Architecture

Predicta System Architecture 🧠

Cortex Engine, Hedgehog (Risk), and Mimic (Social) Integration

Overview: Predicta is an autonomous intelligence layer for decentralized prediction markets. It combines AI-driven alpha generation (Cortex), automated risk management (Hedgehog), and community-driven copying (Mimic).

---

1. Core Ecosystem Components

Layer	Component	File / Contract	Role
Intelligence	Cortex Brain	cortex/alpha.py	7-factor market analysis (E1-E7)
Execution	Trader Bot	cortex/cortex_trader.py	Autonomous portfolio manager
Risk	Hedgehog (Hedge Engine)	cortex/hedge_adapter.py	Delta-neutral hedging via perps (SynFutures/ZEUS)
Social	Mimic Mode	cortex/mimic_relay.py	Multi-user copy trading orchestration
Persistence	Personal Vaults	contracts/PreonVault.sol	ERC-4626 personal trading accounts
Treasury	Yield Gateway	contracts/YieldGateway.sol	Lending integration (Moonwell) for self-funding bets

---

2. Integrated System Map

---

3. Key Subsystems

3.1 The Cortex Brain (System 2)

The “Analyst” layer that scores markets from 0 to 1 based on:

• E1 - Theta: Time decay.
• E2 - Depth: Order book liquidity.
• E4 - AI Prob: Domain-aware ML prediction (Crypto/Sports/Politics).
• E5 - Delusion: Market price vs. AI conviction.
• E7 - Sentiment: News and social analytics.

3.2 Hedgehog (The Hedge Engine)

Aims for delta-neutrality. When Cortex takes a directional bet on a crypto market (e.g., “BTC > $100k”), Hedgehog automatically opens an offsetting short position on a perpetual exchange (SynFutures or ZEUS).

3.3 Mimic Mode (The Social Relay)

Leverages Farcaster social signals.

• Signal: A Leader places a trade.
• Relay: The mimic_relay.py service detects the signal.
• Execution: The relay triggers mirror trades for all followers via their individual PreonVault contracts.

3.4 Yield Gateway & Preon Vaults

Predicta’s treasury management system:

• Personal Vaults: Each user (or mimic relationship) has a dedicated vault that holds PUSD.
• Yield Generation: Idle funds in vaults can be routed through the YieldGateway to Moonwell to earn interest, which can then be used to fund “Risk-Free” micro-bets.

3.5 Identity & Simulation (V2)

• Privy: Non-custodial identity provider supporting Email, Social, and Web3 logins.
• Embedded Wallets: Privy-managed MPC EOAs serve as the signers for Smart Accounts.
• Simulation Bypass: A headless authentication mechanism for persona-sim agents using deterministic tokens derived from a shared secret.

---

4. Technical Stack

• Blockchain: Base (Ethereum L2)
• Identity: Privy (Non-custodial, Social + Email + Wallet)
• Account Abstraction: ERC-4337 (Pimlico / Coinbase CDP Paymaster)
• Smart Contracts: Solidity (Foundry)
• Backend: Python (FastAPI, Web3.py) & Node.js (Next.js Server Actions)
• Frontend: Next.js 15, Tailwind CSS, Lucide React
• Data: Firestore (Real-time sync), Polymarket API (Gamma/CLOB)

---

5. Directory Structure

├── contracts/          # Smart Contracts (Foundry)
├── cortex/             # AI & Backend Services (Python)
│   ├── alpha.py        # Brain logic
│   ├── hedge_adapter.py# Risk management
│   └── mimic_relay.py  # Copy trading
├── functions/          # Firebase Cloud Functions (Node.js)
├── persona-sim/        # QA & Persona Simulation Engine
├── src/                # Frontend Application (Next.js)
│   ├── components/     # React UI components
│   └── lib/auth/       # Unified Identity (Privy)
└── docs/               # Technical Documentation