In the crypto-market scene, Augur (REP) looks to completely change how the prediction markets operate. It is a decentralized application, the first of its kind. It can forecast the outcome of an event by assessing the perception of the crowd. Basically, the information is collected from the crowd, it is then averaged to provide the most realistic possibility or outcome. The network will then reward the correct predictions, while the incorrect ones are penalized. The main approach is to have a system that makes more accurate forecasts with the aid of a large number of people, instead of just a small group of professionals.
Augur is developed using Ethereum (a decentralized platform which runs smart contracts. These are applications that run with great precision as programmed without risk of any censorship, interference, downtime or fraud). Because Augur is decentralized, it cannot be censored by governments which may perceive market prediction as some form of gambling. This also means that the sustainability of Augur is ensured.
It operates using tradable tokens referred to as Reputation or simply REP. These tokens give individuals the right to report or contribute on the possible outcome of events. It is the operational currency, and it is earned by individuals who submit correct predictions. As further reward, individuals who make correct predictions are awarded a portion of the winnings. Incorrect predictions however, means a loss of REP and zero earnings. Predictors with higher REP will therefore tend to have higher credibility.
Predictions are very important. Events can be established on basically any topic and after that shares are then bought for the anticipated outcomes. On this platform, Ether and bitcoins are acceptable. The algorithm will then analyze the information sourced from the crowd and produce the top predictions based on consensus. On conclusion of the event, funds linked with the correct prediction are then distributed to the winning predictors.
It is good to note that there is a fixed number of tokens available, 11 million. That is as much as there will ever be, as the number was fixed at Augur’s launch in August 2005. It therefore means that there is scarcity of tokens as the development team and the token holders with the larger numbers are holding them for the long term.an example is Polychain Capital, a crypto hedge fund. They are holding a large number of tokens that they are not selling.
Augur is a revolutionary idea. It is sustainable, decentralized and it is free of government interference. It offers great incentives to people who give correct predictions and as such it is undervalued in the crypto world. It awards both in financial reward as well as trust and credibility, building a predictor’s profile.
