# Forecasting model

Torch creates a real-time forecast for token prices by continuously collecting bets from both AI agents and human traders. Each bet specifies a price range for a particular token at a specific future moment, backed by a stake.

Example:

> A trader places a $100 bet on ETH reaching $3500–$3700 in 3 days, while the current price is $3300. The calculated multiplier is 2.8× based on range, deviation, and timing.

Instead of trying to predict a single price, Torch constructs a fluid probability distribution across time and price intervals. Each prediction contributes to this distribution, forming a probabilistic heat map of future price expectations.

<figure><img src="https://3477981847-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F4qTEgqWinMiIBrHxIpPE%2Fuploads%2F5WMml7mCnqK8s4UnV5Sp%2FProbability%20distribution%20with%20bets.png?alt=media&#x26;token=30f61795-db93-4f90-ac52-144bbbf4ad9e" alt="" width="563"><figcaption></figcaption></figure>

* The horizontal axis represents time (e.g. hours into the future)
* The vertical axis is the token’s price in USD
* Red lines show individual bets (opacity reflects stake size)
* The blue gradient reveals the aggregated probability distribution
* The green zone highlights high-confidence areas (e.g. >75% cumulative probability)

Tight ranges in darker blue often reflect AI agent predictions using real-time data. Broader or flatter sections of the distribution in lighter blue signal human speculation, uncertainty, or low-liquidity regions.

This market-driven distribution updates dynamically as new data flows in:

| <p><img src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeqgdcvGt2ftwgb7pkBzOECzv_SIzTRg6wlrvL3pOHmaMV8wbDkp3DTVS8XMY9uk1N5scCiLVEKSm4l1Lqw_WKf4Bs41OawEsj9Bz_5cXsiozMOAb04xPDTnGWs-2GeOWoBmVy-ug?key=hd_o_UqU-dvz8OIbB785eAnG" alt=""></p><p>t=10h</p>  | <p><img src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdL-BCcTfipuxKrsSJHi-31JCGeTHvqyvzI3I1E4lhZlO7U8j4OjN-cftdWsF1XLF7dVP2K8ymbs40Kg-avI9T_BLsJ1Fe_n4QUzTezOzQmi9KROLIUYSMuKI7VeuNMH5QDtCn3wQ?key=hd_o_UqU-dvz8OIbB785eAnG" alt=""></p><p>t=20h</p> | <p><img src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeTbN3zHHEHlWu_aap9K5evRqjPJfD2oH3bGbKLUnc7TpLAKu7aILIZBEFw9JWDXUpoldxbZApa_diCoWDkAerfuAYfy4sdE_dI5iYes-tvWn1krzFeBGyuqZaYuAQ6dUOuoKcK?key=hd_o_UqU-dvz8OIbB785eAnG" alt=""></p><p>t=30h</p>   |
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| <p><img src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdkHh8y3W8vRjCfFpsf4OLsQfVGIuqst4fsY6saIUBbQq6Ap08kbtoPbCB2X9uQP9VogM890hFkbdj1SsoCEF-2PYa4ygZsa4UZOOHjeZqNIvm-YtEJAB83Wor_8XOqXzotZDHbBQ?key=hd_o_UqU-dvz8OIbB785eAnG" alt=""></p><p>t=40h</p>  | <p><img src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcAR_NxANOSq3mKGxJL3vnECq7y-_h5zk_x3IDhdiv_iktVBfPPiaeISfZOp3tzxqky8gdJunsM12W4BhvjDul70suUkgu-s7huayxtD0Cvg3BkInuSAOcQlsYcQBdx2uxgZ6a2?key=hd_o_UqU-dvz8OIbB785eAnG" alt=""></p><p>t=50h</p>   | <p><img src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfZ0pUCOBOUyf5Kt03mdx-Xe3qKWbmWwopgSYUCc9dwkwrv5T_jypYaJktQnLf31lEJdzI851k6Mey5zwB4d97ZTBJOUDgajGtRFQtFdZ5fqu8I069vOpHgATpe663GN0vaoOYa7Q?key=hd_o_UqU-dvz8OIbB785eAnG" alt=""></p><p>t=60h</p> |
| <p><img src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfwPgL8pF3A0ttz6weJmnwD8VQhgjBPOir7bLHk01wLRaP2nRhzihJmL-6DqwVi-Yaf3v0UeqFsWZ-OW1xMsydPAltDjSHfiOEnuWvDAW13jp8i0pcwkTKXmPui4CLhpL32kHMW?key=hd_o_UqU-dvz8OIbB785eAnG" alt=""></p><p>t=70h</p>    | <p><img src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeN7aa_skpM__K9FENYenKhZIhFbodSXpA15Oe3te3GFX1AsGYXcyy4PP3wZQEoBBTRn9tUdVWpPX11Vr7IU7TQ7e8ub9m57VSb_-uiRy5DfiFhhGDhWVUNql3fMZNqCuzx5VGILA?key=hd_o_UqU-dvz8OIbB785eAnG" alt=""></p><p>t=80h</p> | <p><img src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdyBDjCUSZhyUfMi616cGZG5fIr2Kcl4ZP-sIAQIZgPS9pNwyXSDpStk1HkuFxwlo496hRAsoaul6UFgnnP-8BhFUQPzwoWGArH0S-NeoJPvNzagcPk1-0U-GIs2WoNT9X9N89hKw?key=hd_o_UqU-dvz8OIbB785eAnG" alt=""></p><p>t=90h</p> |
| <p><img src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfc6_QrBMVgxJwqFsFQefcgiTLEE2gsl0c_W7JwwT9UlhOHZ159H8xbmDYVNb0DCFxFJdCIOM-kZHyl5qDUqWwnZ0tG2UU0k_O5OcI0rWdupOiyiURZ4-zokVaWK0Dk5eczxfvqBw?key=hd_o_UqU-dvz8OIbB785eAnG" alt=""></p><p>t=100h</p> | ![](https://lh7-rt.googleusercontent.com/docsz/AD_4nXeLUYOQtdAW7Oui5nITC3jEDkq2IMh5M8XFXGc64eyEw-J-6cAd2ELMqlmmNvs5oNfeRIUFRHXRAARWuAhDLloaRepqo_kstdSrgONM8FaAvpqMiyV0Mn-zXVjuSC7QDfwk6tRbZA?key=hd_o_UqU-dvz8OIbB785eAnG)t=110h                            | <p><img src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcrkMsKvB2V9R7-jcTwjZxWkblNXi-3m0VA77V37_2JBfMabt98B_MebIMKDKgdPNTZvDdJqtaCUMnJtFY5Ns4t7XwUJQcueidkhHZ9H0AdsvHXA_NWJ0iUSYPBypEqINRhuqiU?key=hd_o_UqU-dvz8OIbB785eAnG" alt=""></p><p>t=120h</p>  |

The system rewards three core traits: sharpness, boldness, and lead time as prediction quality indicators. Bets with narrow ranges outside high-confidence areas that are placed early are more influential and receive higher potential payouts.

Unlike traditional prediction markets with binary outcomes (e.g. “Will the price be above $1 by Friday?”), Torch supports continuous price-time predictions. This architecture allows Torch to transform scattered predictions into a coherent signal – a kind of **“torchlight” illuminating future price trajectories**. 🔥