Augur is a decentralized prediction market application built on Ethereum. Users can earn money by asking questions about real world events or predicting their outcomes. This decentralized application (dApp) not only serves as a platform for earning income by applying specific knowledge, but it also acts as a trusted oracle whereby the result of any real world outcome can be used by other dApps.
Augur was one of the first platforms to launch on the chain as an ERC20 token for their crowd sale. They raised 5.5 million dollars by selling the Augur token (REP) to investors who were excited about their vision for prediction markets and oracles. More details about prediction markets and oracles can be found on this page; or to find the best places to buy Augur, see the table below.
Binance is a cryptocurrency exchange with a daily trading volume that regularly exceeds 2.5 billion US dollars with a membership in excess of 10 million users
Changelly is a rapidly growing exchange which allows users to buy dozens of cryptocurrencies using a credit/debit card or other cryptocurrencies.
The Augur token and platform was conceived by Joey Krug and Jack Peterson in 2014. Krug quickly took a keen interest in prediction markets, seeing it as a means to bring financial markets to abstract assets (knowledge) which were not traditionally tradable, but still very valuable. Hence, Augur was born, which allows individuals to tokenize forecasts into a tradable asset. To ensure that the information that is fed into the system is correct, Augur also incentivizes their token holders to correct any market outcomes which may have been falsely reported.
Krug believes that a decentralized platform such as this can bring much power to global financial markets and the individuals who might utilize them. A prediction market that is based on a cryptocurrency allows for global accessibility, and users who may have previously been shut out of similar markets can now access them to trade in predictions. Augur brings forecasting to a global platform – while the West have no trouble accessing (for instance) local weather forecasts, those in developing countries, which are often so reliant on agriculture, can often be without key information. Augur incentivizes groups from anywhere in the world to make predictions, creating important forecasting data where there otherwise wouldn’t be any.
Along with cryptocurrency alumni Vitalik Buterin, co-founder of Ethereum, and an advisor for the Augur project, Joey Krug has been awarded a spot in the Thiel Fellowship, a networking opportunity provided by investor Peter Thiel to assist young entrepreneurs with their ventures. This not only bodes well for him, but it also could offer excellent resources and connections to the Augur project as a whole to assist in their ongoing development.
Purchasing Augur “reputation” tokens (REP)is an easy task, and it should only take you a few minutes to do so. In this guide, you’ll learn how to purchase REP on Changelly. The Changelly exchange offers cryptocurrency traders a fast way to swap their coins or tokens. Changelly is also one of the few exchanges where you can purchase cryptocurrencies, including Augur, by using a credit card.
The first step here is to choose the coin that you’d like to swap. In our case, we’re going to be trading our Ethereum (ETH) for some Augur (REP) tokens. However, there are many trading pairs you could utilize here including Bitcoin, Litecoin, US Dollars or Euros to accomplish the same goal. Once you select the amounts, you’ll receive a preview of how many tokens you can expect to get in exchange.
Once you click exchange, you’ll be prompted to create an account. If you don’t already have one, then you’ll need to create one in order to trade your tokens or coins on Changelly. You can choose to sign up with your email address or login using a social media account from Twitter, Facebook or Google+.
On the next screen, you’ll be asked to confirm your trade. Changelly will also give you an overview of the fees that you will incur for making the trade, and you’ll see the estimated amount of time that you’ll need to wait for the swap to complete. Look over this information carefully, and make sure that you agree before proceeding.
Next you’ll need to enter your Augur wallet address. If you do not already have an Augur wallet, then you’ll need to create one before proceeding, this can be done using MyEtherWallet or any other ERC20-compatible wallet. Changelly does not store your coins or tokens for you, so you’ll need a private wallet. There are many available for this purpose, but if you need a suggestion, then you could try Meta Mask for Firefox or Chrome browsers. When entering your wallet address, always be sure to double check that it is correct. If you send coins to an incorrect address you will not be able to retrieve them and you will lose your money.
This screen will list the final details of your trade including all the fees associated with the transfer, and it also provides an opportunity to confirm your wallet address. Make absolutely sure that all the information here is correct before proceeding.
The final step is to send the tokens that you want to exchange to Changelly. On this page you’ll be provided with a payment address to send your coins or tokens to. Make sure that you send the entire amount in one transaction to avoid any delays.
Once this step is completed you’ll need to wait for Changelly to confirm the trade. This can take anywhere from 5 to 30 minutes. If you’ve waited a good deal longer than that, then you may need to contact Changelly with your transaction number for assistance; although this is a rare occurance.
In order to understand the Augur token and its ecosystem, we must first define a few terms. These terms will be used throughout this guide, and understanding what they all mean will help you to better understand exactly what this cryptocurrency, and its technology aim to do.
A prediction market is an exchange which allows for the trading of the outcome of events. Almost anything can become tradable in this market such as the outcome of an election or the results of a match between sports teams. These are time based events with clear binary (yes/no) outcomes. For example, “Will Kanye Rest Run for Presidency in 2020?”.
In the context of Ethereum, an oracle is an entity which can be trusted to provide accurate outcomes in a digital format. When multiple parties transact, they can use an oracle to determine what happens to the transaction once an outcome is determined by the oracle. Depending on the value of the transaction, parties can agree on multiple oracles to ensure better accuracy for determining how the transaction behaves.
A smart contract is a software based agreement which can be utilized by one or more parties in order to create a trustless transactional environment. They can be automatically execute based on events, distributing assets to the parties involved. This is a simplification, as smart contracts can run highly complex tasks – many of which are yet to be imagined.
In a financial market, the bid price is the highest price that another party is willing to pay for a particular asset or security. These bids are filed into an order book, and they are filled in order of demand which can cause the price to rise or fall.
In financial markets, the ask price is the highest price that another party is willing to sell a particular asset or security for. These bids are recorded in the order book, and they are filled in order of demand, which can cause the price to rise or fall.
An ERC20 token is an Ethereum asset that while operating its own platform, piggybacks on the Ethereum network for security and ease of use. It’s very common for various blockchain projects to initially launch on the Ethereum chain to crowdfund their own platform, then swap these tokens for a new asset. However, some other assets never leave the Ethereum architecture at all, and continue to utilize it forever.
Augur is currently an ERC20 token, they initially launched on the Ethereum chain to crowd fund their project. Augur is now due to launch on the main Ethereum chain on July 9th to much anticipation. Augur has taken roughly 4 years to conceive, build, audit and launch – a platform of this scale takes a long time to get up and running, and investors will have to test the Augur beta on their website if they’re looking to get hands on with this prediction market. In order to participate in the beta platform, you will need to download MetaMask for Chrome or Firefox browsers.
Augur is a cryptocurrency based prediction market. A prediction market allows for information based assets which would not normally be tradable, to be exchange by various parties. The platform does this by utilizing smart contracts, effectively allowing interested parties to participate in this type of event based gambling without a middleman. This also allows for people across the globe to participate, when they may have previously been shut out of these financial markets due to the region in which they live.
Augur plans to decentralize and democratize financial markets by allowing investors to create markets where none are there, or to even give themselves access to markets in other countries that they may be excluded from due to needless red tape. Augur’s solution is censorship resistant, and it also offers low fees to participants. The platform ensures security by incentivizing its own members to weed out bad players with token rewards. The platform provides an opportunity for anyone, regardless of their location or their nationality to partake fairly in world markets, to hedge their traditional investments, and to create additional income streams.
The Augur system revolves around the sharing of information. That information can then be traded on markets created by its users, and of course that information must also be verified. This opens up three key areas for token holders to participate in the Augur ecosystem.
These are the individuals that trade within the markets. They can immediately begin to purchase or sell their shares in the event based information markets that are created. A trader would typically have specialized knowledge, allowing them to profit from correctly betting on the market. After the event has taken place, these users will pay a settlement fee to the market’s creator.
These individuals create the markets which will be traded. They are responsible for setting the start and end times for the events, and they must also choose a reporter to oversee the activity of the market. They will set a settlement fee which must be paid by those who wish to participate in this particular market.
Reporters are responsible for policing the markets, and they are paid in tokens for their efforts. It’s their job to weed out false information, helping to secure the network and remove fraud. They can dispute the outcome of events if users believe that information has not been accurately reported.
Now that we’ve defined all the players, we can explain the game a little easier. If you take a look at the Augur beta, you can see that the prediction markets operate on simple yes or no (binary) questions. For example, “Will the Golden State Warriors win the 2019 NBA Championship?”. Sports fans can then form their own opinions over whether or not they think the Warriors can win. They then can buy into a position in either the yes or no category. Each of these tokenized information assets will have shares for this purpose. The price of these shares will fluctuate based on the ask and the bid prices, and it’s possible to make money no matter the result as long as you trade your assets for a profit.
All of these actions are controlled by smart contracts within the ecosystem to allow for a trustless distribution of funds, without the need for a middleman who generally takes a large percentage of the trading profits for themselves.
Prediction markets are important, because they are not simply about gambling, but also about predicting the future. While our previous example may not seem profound, on a macro scale these markets could be used to tap into valuable data streams that can affect the outcomes of things far more important than basketball games.
Voter turnout and voluntary participation for information gathering in almost any sector is abysmal, and there’s no better way to up those numbers than to incentivize it through a prediction market platform. It also provides a way to gather valuable feedback that is less subject to manipulation, because there is a real dollar value attached to it. Players act honestly because they want to be rewarded for their efforts, acting dishonestly would simply come at an economic loss. This will empower organizations, corporations or even governments to gather honest feedback in various areas that may interest them.
However, there’s also another very useful case for prediction markets. It allows those who would otherwise be excluded from financial markets the ability to participate. Literally anything can become a traded security in a prediction market. The sale of information is nothing new, but prediction markets allow people of all locales and economic standing to finally participate in these sales to improve their lives, allowing them to earn income through knowledge of their own local events.
While normal financial markets require users to have specialized knowledge of the assets that they are trading, there’s no need to learn in a prediction market. Users can simply trade with information that they already know. Their existing knowledge concerning events taking place locally are now worth money. The low overhead involved with blockchain based platforms will allow many niche markets to pop up all over the globe that would otherwise not be possible.
While Augur has many merits, they also have some serious problems. For starters, they are built on the Ethereum blockchain, which has notoriously had trouble scaling its applications. If Augur’s main platform takes off, they could face similar issues. The Augur team recognizes this constraint, and have developed plans to enable some “off-chain” scaling through their own sidechain. This solution will take a good deal of engineering and it is currently not ready for production, however it will serve as a valuable backup if the Ethereum chain fails to scale with Plasma Cash, sharding or Casper.
The other rather large, looming issue for Augur is the very nature of their platform. While you can use all kinds of fancy words to describe it, they are essentially a gambling platform. This unfortunately is a legal grey area. While the U.S. Supreme Court did recently repeal the ban that they had previously enacted on sports betting, other forms of online betting are still not looked fondly upon by the US government. While their network itself is decentralized, the platform is accessed via their website, which creates a central point of failure. Full decentralization will likely be a necessity to avoid the legal pitfalls associated with their niche. This may need to be accomplished with a peer to peer application, which can not be seized or taken down.
They have also been subject to some serious vulnerabilities in their base token, and their smart contracts which operate the exchange. The team decided to switch from the Ethereum programming language, “Serpent”, to a newer and more secure protocol called Solidity. This transition is now almost complete.
Despite these challenges, Augur has a lot to offer to new investors. For starters, they are the first adopters of prediction markets on the blockchain, followed shortly by Gnosis (GNO). In the coming years, it’s likely that these markets will hold enormous amounts of capital, and they will provide legitimate use cases for Ethereum, which will be capable of a host of new features thanks to the availability of this information that prediction markets will provide. Other chains will be able to tap into these wells of data, which is already hosted on the Ethereum chain, for their own projects.
Augur is about more than just data; it’s about trusted data. Traditional data has become increasingly difficult to verify for accuracy, however with Augur as a trusted oracle, we now have a way to verify the legitimacy of this information before acting on it. This technology alone can improve many different areas of our daily lives and society as a whole.
As for the token itself, the circulating supply of Augur is only 11 million coins, for reference this is even lower than the current supply of Bitcoin, and there will never be any more Augur tokens minted. Every token was minted and distributed at the time of the crowd sale. That means the only way to get tokens is to purchase them, or earn them on the platform by performing tasks such as reporting. This fixed supply helps to promote upward pressure on the price of the token, however you do not actually need the token to trade on the platform (ETH can be used).
The buy pressure will be coming from those who wish to stake their tokens to earn money by being a reporter. As more people acquire these tokens to stake, the less of them that will be available, and the higher the price will rise with the demand for this asset. The Augur platform offers some very promising technology to investors who are ready to realize its future potential, and even more potential for those who wish to actively use their tokens to participate in the platform.
No matter which wallet you choose, make sure that you always backup your wallet seed. This will be a special password given to you when you create the wallet, and it’s the only way to recover your funds in the event of a hardware failure or the loss or theft of your host device. If you don’t have this, you’ll be unable to reclaim your funds.
Looking for something a little more secure? Cold storage is arguably the safest way to store your coins or tokens for the long term. The reason being that these wallets are not connected to the internet like a PC would be, and so there are less opportunities for them to be compromised. If you have purchased a good deal of Augur, then you may want to consider this option.
Most popular hardware wallets like Ledger or Trezor will allow investors to easily store their Ethereum based assets, such as Augur in highly secure cold storage. Just like the web wallet, you’ll be given a backup and recovery seed. Make sure to write this down on a sheet of paper and keep it somewhere safe. If your wallet is inoperable, lost, or stolen, you’ll use this to recover your investment on a new device.
While Coinbase has not formally announced their plans to host any particular assets, they have announced that they will be adding ERC20 tokens to their platform. The exact date for these additions is unknown, and investors will need to follow Coinbase to be updated on these additions.
The Augur main net release date is set as July 9th 2018. They have experienced some delays, thanks to the hassles with switching from Serpent to Solidity for security reasons, and that has likely slowed their main development goals a bit. While many are hopefully that they will release the main net by 2018, that information is not yet confirmed by the team.
Augur is not the only crypto prediction market out there. There are also Gnosis, Stox and Hivemind. While all of these platforms offer investors access to prediction markets, they all go about it in their own way. For example, Gnosis offers more robust options when it comes to outcomes that go beyond simple yes or no answers.
Potential investors can purchase Augur on a number of reputable exchanges, including fan favorite Binance, who just listed the asset recently. If you’re not a Binance fan, then there are plenty of other options including Cryptopia, Kraken, Bittrex, Poloniex, and Cobinhood.