Augur is a really interesting decentralized prediction market platform that did gain a lot of popularity in the past few days. It is also among the oldest on the market, one of the first that used the ETH network. The prediction market practically allows users to bet on future events and their outcomes. Those that get it right receive monetary prizes. The reward is bigger when you successfully predict something that has a really low possibility of happening.
How Does Augur Work?
Augur has 2 main actions that are available:
- Markets creations
- Trading event shares
Ethereum has to be spent in order to create one Augur market. Anything can be created as a market. As it is created, you set maker and taker fees (how much it costs to sell and buy shares). The taker fees have to be between 1 percent and 12.5 percent. The marker fees cannot be more than 50% of taker fees.
Trading Event Shares
Besides having the possibility to create markets, you are allowed to trade and buy shares. These shares represent odds that events will happen. When you see that there is a possibility that a specific event will happen, you buy shares. A share can be worth any amount between 0 ETH and 1 ETH. When you buy for a higher price you practically believe there is a much higher possibility the considered event is going to happen.
Traders make money with Augur in 2 ways. For starters, share prices fluctuate so you can buy a position at low costs to then sell at higher costs as sentiments change. This is possible since real world events can cause vents to be less/more likely in the future. Money can also be made as an event is correctly predicted and you are holding shares as the market closes.
REP stands for reputation and is the token that is used to power the Augur system. The user stakes REP in order to report on event outcomes for various markets. As the market closes and you put REP to back claims, if you were correct, you get REP back.
Obviously, the system is more complex than what was mentioned above but the idea is quite simple. REP is the token used on the Augur network and you need to hold REP to create events or to buy shares on events already created.
Why Is Augur Enjoying Popularity?
Augur is in the news because of its aggressive growth that was seen in the past few days. Basically, the REP token reached the highest value it ever has and Twitter signals state that the growth is going to continue. There is a clear increase in the number of people that are interested in being active on the Augur network. This is a clear sign that people are interested in buying. As this happens, value grows. We are looking at really high interest so there is a big possibility that value will keep growing.