Alteron is a decentralized intelligence network powered by Bittensor, designed to transform decentralized finance (DeFi) and cross-protocol ecosystems through advanced automation and intelligence. Starting as a proof of concept (PoC) focused on vault optimization, Alteron enables miners to analyze and predict key metrics for governed vaults while suggesting actionable parameter updates. Over time, Alteron will evolve into a comprehensive strategy network addressing tasks like yield optimization, cross-chain token bridging, and portfolio rebalancing.
Alteron provides tools to optimize risk parameters, facilitate cross-protocol interactions, and maximize capital efficiency by leveraging dynamic data-driven models. By combining predictive insights with adaptive updates, Alteron ensures smarter decision-making for vault owners and DeFi participants.
Miners in the Alteron network receive prompts to provide probabilistic forecasts for specific metrics related to vault performance. Each prompt includes the following parameters:
- Vault Address: The governed vault for which predictions are required.
- Metric: The target metric to predict, such as utilization rate, interest rate optimization, or liquidity trends.
- Time Increment (Δt): The interval between predictions (e.g., 1 hour, 6 hours).
- Time Horizon (T): The total period over which predictions are required (e.g., 24 hours).
- Number of Simulations (N): The number of probabilistic paths miners must generate for the specified metric.
Example Prompt:
- Vault Address:
0x1234...abcd - Metric: Utilization Rate
- Time Increment: 1 hour
- Time Horizon: 12 hours
- Number of Simulations: 100
Miners must return their predictions before the specified start time, adhering to the required format.
Miners provide probabilistic forecasts that include:
- Simulated Paths: Multiple paths showing the predicted evolution of the target metric over the specified time horizon.
- Uncertainty Quantification: Confidence intervals or distributions for their predictions.
- Parameter Suggestions: Recommendations for vault parameter adjustments (e.g., interest rate changes) based on their forecasts.
While not all parameter suggestions can be directly executed or validated, the data from these recommendations will be aggregated over time to provide deeper insights into the relationship between key metrics and market conditions. This aggregated understanding will be valuable for refining models and identifying high-performing miners.
Example Output:
- Predicted Utilization Rates:
- Path 1: [70%, 75%, 80%, 85%]
- Path 2: [68%, 73%, 79%, 83%]
- Confidence Interval: [65%, 85%]
- Suggested Adjustment: Increase interest rate to 1.5% to optimize utilization.
Validators in the Alteron network evaluate miners’ outputs by comparing their forecasts to actual vault performance at the end of the time horizon. The evaluation process includes:
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Accuracy: Measured using probabilistic scoring rules such as the Continuous Ranked Probability Score (CRPS), which evaluates the closeness of the forecast to the observed outcomes.
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Timeliness: Ensuring miners’ submissions are within the required timeframe.
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Performance History: Miners with a strong track record of accurate forecasts will have their parameter suggestions carry more weight in future analyses and aggregated insights.
Scores are normalized using a softmax function to ensure relative performance is highlighted. This approach emphasizes differences in performance among miners, rewarding those with better predictions.
Miners’ leaderboard scores are calculated as an exponentially decaying time-weighted average of their past normalized scores. This ensures that recent performance has more influence on their current ranking.
Daily emissions are distributed proportionally based on leaderboard scores. An amplification factor is applied to reward higher-performing miners more significantly, encouraging consistent high-quality predictions.
Over time, the Alteron network will build a comprehensive dataset linking metrics to market behavior based on miners’ predictions and parameter suggestions. This dataset will:
- Enable more accurate modeling of market dynamics.
- Provide actionable insights for protocol owners to refine governance parameters.
- Highlight miners who consistently perform well in forecasting, making their suggestions increasingly meaningful.
By focusing on aggregated insights, Alteron ensures long-term value creation beyond immediate scoring and reward distribution.
Alteron’s broader vision is to become a universal strategy network for DeFi users, providing dynamic, personalized solutions for a wide range of tasks. Future developments will enable Alteron to:
- Optimize Yield Strategies: Help users identify and implement tailored solutions to maximize returns across protocols, balancing risk and reward.
- Simplify Token Swaps and Bridging: Provide efficient, automated cross-chain transaction strategies to enhance user experience.
- Enhance Portfolio Management: Streamline complex workflows, enabling users to rebalance and optimize portfolios with ease and precision.
- Personalized Strategy Generation: Allow users to define specific goals—such as yield maximization, risk minimization, or liquidity management—and receive comprehensive, AI-driven action plans tailored to their needs.
- Empower Agents with Advanced Models: Alteron leverages stochastic financial modeling to address systemic risks in DeFi and restaking spaces, ensuring smarter, data-driven decisions.
- Effortless Automation: Transform workflows into streamlined processes, saving time, minimizing errors, and enhancing operational efficiency.
- Optimize Capital Efficiency: Continuously improve financial processes with dynamic, real-time insights and adaptive updates tailored to evolving market conditions.
Alteron creates a collaborative environment where miners, validators, and users work together to unlock the full potential of decentralized financial systems, setting the foundation for the future of intelligent strategy networks.