Augur (REP) saw a very interesting uptick in volume from Sunday to Monday. The total money at stake on this decentralized, Ethereum-based prediction hive topped $300,000. Obviously, the World Cup final probably had something to do with this, but it is still an important development from this recently live betting application. To be specific, a metric measuring how much is being risked on the outcome of real-world events saw open interest jump by 51 percent to more than $325,000 over the period.
Actually, a single market – for whether the price of ether will exceed $500 at the end of the year – accounts for around half the open interest on the platform (nearly $150,000) and drove most of the increase in open interest over the past 24 hours.
One of the most exciting markets is the ability to hedge against risk. For example, a farmer could wager on rainfall per year in his or her given country as a hedge against crop spoiling due to drought. Thus, providing downside protection by limiting upside to support his or her family and keep the business afloat.
There are some other interesting markets popping up, specifically on holding the ICO market accountable; such as: MedCredits, which plans to raise money through a token sale, has created a market to bet on whether it will adhere to its roadmap, releasing an application on ethereum’s “mainnet” – or live blockchain.
What this should mean to crypto investors is that Augur is seeing rapid growth, which is extremely impressive in light of the fact that it just recently launched. If readers are unfamiliar, Augur, known by most for being the decentralized “betting market”, is more than just that – it is a decentralized prediction market and oracle service that wants to use the wisdom of the crowd to create a complete and accurate forecasting platform. Here is a quote from Co-Founder Joe Krug:
“We will see a world where one day asking Siri “Who will win the 2020 presidential election in the US” will return results that say “according to Augur, John McAfee has a 47% chance to win the 2020 presidential election”.
The underlying theory behind all this is that crowdsourced knowledge is valuable and accurate as long as there are informed forecasters. Augur users are rewarded for being on the right side of an outcome – REP or Reputation Tokens.
Backing up a little, the Augur ICO occurred from August 17-September 5, 2015. 8,800,000 REP tokens were sold at the time, with the remaining held by the founding team. The ICO raised 19,053.92 BTC and 1,176,816 ETH.
REP can’t be mined. Instead it’s earned by people who provide truthful reports on the outcomes of market events. It can also be earned by market creators, and there’s a bounty program that occasionally rewards REP for performing certain actions, as stated above.
Now, it is expected that only the most informed individuals will risk their money when making a prediction, and more informed forecasters will provide more accurate predictions over time, so therefore the share prices of prediction markets will accurately reflect the real-world possibility that said outcome will occur.
All this said, this is still a sticky legal situation roiling under all this. Augur is borderline online gambling and there are fears out there that the government could just swallow up the whole system instead of trying to freeze accounts.