Augur Is a decentralized open source prediction market platform and predictor service. Prediction markets on the platform will enable users to create a market that predicts specific future events, such as who will win the next election or which team will win the World Cup. Market participants will be able to buy "shares" in a particular outcome that they think is most likely. At the end of the scheduled time period, the results are checked and the person with the correct share of results wins a monetary prize. Prediction markets can be a useful tool for tracking the true mood of the results, because usually only the best informed individuals take risks when making predictions.
Augur How prediction markets work
Augur forecast market workflow can be divided into four parts; Market creation, trading, reporting and settlement.
The market will be created by the user responsible for setting parameters around the event, For example, the end date of the market and the designated predictor or reporting entity. Once the end date is reached, the designated predictor is responsible for providing the outcome of the event, such as who won the election. This designated predictor not only determines the outcome of the market, but can be debated and corrected by the community. The creator must also choose a resolution source, such as "bbc.com", and set the creator fee to be paid to the market creator when the trade is settled. In addition, the creator must post a valid margin in the REP as an incentive to create a well-defined event and, in the absence of a margin, an incentive to select a credible journalist.
Shares can be freely traded when created, Market participants predict the outcome of events by trading their share of those possible outcomes in ETH terms. This can cause price volatility, as prices can change dramatically between market creation and settlement, so v2 of the protocol introduced the use of staboin . Using the Augur matching engine, anyone can create or fill out an existing order. Ownership of all Augur assets -- including shares in market results, fee window tokens, disputed bonds, and even the market itself -- can be transferred at any time.
These prognosticators are profit-driven journalists, incentivized to report real world results. Anyone with a REP token can participate in reporting and disputing the results. Journalists whose results agree with consensus are rewarded, and those whose results disagree are punished.
Reports that the system is running within the 7-day expense window. All fees collected during the corresponding window period are summarized and distributed to journalists who contributed during that window period. The reporter receives a reward proportional to the number of reps mortgaged during the fee window. To incentivise continued participation during each fee window, REP holders can also purchase participating tokens, which are exchangeable for a portion of the fee pool.
Settlement Prophet charges creator fees and reporter fees. These fees are proportional to the amount paid to individual users. Creator fees are set during market creation and reporting fees are set dynamically.