Augur (REP) is an Ethereum based, decentralized betting platform that is about to launch its very own mainnet on July 9th. The platform allows its users to trustlessly create prediction markets on the outcome of any future event. Besides providing the betting services, it will function as an oracle mechanism that will monitor real world user inputs and create an automated forecasting algorithm. The project was founded in 2014 and funded through an Initial Coin Offering (ICO) which lasted from August to October 2015 and raised a total of $5.3 million USD.
The platform will provide an infrastructure on which anyone will be able to create their own prediction market. These markets will be global, liquid and frictionless. Predictions can be based around any event in the world and potential users will use their REP tokens to buy shares in a certain outcome.
This is seen as a form of crowdsourcing, as each forecaster gives his opinion regarding what outcome will happen. Plenty of research has been done throughout the history which suggests that more people will know more about a certain topic than a single person, calling this principle “wisdom of the crowd”. Friedrich Hayek wrote a paper in 1945 titled “The Use of Knowledge in Society” which suggested that prices are information and that knowledge is decentralized among people, which clearly implies that planning and control over the resources need to be decentralized as well.
Successful forecasters will be treated as “informed”, and accumulating good guesses will net them financial incentives. This is done to encourage informed predictions. The platform expects that informed predictors will be willing to put more money on the line, which should help increase the reward pool for each prediction.
Naturally, a project like this one has plenty of upside in the world of sports. With real betting being banned in multiple parts of USA, Augur might appeal to individuals with extra money that would like to fulfill their need for predicting outcomes of sporting events.
Founders of the project believe that their platform has much wider application than being simply a sports betting platform. Augur’s Co-Founder, Joey Krug, sees a world where people will be asking Siri “Who will win the 2020 presidential election in the US” and Siri will be able to answer with “according to Augur, John McAfee has a 47% chance to win the 2020 presidential election”.
The project indeed seems like one for the future. It is a betting platform, yes, but it has other features that can further the blockchain technology. It offers a decentralized way of managing oracles, where token holders will be the oracles themselves. Oracle networks function by keeping the accurate oracles and throwing out the ones that bring in false data; with Augur, there will be money on the line so you better make sure you are making a well-informed guess.
Another advantage of Augur is that it tackles a 50 billion dollar market with a product that has a clear use case. It eliminates a lot of issues with regular online betting and provides a token that has actual usability on the platform/can potentially generate you more value. Pantera Capital backing surely doesn’t hurt the project either. With Augur still being relatively unknown and its mainnet about to go live in less than a month, it might not be a bad idea to consider investing in it.