Is AI Generated Odds the Solution to Thin Prediction Markets for Niche Crypto Events?

i've been using prediction markets on and off for a while now to track sentiment on crypto events. the problem i keep running into is that anything outside of bitcoin and ethereum price milestones just doesn't have enough liquidity to be useful. you find an interesting market on something like a specific protocol upgrade or a layer 2 adoption metric and there's basically nobody trading it. the spread is huge or the market just doesn't exist at all.

i've been reading about a different approach where instead of relying on human counterparties for liquidity, an ai generates the odds in real time for any binary event you want to track. so you could ask something like 'will solana process over 100 million transactions in a single day before end of q3' and get a live probability estimate without needing to find another person who cares about that specific thing.

My questions for people here:

1. do you think ai generated odds are actually useful as a sentiment or information signal for niche crypto events, or is human traded liquidity the only thing that gives prediction market prices real meaning?

2. what kinds of crypto events would you most want to see covered that current prediction markets totally ignore?

3. does the ai as the house model feel trustworthy to you or does it raise concerns about how the odds are actually being set?

Update: I appreciate all the feedback here. while researching this topic, i was able to discover prophetmarket ai, an ai powered prediction market where users trade directly against an autonomous ai with a bankroll. what interested me is that it can instantly create markets on niche crypto events that traditional prediction markets often ignore due to low liquidity