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Augur platform is based on the Ethereum blockchain and is a set of smart contracts. Augur is not a prediction market, it is software that allows users to create their own prediction markets.
Any user of the network can use the services of the Augur protocol via a desktop client application. You can download the latest version of the Augur App for Windows, Linux or Mac OS on GitHub. Augur protocol users place bets on the outcome of an event.
How to make money on Augur
The Augur platform provides two ways to make money:
- Creating a prediction market
- Trade forecast shares
A certain amount of ETH is required to create a market. The forecast can be on any topic, for example, "Will Bitcoin be worth $20,000 on January 1st, 2021?" A user who opens a new market with a prediction issues a certain number of ‘shares’, which will be bought by other market participants who are voting for this or that answer. The Market Creator also specifies the Creator Commission, which can range between 0-50% of the total award for the market winners. The lower the commission percentage, the more actively other users will participate in the market. However, the commission must cover the cost of securing the issued shares.
A participant who has bought a certain number of ‘shares’ is not obliged to keep them until the end of the voting and can sell them, if they consider such a deal to be profitable. So the buyer of the ‘shares’ can earn on the resale or hold the ‘shares’ until the end and if successful, get a win.
Example of a reward/loss distribution
One ‘share’ costs 0.5 ETH. Provided that you bought 1 share - when you win, you get 1 ETH; if you lose, you lose 0.5 ETH.
The system's internal token is called REP. REP is not needed to place bets, it is used by arbiters during Augur's market dispute phases to confirm voting results. REP holders must bet their tokens on the correct outcome of a specific market in order to receive a portion of the commission.
When creating a new poll, the owner chooses a ‘designated reporter’, that is, the oracle reporting the fact of the event. The source of verification indicates the creator of the market. They also put a deposit in REP, which will be returned to them after the outcome of the vote, regardless of the results. Unless, of course, they created a deliberately false topic, which should be recognized by the general consensus of the oracles. The amount of the promissory note varies, depending on the market created. In addition, insurance is made in case of inaction of the selected reporter.
Upon the fact of the event, the chosen oracle publishes a preliminary result within 3 days. After that, the deposit is returned in case of inaction. Otherwise, the deposit is used to pay for the public oracle, who will be the first to publish the fact of the event.
According to users, Augur could be a substitute for betting platforms that charge high commissions, ban winners, delay withdrawals, freeze accounts and have privacy issues that prevent mid-game bets from being sold.
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