arXiv subjects

Shouqiao Wang

Publications and source records attributed to Shouqiao Wang.

7 recordsLinked to original sources

arXiv2026

Volatility in Prediction Markets: A Structural Approach

Forward-looking volatility forecasts are central inputs to derivatives pricing, market making, risk management, and volatility-linked trading strategies, with ARCH and GARCH models serving as the canonical workhorses. Such models are natural in standard asset markets, where prices are positive-valued stochastic processes and volatility is typically inferred from return dynamics. Prediction markets have a different structure: prices are bounded probabilities, payoffs are binary, and contracts resolve at known deadlines. We develop and estimate a volatility model tailored to binary prediction markets. The model combines two economic mechanisms: a Wright-Fisher deadline-resolution component, capturing how remaining binary uncertainty is forced to resolve over time, and a Glosten-Milgrom order-flow component, capturing volatility from informed trading as reflected in spreads and volume. Using a large panel of Kalshi contracts, we show that these structural variables carry substantial forecasting power. Plain ARCH/GARCH benchmarks are dominated by structural specifications; combining the structural model with residual GARCH dynamics gives the best overall forecasts. The model also provides an interpretable measurement framework: volatility is highest near fifty-fifty prices, rises near resolution, and varies across categories with the timing and discreteness of information arrival. Economics contracts are closer to smooth deadline-resolution dynamics, while sports contracts exhibit more event-concentrated, jump-like behavior. Across major categories, category-specific fitting does not systematically improve out-of-sample performance, suggesting that the structural specification transfers beyond the pooled headline result.

q-fin.TR↗

arXiv2026

A Complete Answer to Erdős Problem 690

Let \(d_k(p)\) denote the natural density of positive integers whose \(k\)-th smallest prime divisor is \(p\). Erdős asked whether, for each fixed \(k\), the sequence \(p\mapsto d_k(p)\) is unimodal as \(p\) ranges over the primes. Cambie proved that unimodality holds for \(1\le k\le3\) and verified non-unimodality for \(4\le k\le20\). We prove that \(p\mapsto d_k(p)\) is not unimodal for every \(k\ge4\), completing the classification. An exact first-difference criterion reduces the problem to comparing a symmetric-polynomial ratio with prime gaps. Explicit estimates for prime-counting functions, certified finite computations, one certified large prime gap, one certified twin prime, and a uniform Chinese-remainder construction then produce, for every \(k\ge4\), a strict descent followed by a later strict ascent.

math.NT↗

arXiv2026

Profit is the Red Team: Stress-Testing Agents in Strategic Economic Interactions

As agentic systems move into real-world deployments, their decisions increasingly depend on external inputs such as retrieved content, tool outputs, and information provided by other actors. When these inputs can be strategically shaped by adversaries, the relevant security risk extends beyond a fixed library of prompt attacks to adaptive strategies that steer agents toward unfavorable outcomes. We propose profit-driven red teaming, a stress-testing protocol that replaces handcrafted attacks with a learned opponent trained to maximize its profit using only scalar outcome feedback. The protocol requires no LLM-as-judge scoring, attack labels, or attack taxonomy, and is designed for structured settings with auditable outcomes. We instantiate it in a lean arena of four canonical economic interactions, which provide a controlled testbed for adaptive exploitability. In controlled experiments, agents that appear strong against static baselines become consistently exploitable under profit-optimized pressure, and the learned opponent discovers probing, anchoring, and deceptive commitments without explicit instruction. We then distill exploit episodes into concise prompt rules for the agent, which make most previously observed failures ineffective and substantially improve target performance. These results suggest that profit-driven red-team data can provide a practical route to improving robustness in structured agent settings with auditable outcomes.

cs.AI↗

arXiv2025

Proof of Sampling: A Nash Equilibrium-Based Verification Protocol for Decentralized Systems

This paper introduces the Proof of Sampling (PoSP) protocol, a Nash Equilibrium-based verification mechanism, and its application to decentralized machine learning inference through spML. Our protocol has a pure strategy Nash Equilibrium, compelling rational participants to act honestly. It economically disincentivizes dishonest behavior, making it costly for participants to compromise the network's integrity. In our spML protocol, we apply PoSP to decentralized inference for AI applications via a novel cryptographic protocol. The resulting protocol is much more efficient than zero knowledge proof based approaches. Moreover, we anticipate that the PoSP protocol could be effectively utilized for designing verification mechanisms within Actively Validated Services (AVS) in restaking solutions. We further expect that the PoSP protocol could be applied to a variety of other decentralized applications. Our approach enhances the reliability and efficiency of decentralized systems, paving the way for a new generation of decentralized applications.

cs.GT↗

arXiv2025

A Framework for Combined Transaction Posting and Pricing for Layer 2 Blockchains

This paper presents a comprehensive framework for transaction posting and pricing in Layer 2 (L2) blockchain systems, focusing on challenges stemming from fluctuating Layer 1 (L1) gas fees and the congestion issues within L2 networks. Existing methods have focused on the problem of optimal posting strategies to L1 in isolation, without simultaneously considering the L2 fee mechanism. In contrast, our work offers a unified approach that addresses the complex interplay between transaction queue dynamics, L1 cost variability, and user responses to L2 fees. We contribute by (1) formulating a dynamic model that integrates both posting and pricing strategies, capturing the interplay between L1 gas price fluctuations and L2 queue management, (2) deriving an optimal threshold-based posting policy that guides L2 sequencers in managing transactions based on queue length and current L1 conditions, and (3) establishing theoretical foundations for a dynamic L2 fee mechanism that balances cost recovery with congestion control. We validate our framework through simulations.

cs.GT↗

arXiv2025

GOD model: Privacy Preserved AI School for Personal Assistant

Personal AI assistants (e.g., Apple Intelligence, Meta AI) offer proactive recommendations that simplify everyday tasks, but their reliance on sensitive user data raises concerns about privacy and trust. To address these challenges, we introduce the Guardian of Data (GOD), a secure, privacy-preserving framework for training and evaluating AI assistants directly on-device. Unlike traditional benchmarks, the GOD model measures how well assistants can anticipate user needs-such as suggesting gifts-while protecting user data and autonomy. Functioning like an AI school, it addresses the cold start problem by simulating user queries and employing a curriculum-based approach to refine the performance of each assistant. Running within a Trusted Execution Environment (TEE), it safeguards user data while applying reinforcement and imitation learning to refine AI recommendations. A token-based incentive system encourages users to share data securely, creating a data flywheel that drives continuous improvement. Specifically, users mine with their data, and the mining rate is determined by GOD's evaluation of how well their AI assistant understands them across categories such as shopping, social interactions, productivity, trading, and Web3. By integrating privacy, personalization, and trust, the GOD model provides a scalable, responsible path for advancing personal AI assistants. For community collaboration, part of the framework is open-sourced at https://github.com/PIN-AI/God-Model.

cs.CR↗

arXiv2023

Optimal Dynamic Fees for Blockchain Resources

We develop a general and practical framework to address the problem of the optimal design of dynamic fee mechanisms for multiple blockchain resources. Our framework allows to compute policies that optimally trade-off between adjusting resource prices to handle persistent demand shifts versus being robust to local noise in the observed block demand. In the general case with more than one resource, our optimal policies correctly handle cross-effects (complementarity and substitutability) in resource demands. We also show how these cross-effects can be used to inform resource design, i.e. combining resources into bundles that have low demand-side cross-effects can yield simpler and more efficient price-update rules. Our framework is also practical, we demonstrate how it can be used to refine or inform the design of heuristic fee update rules such as EIP-1559 or EIP-4844 with two case studies. We then estimate a uni-dimensional version of our model using real market data from the Ethereum blockchain and empirically compare the performance of our optimal policies to EIP-1559.

cs.GT↗