Tumblers

Tumblers are smart contracts containing lightweight machine learning algorithms, directly executing on the blockchain, ensuring transparent and secure AI computations.

Example application:

Application: A blockchain platform could employ basic machine learning models to analyze patterns in transaction data directly on-chain to detect fraudulent activities such as unusual transaction volumes or anomalous transfer patterns.

Setup:

• Data Preparation: Transaction data (amounts, timestamps, frequency, etc.) is stored directly on the blockchain.

• Model Development: A simple logistic regression or decision tree model is trained off-chain using historical data.

• On-chain Execution: The trained model parameters are deployed as part of a smart contract. When a new transaction is initiated, the smart contract evaluates the transaction against the model to predict if it is likely to be fraudulent.

• Response: Transactions flagged as potential fraud could be automatically held for additional verification or flagged to an administrator.

Application: Decentralized finance (DeFi) platforms can use basic machine learning models on-chain to adjust prices dynamically based on supply, demand, and other market conditions, such as for tokens, staking rewards, or fees.

Setup:

• Data Collection: Real-time data on trades, liquidity, and other relevant metrics are stored and accessible on-chain.

• Model Development: Develop a simple predictive model (e.g., linear regression) off-chain using historical price and volume data.

• On-chain Deployment: Deploy the model to execute within smart contracts to predict and adjust prices based on current market data input directly on the blockchain.

• Adjustment: Smart contracts automatically adjust pricing parameters based on model outputs to optimize for market conditions or platform objectives.