Prediction markets are undergoing a silent shift: signals are increasingly coming from machines, not just people. David Minarsch, CEO and co-founder of Valory AG, says autonomous AI agents are emerging as powerful tools for retail traders trying to compete in an automated environment.
Valory builds the Olas protocol (formerly Autonolas), infrastructure for autonomous software agents that run services on blockchains, interact with smart contracts, and earn crypto rewards. The broader vision is an "agent economy" — a decentralized ecosystem where AI agents perform useful tasks and generate value.
Polystrat Trades 24/7 While Users Sleep
Launched on Polymarket in February 2026, Polystrat is an AI agent that executes strategies around the clock on behalf of self-custody users. "In a nutshell, Polystrat is an autonomous AI agent that trades on Polymarket 24/7 on behalf of its human user," Minarsch said. While humans sleep, work, or lose focus, the agent keeps trading.
Prediction markets have surged from niche tools into a fast-growing fintech sector. After the 2024 U.S. presidential election spike, they expanded into sports, economics, and crypto bets. By 2025, total notional trading volume exceeded $44 billion, with monthly peaks of $13 billion. The market is concentrated: Kalshi (regulated by the CFTC) and Polymarket (crypto-native, global) together account for 85%-97% of volume, processing tens of billions in annual bets on elections, central-bank policy, sports, and more.
Why Machines May Outperform Humans
The push toward AI trading stems from a simple realization: modern AI models' intelligence hasn't fully entered financial markets. Valory began building a "prediction market economy" on Olas in 2023, where AI agents use prediction tools and data pipelines to forecast and trade. "Simply prompting off-the-shelf models with markets usually results in outcomes no better than a coin-flip," Minarsch noted. "But state-of-the-art AI models in custom workflows have shown predictive accuracy up to 70% or higher."
Third-party data shows only 7% to 13% of human traders achieve positive returns on prediction markets. Meanwhile, machine participation is growing: analytics platform LayerHub reports that over 30% of wallets on Polymarket already use AI agents. Minarsch believes this reflects a broader shift: "You have human participants in prediction markets alongside many machines, so humans are already in a battle with machines."