What is Augur?
Augur is a decentralized oracle and prediction market protocol, it allows you to speculate on anything with no limits. Augur was created in 2015, to explain it quickly, you can think of Augur as an alternative to centralized betting platforms where you can mainly place bets on sports. It enables the possibility of betting on the outcome of politics, cryptocurrency price predictions - really any event that has more than one outcome.
With the announced Augur v2 upgrades of a revamped friendly UI along with DAI and 0x integration happening during Q1 of 2020, REP is looking prime to carve out a hefty share of the ever-evolving Ethereum DeFi market - the perfect time to understand exactly how Augur (REP) works.
REP Token Explained
- How does Augur work?
- What is REP used for?
- REP Token Details
- Projects building on Augur protocol
- Price Prediction 2020 REP
How does Augur (REP) work?
The first part of understanding Augur is that the project is both a prediction market and an oracle. If the word blockchain oracle sounds like some magical term that should exist in a fantasy novel to you, then don't worry, we have covered blockchain oracles extensively in previous articles - What is a Blockchain Oracle?
Augur is powered by smart contracts deployed on Ethereum, they provide a decentralized and peer to peer betting platform for anyone. The way it works is that any user can create a new prediction event on anything they wish, all that needs to be specified is: the start and end times, a designated reporter, a source for the resolution and to set a creator fee. The creator fee is a percentage of the rewards that winning traders will receive, so as a prediction market creator, you need to set a fee that is low enough to incentivize people to bet on your market - but also high enough to cover the initial costs of creating the market (paid in ETH, REP and soon DAI).
Once a new prediction market is created, users can immediately buy shares: negative or positive regarding the outcome of the prediction. Users can continually trade these shares while the bet is active. The higher the price of a share, the more likely people believe that the event will happen. So you could earn money simply trading shares on a market or you can also earn by winning the bet. This would mean predicting an event's outcome correctly (holding the correct shares when a market closes).
The real beauty of this platform is that the team, known as the Forecast Foundation, operates in a truly decentralized manner: they do not have access to anyone's funds and cannot interfere with any predictions. They let the protocol manage itself and simply focus on improving the platform. The network is not regulated by any central body, so users really can bet on any event they wish.
What is REP used for then?
Augur markets follow what is known as the Wisdom of the Crowd principle, which is a theory that predictions will have a greater chance of being accurate if they are incentivized and crowdsourced. REP is short for Reputation token, for every action you take on the platform that uses REP you are staking your reputation on it and vice versa if you add value to the platform then you will gain REP.
Reputation token is used within the protocol at the market dispute phases of Augur as it gives holders voting power. This is where the outcome is reported and if necessary disputed. Effectively, REP holders govern the betting platform: staking their REP on correct outcomes to settle disputes in return they receive a portion of the market's settlement fees. As a result REP holders are incentivised to ensure the platform is being used legitimately (as in no one is winning bets that would be considered invalid or with incorrect outcomes). Furthermore, as this element of the platform is what keeps Augur running smoothly you can't be a passive REP holder and earn rewards: you have to actively be staking your REP on disputes.
REP Token Details
- Token name: Reputation
- Symbol: REP
- Standard: ERC20
- Current Price: 0.068984 Eth (~$9.61)
- All Time High: $99.80
- Circulating Supply: 11,000,000 REP
- ROI since launch: +550.91%
- Website: https://www.augur.net/
Projects Building on Augur
Augur is an open source project, and defines itself as a protocol which anyone can use however they please. Various projects are developing on top of the protocol, which you may like to keep your eye on. We believe this space will definitely grow once they have finished the V2 upgrade as this will introduce affiliate fees.
- Veil - a peer to peer derivatives exchange built on Augur and 0x.
- Guesser - an alternative UI, one of easiest ways to start using prediction markets to bet on anything.
- BlitzPredict - peer to peer betting built built on Augur, 0x, and MakerDAO.
- Predictions Global - An analytics UI for keeping tabs on any prediction market.
REP Token Price Prediction 2020
If we assume that Augur is going to successful launch V2 of their protocol during Q1 as announced, then 2020 is looking very exciting for REP holders. The protocol upgrade to V2 will include the integration of 0x to allow cheaper order creation, modification, and cancellations (when trading shares) and also integrate MakerDAO DAI stablecoin as the settlement currency. This is good because it is hard to attract long term prediction markets when you also have to factor in the volatility of Ethereum. They have also announced a follow-up release, to happen shortly after v2, which will include fiat on ramps for purchasing DAI and traditional login methods (email, phone number, Google) to help onboard more users.
The cost of REP tokens directly correlates with the demand for the platform so this is all very promising news.
In late October 2019 to early November we saw REP's price gain over 80% in just 11 days, definitely influenced by the upcoming V2 upgrade. A downtrend has followed, which shows that the price of REP tokens is still heavily tied to the situation on the altcoin market despite the project's good news.
We are confident that the demand for DeFi products and true decentralized infrastructure is going to explode over the course of 2020 which will be a positive influence for altcoin markets (smart contract blockchains). This is especially true for tokens like REP that could be at the heart of this explosion in usage. Currently, REP's market cap is valued at $106 million, imagine a scenario where traditional bookmakers started using Augur Protocol to power their platforms, it would cause the protocol's token to gain tremendously in price. Thus, our REP price prediction 2020 is $20-$24 depending on the altcoin market.
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