Augur is an open-source and decentralized prediction market platform built on top of the Ethereum blockchain.
Even though the project is not exactly new, it’s a very good example of how versatile and useful blockchain technology can be. The main goal of Augur is to create accurate forecasts and predictions of the future outcome of specific events. Furthermore, Augur aims to improve predictive communities by making them a lot more accessible, a lot cheaper, and more accurate.
How does it work?
To do that, the decentralized prediction market uses a principle called the “wisdom of the crowd.” The way it works is simple: feedback is collected from the “crowd” and is ultimately averaged in order to discover the most likely outcome.
Within the Augur market, users can purchase and sell shares on the outcome of future events. The price is dictated by the crowdsourced likelihood of the event occurring. Augur encourages truthful reporting, as users are incentivized with rewards for correct predictions and penalties for incorrect ones.
This is where Augur’s token, the REP (from Reputation), comes into play. Therefore, the prediction market pays its users for making correct predictions regarding events with REP. However, the creators of the markets as well as the holders of REP tokens who report on the events in question will also be awarded.
Another interesting aspect is the fact that predictions in the market are possible thanks to trading shares in the outcome of real-world events. In short, the profits one can make are heavily based on the likelihood of an event happening, as determined by the crowd.
Share prices are bound to change over time, with the price rising as more people start buying shares, and falling if people start selling their shares.
How to trade via Augur
As mentioned before, Augur allows users to create their own prediction markets. Additionally, users can also buy and sell shares to trade on the markets created by other users of the platform.
As a trader on the Augur platform, users can benefit or earn profits by either holding onto their shares until the market closes (and if their predictions are correct ear profits) or by buying positions when the cost is low and by selling them as the prices rise due to the changing sentiment. Events and sentiments in the real world can change the market price. In this case, users can earn profits by simply changing the value of shares (even prior to the market’s official closing).
The REP (Reputation) Token
The Augur platform is powered by the REP token. One REP token entitles users to 1/11,000,000 of Augur’s total market fees. REP allow users to “score” events on the platform, and holders can use them as a stake to report on the outcome of various events listed in the marketplace.
Users who hold REP tokens are called “reporters” and have the duty of reporting the outcome of random events listed on the marketplace at least once every couple of weeks. If the “reporters” in question fail to accurately predict the outcome, the tokens are redistributed evenly to all other reporters who actually got the answer right.
When it comes to market creators, things are different. To be more precise, anyone can create an Augur market for any real-world event. However, users need to keep in mind that there’s a small Ethereum fee involved in the process. Market creators set their individual commission, which is taken from the total pool collected when the market closes. As a rule, creator fees must be between 0% and 50%. Another aspect to keep in mind here is the fact that once the market is created, the fees can only be lowered, and never raised.
At the time of this writing, the REP token is ranked 46th on CoinMarketCap, with a total market cap of $141,562,719 and a 24-hour volume of $4,972,438.
Where to buy and how to store REP
REP tokens are available for purchase on a wide array of third-party crypto exchanges including Bithumb, LATOKEN, Binance, Upbit, ChaoEX, Poloniex, Bittrex, Kraken, and various other.
In regards to storing REP, users should know that there is no official wallet for the REP token on the Augur platform. However, users can store their REP by either using the Exodus Wallet or the Jaxx Wallet, or even Ledger Nano S (if a hardware wallet is better suited).
The Augur cycle
1.’Choose an event’
2. ‘Create a market’
3. ‘Buy and Sell Shares’
4. ‘Report the Outcome’
5. ‘Claim your Winnings’
The Augur Team
Augur started life in October 2014 thanks to a 13-person team led by Joey Krug and Jack Peterson. The Augur project was successful mainly due to its incredible team behind it, but also thanks to its multiple experienced and renowned advisors (including Vitalik Buterin, the creator of Ethereum).
Joey Krug is a very experienced programmer who studied Computer Science at Pomona College. He is renowned for conducting the first Bitcoin transaction via sound, and he’s also a member of the Theil Fellowship.
Jack Peterson also has a Ph.D. and displays incredible experience in physics, entrepreneurship, and software development. He is very skilled in blockchain programming, scientific computing, web development, and peer-to-peer networking, amongst other subjects.
The project released its first alpha version in June 2015, followed by a beta version in March 2016. The project took until mid-2018 to launch their Mainnet on Ethereum.
Augur has always seemed like a successful project (despite the long development period), and now, after its Mainnet launch, even more so. Backed by a very passionate and knowledgeable team, the project is gaining more and more popularity with each passing day. Even though it’s not the most popular project on the Ethereum platform, there is a good chance that decentralized prediction marketplaces such as Augur will play a key role in the future of our society in the years to come.