Augur project aims to be an open source decentralized prediction market running on the ethereum network. Its a really cool idea, but it seems like a long time until its ready for live real money trading, or maybe I’m just impatient?
Augur was founded in 2014 with the first release coming in June 2015. Development was funded token crowdsale in October 2015. In 2016, Augur beta was released for testing on the Ethereum testnet. The project has gone through a few iterations since then, and while the community is waiting for real money release, the value of Augur tokens has been on a wild ride. At the time it was issued, the Augur tokens were one of the biggest Ethereum ICOs ever. The current market cap of Augur tokens is 11 million “REP” worth almost 500 million US dollars at the time of writing.
Back in December 2016, the value of REP tokens had been falling since the ICO, trading under $3 per REP, but by the summer of 2017, the price had climbed near $35 per REP. After trading in a range to just below $17, the REP tokens are now trading at all time highs above $40.
I’m not sure we can use the price of Augur REP tokens as a sign of the project’s progress/success. The value of REP tokens are secured by the ethereum blockchain, so digital security of REP tokens is as strong as the ethereum blockchain itself, but at the price of alt coins has been rising across generally, the REP price has gained as well. Its unclear how much of the gains in REP price are due to the specific viability of the Augur project, and how much is due to the general rise in the market value of alt coins. One way to find out would be to construct an index of alt coins, and compare REP returns to that index, try and strip out the market risk.
I’d really like to see Augur and other open source prediction markets such as Gnosis be successful, and I think they will be eventually, but I wish progress towards real money trading would happen sooner. To follow the progress of Augur, check out their regular blog posts.
Let’s talk about how Augur will work. Augur isn’t a for profit business, it will be an open source decentralized prediction market. This distinction is very important because its open source decentralized nature will be one of the features that protects it from being shut down by governments. Since Augur will run on blockchain tokens, it will become very difficult (if not practically impossible) for governments to stop Augur. There will be an Augur app that provides a basic user interface, but the real volume of Augur will likely come by interacting with the network by way of their API, check out their API documentation. If Augur can exist for real money trading, then hosted service providers will emerge to provide users with services that will help users interact on the Augur network. This will come in the form of business that exist to house user accounts, historical data for users, to guard user’s data and money, to provide payment services, etc. There will be data service providers that provide useful information to users.
I can think of lot’s of viable business models that will come to exist once Augur exists for real money. There will also be all sorts of ethical issues that emerge such as what to do about death markets, etc.
The odds that Augur will exist for real money use are getting higher, and I think the odds are becoming likely.