Augur is a platform that helps users make accurate trading forecasts by crowdsourcing predictions. The Augur token, REP, serves as the medium for betting on the platform. If it succeeds, Augur represents a prediction market that could turn out to be the largest betting platform in the world.
Augur is a decentralized prediction market that creates a search engine for future events using its members to develop the data. Augur protocol is based on the Ethereum Blockchain, and just like its parent chain, it is a set of smart contracts written on Blockchains. The Augur platform runs on its own token, REP (Reputation token). Augur uses “The Wisdom of the Crowd,” derived from predictors on the platform to create almost accurate real-time predictive data.
History of AUGUR
Two former Ethereum developers started the Augur project. Jack Peterson, the Lead Developer, and Joey Krug, the Senior Back-end Developer, built the protocol in 2015. The token that runs the protocol (REP) was developed later that year with the token being offered to the public in April 2016. The coin has seen large-scale acceptance in exchanges with over 30 exchanges accepting trading of the token. The token crossed the $1B mark in market capitalization in December 2017, at an all-time high price of $108.
How Does Augur Work?
Augur consists of two primary actions, which set the network in motion, described in Augur’s 2015 whitepaper. A user can either create their own market, providing some initial funding and receiving half of all subsequent trading fees collected in return, or be a reporter, reporting every two months on the outcomes of a particular market.
Create a Market
A market creator first pays a small amount of Ethereum to create a market. For example, “Will Barcelona win the Champions League?”. To create a market in the protocol, you need to set the prices to buy and sell shares on the platform. These are the taker and maker fees, of which part is a creator fee, paid to the market creator and obtained from the rewards of the correct predictors. This represents the profit of the creator of the event.
Trading an Event-Share
In trading an event-share, you buy and trade shares that represent the odds of an event happening in the future. The shares are worth between 0 and 1 Ethereum. Users typically buy shares if they are confident that the event in question will occur, like placing a bet. Users can also make a profit by buying the shares at a low cost and selling them once the price of the share increases. Users then earn money if they predict the event correctly and still have the shares once the market closes.
A fixed number of REPutation tokens were created by the Augur developers. There are 11 million REP tokens, which is the total number of REP tokens that can ever exist. This makes the token favorable to its users due to scarcity. Augur completed their Crowdsale of REPutation tokens in August 2015 raising $5,293,459.15. This was a total of 18,183.02 Bitcoins (BTC), and 1,176,816.44 Ether (ETH) collected from 4550 account users. New users then buy tokens from these early users at a determined market price.
The token is obtained in the market by exchanging Ether for REP. A token is obtained by first opening an Ether wallet, then exchanging the token for Ether on an exchange that allows REPutation token trading. The REP is then transferred to your Ether wallet where you can create a market or trade event-shares through the protocol’s website.