Augur operates with the objective of creating a network of computers which maintain a prediction market platform on a global scale. Their platform is built via Ethereum (ETH).

Augur Explained

Augur’s prediction market works somewhat similarly to how an exchange does but what are one’s standard trading assets here are replaced with the outcome of particular events. Consequently, users are capable of creating and exchanging “shares” which represent a fraction of the wagered outcome’s value.

Augur also maintains an order book for each independent market that users create and sets no limitations to what can be traded, be it a general election, the result on a particular sports event, or even what the weather will look like in a predetermined day of the month.

By correctly predicting the outcome of a certain event, users are rewarded with REP, Augur’s very own crypto asset. If they guess incorrectly, however, they lose whatever they bided, much like any wagering system out there.

The underlying idea is that whoever is participating can help outside observers assess the wisdom of the crowds (or crowdsourced knowledge) as means to gather data points on a global scale.

By using REP, users can create their own prediction markets and purchase participation tokens but traders do not necessarily need to own or use it to place a wager on Augur’s platform.

All final bet outcomes are executed via smart contracts which ensure that outcomes are correctly reported and payment is done to whichever users won.

Augur relies on 4 distinct processes:

1. Market Creation: in which anyone can create their very own betting market based on in real life events. To do so, creators must set a resolution source and a creator fee. The resolution source is basically where the outcomes are determined.

2. Market Trading: in which users buy shares concerning a specific event’s outcome. Price will fluctuate depending on the amounts placed

3. Reporting: in which an event outcome is determined by means of an Oracle (which relays real-world data into the blockchain) in tandem with a consensus mechanism (in which data from reports is considered truthful).

4. Settlement: in which traders close their positions and collect their respective payouts

The History Behind Augur

Augur is a project developed by the Forecast Foundation. The Forecast Foundation was founded in 2014 and in the following year, Augur became one of the very first projects to perform an initial coin offering (or ICO), raising and estimated $5 million US Dollars by selling 8.8 million REP. Augur’s platform launched in 2018.