If you know what dApps or decentralized applications are, you might have seen the name “Augur” mentioned as an example somewhere.
Now, as most crypto enthusiasts would have an idea about it, it is primarily a prediction market. It has a crypto currency native to it, called the Augur Cryptocurrency, having the ticker symbol REP.
In this article, we will tell you what the Augur Cryptocurrency is, so you are not stumped the next time someone mentions it.
However before that, let’s figure out the basics of it.
What is Augur?
Augur is essentially a prediction market based in blockchain technology, built on the Ethereum network. It is essentially a decentralized, P2P ( peer-to-peer) platform that is completely open source. What is a prediction market, you ask?
According to a common internet definition,
“Prediction markets are exchange-traded markets created for the purpose of trading the outcome of events. The market prices can indicate what the crowd thinks the probability of the event is. A prediction market contract trades between 0 and 100%. It is a binary option that will expire at the price of 0 or 100%.”
Therefore, the idea underlying the Augur platform is that people will earn rewards if they bet on the right outcome.
Now how are they to be rewarded? That is exactly where the Augur Cryptocurrency comes in.
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What is the Augur Cryptocurrency?
Augur uses a tradable token that is known as the Reputation Augur token.
Its ticker symbol is REP and it has a hard supply cap of 11 million. The reason why it is called the Reputation Coin is fairly straightforward.
The Augur platform is merit-based system. Whoever bets on more right outcomes has more credibility on the platform in question. They get a share of the total winnings as rewards for guessing the correct outcomes. Hence, their overall reputation gets boosted. On the other hand, people who don’t manage to attain that success rate and stick to reporting consensus, don’t earn anything.
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How Does The Augur Cryptocurrency Work?
To explain the working of Augur Cryptocurrency simplistically, we can explain it in terms of a few concise steps which usually involve a lot of precise aspects in reality.
You create a market at first and then you identify a Designated Reporter before posting a No-Show bond.
Once the event in question (the one you’re making predictions on) occurs, the Designated Reporter gets a three day time window to report their prediction. If the Designated Reporter fails to do so within the stipulated time period, the Market Creator must lose his or her No-Show bond, which leads to the event passing on to the Open Reporting Phase.
Now, anyone can make a prediction, and the first to do so gets a No-Show bond which would eventually serve as their stake in the platform. On the other hand, if the Designated Reporter succeeds within three days, the Market Creator gets his or her No-Show bond back.
No matter which one of these two things happen, the market goes into the Waiting for Next Fee Window to Begin. After this, the REP holders can raise objections with the tentative outcomes while they put up a part of their funds as stake. After the outcome is finalized, REP tokens are distributed as rewards accordingly.
Uses of Augur Cryptocurrency
The Augur Cryptocurrency is used in various kinds of prediction markets, that go beyond just betting. It can be even used in useful areas such as patient diagnosis.
According to co-founder Joey Krug,
The platform and its cryptocurrency could be used by farmers in Argentina to hedge against weather cycles or by Chinese traders who are unable to access the US stock market.
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