Understanding Augur, REP Token & the Decentralized Market Prediction Platform

Augur (REP) is a decentralized market prediction platform based on the Ethereum network. The market prediction platforms have been in the market for quite some time. However, Augur stands out among all of them. This is because Augur is a decentralized platform, unlike the others. In the market predictions of networks, you have the chance of betting on the outcome of the events that will happen in the future. This gains you monetary value if your predictions turn out right. It works on a principle that; predictions that turn out right on the less likely occurrences get the biggest rewards.

Augur in this case, applies the wisdom of the crowd from the predictors available in the platform. By leveraging the wisdom gathered, Augur creates predicting real-time data which happens to be more accurate than even the predictions,made by the leading experts. The fact that Augur brings the blockchain technology to the community of future predictions, it provides the users with better accuracy predictions, accessibility and lesser fees.

With that brief insight on what Augur is, we can proceed to the rest of the article where we will talk about its history, founders, market performance, features, wallets and how to trade using Augur.

History and Founders of Augur

The idea behind Augur was developed in 2014 by Jack Peterson and Joey Krug. According the Augur whitepaper, the two pictured a future with the first open source, decentralized market predictions platform. In 2015, they held a crowd sale which was conducted online to be able to fund the development of this project. However, this was after realizing the alpha version of Augur to the crypto market to evaluate the success of public testing modules.

The crowdsale came out successfully managing to raise over $5.2 million of which $2.5 million was raised in a span of 3 days. Later in 2016 March, the first Augur which was functional was released to the Ethereum test-net for further testing. Today, the development team of augur is still working to improve on the features of the software. Currently, there is still ongoing participation on the Augur beta.

The biggest competitor of Augur is known as Gnosis. This is because, both Augur and Gnosis have significant market presence and experience on blockchains too. In addition to that, they are using similar technological tools to create relatively similar products. The main difference occurs at the economic models of the two. While Augur focuses on collecting trading volume fees, Gnosis have its fees equal to the shares outstanding. All in all, the two platforms can co-exist realistically because the crypto market can hold very wide scope of members.

Understanding Augur

Augur has two reputable actions which are trading even markets and creating the markets themselves.

Creating Markets – For you to be able to create a market at Augur, you need to spend a certain amount of Ethereum. The components of these markets can be anything that you think about. When someone creates a market, they can decide to take the makers and takers fees which is the cost of buying and selling shares on the market. The taker fees are set to a minimum of 1.0% and a maximum of 12.5%. On the other hand, the maker fees can be more than half of the takers fees set in place. In addition, when you are the creator of the market, you receive fees when the market is closed.

In the new protocols, the creator will set what will be known as the creator fee and the taker vs maker fees will be non-existent. The creator fee will be derived from the rewards of the traders who will be holding wining positions and then passed on to the creator of the market.

Market creators will have to keep their settlement fees low enough in order to incentivize people to make bids using the markets they have created. The costs should however match up to the initial Ethereum cost used in creation of the market.

The Events of Trading Share – Apart from market creation, you can also opt for the buying and trading of shares that represents all the odds that will happen in a certain event in the market. Let’s say for example; Will Bitcoin Cash reach highs of $6 thousand? (To make you understand better, we will go by the yes/no answers).
Your analysis will look like this; Now that Bitcoin Cash has been added to the Coinbase platform, you may be interested by such a platform. Because you are confident it will reach $6 thousand by the time the year ends, you make a bid of 50 shares on roughly 0.6 ETH per every share. The higher the value of shares bought, dictates the level of confidence of your prediction being right.

If you are a trader on this platform, you can choose two discrete ways to make money on this platform. The fact that the prices may be fluctuating now and then, you can buy shares when they are at low prices and sell them when the prices rise again. The other money move is that; you can get your earnings if the prediction made turns out to be correct. This way, you get to hold the shares when the market is closed.

The REP Tokens

These Reputation Tokens are the tokens that are used to power Decentralized Oracle System of Augur. In that, you can stake the REP Tokens in order to report the event outcomes of certain different Markets. When the market is closed, the report on the outcomes of the events are put up at a certain amount of Reputation Tokens to back up your claims. If the event has not yet occurred, you can mark it as an invalid one so that you are not compelled to give a report on it.

Augur is a very promising Platform that will soon enough diversify the crypto currency world.


Noor Najam

Contributes guest posts to BlockPublisher with industry analysis & news in the blockchain space. Email: editor.opinions@blockpublisher.com

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