What is Augur?
Augur (REP) is a predictive platform token that runs on the Ethereum network. Announced in 2015, shortly after the public release of Ethereum, Augur’s mission is to create a “world changing forecasting tool” in which users collectively vote on the prediction of the outcome of a stated event. Users whose votes turn out to be correct are rewarded in the denomination of REP tokens. By employing a “wisdom of the crowd” type approach, Augur intends to not only forecast events but provide solutions to problems as well. Still undergoing thorough tweaking and testing as of February 2018, the platform has been in development for over 2 years.
History of Augur
Founded by lead developer Jack Peterson in 2014, the idea for Augur began out of the desire to apply blockchain technology to the newly-formed field of predictive markets. College Cryptocurrency Network director Jeremy Gardner and core developer Joey Krug soon joined the project, and in the spring of 2015 funds for Augur were raised for Augur in an Ethereum-backed ICO period. Augur is famously one of the first crowdsourced token projects hosted on the Ethereum platform, conducting their ICO before the term was synonymous with blockchain product development.
In January 2018, the development team released an updated version of the Augur whitepaper along with plans to successfully launch their platform before the year’s end.
How Augur Works
Augur is described as a “trustless, decentralized oracle and platform for prediction markets.” It is essentially a series of smart contracts that run on the Ethereum network, independent of human intervention. The Augur oracle allows real-world information to interface with the Ethereum blockchain without having to rely on a trusted intermediary. With Augur, anybody can ask their own question they would like to see be answered by creating a “market” surrounding the outcome of an event. A question is posed, outcomes are defined, and the source for outcome determination is posted publicly. Markets work by using a sophisticated incentives structure that rewards voters for their accurate predictions and rewards outcome reporters for correct outcome confirmations. The Market process consists of the following events:
- creation: the outcome of an event is questioned, variables are defined, Market is posted to the network
- trading: all users can buy or sell “shares” representative of the outcome of an event
- reporting: designated event reporters
- settlement: the payout process in which users with correct predictions and reporters with correct outcomes are rewarded in REP
The Market system is highly robust and features adjustment mechanisms used to discourage and mitigate attacks on the system. Current REP tokens available for trade only represent a stake in future products to be released by the Augur team and do not possess the qualities listed above, as the initial version of the Augur platform has not yet been released (as of February 2018).
As a platform for prediction markets, Augur can be used for the following:
- Placing bets on the outcome of events by casting votes using REP
- Collecting rewards for providing the correct outcomes of events
- Discovering solutions to problems via crowdsourcing