, with over 37% of AI agents demonstrating positive profit and loss outcomes.
Moreover, Minarsch highlights the untapped potential of “long tail” markets—niche questions often overlooked by human traders. AI agents, capable of analyzing numerous smaller markets simultaneously, can expand the scope of prediction markets, rendering them useful tools for businesses and policymakers who wish to aggregate dispersed knowledge effectively.
In this ever-evolving landscape, Minarsch does not foresee AI agents replacing human input entirely. Rather, he envisions a partnership between humans and AI, where the latter serves as complementary tools, enhancing decision-making and trading strategies.
On the regulatory front, the rise of prediction markets poses ethical concerns. Critics warn that markets reliant on speculation around negative events, such as wars or disasters, could inadvertently incentivize harmful outcomes. Minarsch acknowledges the necessity for regulatory frameworks governing these markets while asserting that AI agents could also mitigate risks by identifying suspicious activities and flagging problematic markets.
Valory AG’s aspirational vision extends beyond optimized trading strategies. Minarsch is committed to empowering everyday users, ensuring they retain agency in an increasingly automated digital economy. Emphasizing user ownership of AI systems, the Olas project aims to enable individuals to interact in an owner-centric environment where they can deploy autonomous agents for value generation.
In summary, the intersection of AI and prediction markets offers promising opportunities for sophisticated trading mechanisms while presenting essential considerations surrounding ethics and regulation. As the technology advances, stakeholder engagement will be crucial to shaping a balanced and inclusive digital ecosystem.
