Augur (REP) can predict the future - wanna bet?

Augur (REP) can predict the future - wanna bet?

Augur (REP) can predict the future - wanna bet?

If you’re a gambler, you’ve probably heard about Augur but might be confused about what it is exactly. That’s hardly surprising; the project dates all the way back to 2015 and has undergone numerous changes.

In this article, we’ll explain what Augur is now, how the REP token works, and why the project is so unique.

    What is Augur?

    At its heart, Augur is a protocol for a decentralized prediction market, a place for no-limit betting on the outcomes of real-world events. Unlike a traditional betting market, Augur is essentially a set of Ethereum smart contracts with no central authority. And because the code is open-source, developers can use it to build their own Web 3-based betting sites.

    Completely anonymous and virtually unrestricted, anyone can create a market and take a position on it. Users transact directly, so there’s only a small participation fee determined by the market creator.

    Augur harnesses the “wisdom of the crowd” principle, a formal way of saying, “putting your money where your mouth is.”  In other words, the most popular betting position is statistically more likely to be true. Augur thus incentivizes crowdsourced truth-seeking.

    It’s one of the longest-lived applications on Ethereum, having raised funds through an ICO in 2015. Development has been guided by The Forecast Foundation, a group of passionate developers and technology experts that don’t own Augur, receive fees from its use or control how markets are resolved.

    How Augur v2 Works

    Augur Version v2 went live in 2018, incorporating a long list of improvements. Within the first month, more than 800 bets were made with over $1.53 million staked.

    With v2, a market can be anything at all, from sports and election outcomes to whether Ethereum will rise to $10,000 or a killer asteroid will strike the earth this year. One Augur user even created a market that allows betters to gamble on whether Vitalik Buterin will ever get a girlfriend or not. Predictions can be yes/no, multiple-choice or “scalar” (what will the value be at a certain time).

    The market creator posts a bond to ensure against unresolvable bets, and then participants can place bets immediately using the DAI stablecoin.

    In May 2021, Augur Turbo was released. Built on the Polygon layer 2 protocol for faster speed and virtually no network fees, all outcomes are resolved using the Chainlink oracle rather than the older method which relies on REP holders staking their coins to the correct outcome. Augur Turbo was developed specifically for placing sports bets, and in November it was rebranded as Sportsbook.

    Users can bet on NBA, NFL and MLB games as well as UFC Mixed Martial Arts and Olympic events. Support for college football, soccer, tennis and golf are also planned. Bets are placed using the USDC stablecoin.

    The REP token

    Augur uses Reputation (REP), an ERC777 token. There’s a fixed supply of 11 million, all of which are in circulation. The price has remained remarkably steady since its 2015 launch, except for spikes in 2018 and 2021 with the initial releases of v2 and Turbo.

    Stablecoins, not REP, are not used for placing bets. With Augur v2, REP is required for creating markets, and holders also serve as reporters, staking their tokens on the outcome they believe matches the real world. All REP that’s staked contrary to the consensus is forfeited and distributed to reporters who matched the consensus. This incentivizes reports to stake realistically.

    For example, a bet on the 2020 US Presidential election might motivate some reporters to claim Donald Trump as the winner. But they would do so knowing their stake would be forfeited. Moreover, more reporters would likely jump in on the other side as the reward grows.

    At its 2021 launch, Augur Turbo does not use REP for creating markets or determining outcomes, though developers plan to use it as a governance token.

    Is it Legal?

    The Forecasting Foundation has always taken the position that Augur is merely a protocol, and that it’s the responsibility of platform developers to follow all applicable laws.

    However, the Sportsbook main page presents a message that the service is not available to citizens of Belarus, Cuba, Iran, Iraq, Côte d'Ivoire, Liberia, North Korea, Sudan, Syria, the United Kingdom, the United States or Zimbabwe.

    In fact, the legal landscape is complex. In the US, gambling is generally regulated at the state level. Users are advised to err on the side of caution.

    Augur’s Future

    From its inception, Augur was envisioned as an autonomous, decentralized system governed and owned by its community, represented by the Forecast Foundation. Unfortunately, this approach has meant they couldn’t rely on traditional centralized approaches for bootstrapping markets, incentivizing users, and fixing any bugs in the code.

    As a result, In November 2021 the Foundation teamed up with DXdao to develop AugurDAO. The organization is governed by REP token holders, who decide how to allocate resources to further develop Augur and decentralized prediction markets in general. Users can join the DAOTalk forum and follow discussions concerning future development. The Forecast Foundation will be disbanded.

    Sportsbook has a less certain future, with trading prohibited for US and UK residents without a VPN connection. Meanwhile, Augur v2 has continued on Ethereum as Augur Pro, still allowing bets on anything that participants can dream up.

    This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.

    Get insider crypto knowledge and product updates from the world’s leading crypto wallet
    Sign me up