Augur is a decentralized prediction market project that aims to harness the "wisdom of crowds" to create an accurate prediction platform.

Augur's long-term vision is to outperform all derivatives markets in terms of liquidity and network effects.

In prediction markets, although the internal participants are zero-sum games, the betting situation can reflect the wisdom of the group (rational economic game), which can provide additional useful information to the outside world (such as policy makers) and help improve the operating efficiency of the society. The prediction market with centralized structure has risks such as user fund opacity and platform malfeasance. Therefore, the distributed prediction market constructed based on blockchain technology allows users to predict and bet with digital currency and predict the development results of events by relying on the wisdom of the crowd. It can effectively eliminate counterparty risks and centralized risks of servers, and create a global market with cryptocurrencies (such as Bitcoin).

Augur market prediction activities mainly include four processes: market establishment, trading, reporting and settlement. Anyone can create a market based on any real event, and it can start immediately after creation, allowing all users to trade freely in any market. After the event has occurred, i.e. after the predicted event has occurred and the actual outcome has been determined, the trader can close the position and collect his profit.

The Augur forecasting process includes Creation, Trading, Reporting and Settlement. Augur allows users around the world to create prediction markets for any topic of interest, In this process, Creator needs to set specific prediction topic, topic type, market type (including Yes/No, Multiple Choice and Numerical Range), information source of prediction results and Designated reporter Repoetor, you can specify yourself), event end time, transaction fees, and initial liquidity. Through the Augur platform, users can participate in any prediction market of interest. Augur keeps a trade order book for each prediction market created on the platform to automatically match counterparties for users. When placing an order, the user sets a limit price. The system can execute the order at a better price than the limit price, and the user can cancel the uncompleted order at any time. To match an order, Augur requires both parties to complete a counterparty trade. If the prediction result contains two options A and B, Alice is willing to buy A at 0.6ETH per share and Bob is willing to buy B at 0.4ETH per share, then the system will match these two orders for transaction. When the event occurs, the party that forecasts correctly will get 1ETH per share, and the income is 1ETH minus the original buyer's cost; The wrong party is not rewarded, and the loss is the original purchase cost. The outcome of events is determined by Augur's prognosticators, whose role is played by reporters, who report the true outcome of events. Any user with a REP token can participate in reporting and disputing the outcome of the event. Rapporteurs who report in line with the consensus are rewarded, and those who do not are punished. After the end of the event in the prediction market, the designated reporter has 3 days to report the result. If this time is exceeded, anyone can report the result of the event and the builder's no-show Bond is forfeited. After that, the dispute phase begins while waiting for the next 7-day Fee Windows. During the dispute phase, any user holding a REP can contest the results, but the challenger needs to mortgage twice as much REP as the reporter, and then the market enters a new 7-day dispute window. When the number of reps mortgaged exceeds 2.5% of the total number of rePs in circulation, Augur goes into a bifurcation state, which is the last resort to resolve an argument. After a fork, the entire Augur platform freezes and all prediction markets are closed until the fork is resolved. Users can settle accounts in two ways. In the transaction phase, users can sell their shares to other users at any time. The other is that after the event result is determined, the Market enters the settlement stage. Users will get corresponding rewards according to the event result, the Market Creator will get the set Market Creator Fee, and the reporter will get corresponding report fees.

The process of event prediction and trading on Augur is not required for the average user to hold REP. After the event occurs and the results are queried, the REP holder needs to analyze the event results. If the REP holder feels that the outcome of the event is not clear, he or she can choose to defer the report to the next issue. The reporter has 7 days to report on the outcome of the incident before a final decision is made. During the voting period, some REP holders failed to report or made false reports on the results of the events they investigated. Those who were not clearly investigated and whose content was false, REP, would be reassigned by principal component analysis PCA to holders of frequent and honest reports. Only honest credit holders will receive transaction fees for each vote.

In the process of establishing the forecast Market, there are the following four kinds of fees: Market Creator Fee: Set by the founder, the value of Market Creator Fee is 0%~50%, and most of the founders in the Market set this value at about 1%. Subsequent users who participate in this prediction should pay a fee in this proportion to the founder at the time of settlement. If the founder sets Market Creator Fee too high, no users may be willing to participate in this prediction. Validity Bond: The Validity Bond is used to ensure that the founder establishes an effective forecast market, that is, the correct answer to the forecast market is in the options provided by the founder. If the market is valid, the Validity Bond will be returned to the founder. The Validity Bond uses ETH for payment. No-show Bond: No-show Bond is used to ensure that Designated Repoetor reports within three days after the event ends. The builder can designate himself as Designated Repoetor, and the No-show Bond will be returned to the builder as long as the reporter completes the report within the specified time. No-show Bond uses REP for payment. Ether Gas: Augur is based on Ethereum, the founder of the initial liquidity is equivalent to a bill transaction, need to pay a certain Gas fee. Initial liquidity is not a necessary option, but if the founder provides initial liquidity, it will provide certain reference and help for users to participate in the prediction market in the future.

In the Augur ecosystem, if someone wanted to determine the outcome of something, they had to place a bet using REP. If the person agrees with someone else, the system takes a percentage of the bet proceeds, leaving the principal unchanged. Members can launch 21 "disputes" against the system, and if there are two different versions of the truth, each dispute will automatically create a new Augur fork or copy, but the amount of money wagering on each dispute will also double.

Augur, a decentralized protocol that allows users to create their own prediction markets, is a set of smart contracts that can be deployed to the Ethereum blockchain. Gnosis is a decentralized trading platform based on blockchain that reallocates resources from assets to incentives, information to ideas. PlotX was the first decentralized forecasting protocol to adopt the Automated Market Maker (AMM) model, with all transactions processed on the chain.

Augur makes the prediction market no longer centralized, but a decentralized market that everyone can establish. Through market supervision and smart contract execution, the fairness and absolute execution of the results are guaranteed, and the creator's bond issuing system can guide the market to develop in an efficient direction. However, it takes too long for the market to reach consensus in the reporting process. Even if there is no dispute over the market report result, the minimum time is more than 8 days; if there is dispute, it takes longer, affecting the market efficiency.

Regulatory risks, platform scalability is limited by ethereum network performance.

Augur was the first project to be launched on the Ethereum network and the world's first decentralized prediction market. Team strength is strong, V god as a consultant has been endorsing it. ICO was carried out in August 2015, officially launched in July 2018, and v2 version was released at the end of July 2020. Generally speaking, the project made slow progress, but it still occupied a leading position in the field of prediction market, especially in the "Prediction of the American election" and other projects. The highlight of Augur lies in that it must verify the "predicted results" in a decentralized way and ensure that the "predicted results" are the "factual results" recognized by the market. Therefore, a unique "report facts" mechanism is formed to skillfully realize the function of the predictor. The risk is that performance is subject to the carrying capacity of the Ethereum network and regulatory policy risks for decentralized predictive markets.

Augur, as a leading project in the field of decentralized forecasting, is promising in the long run with the promotion of DEFI boom. However, the short-term prediction market itself does not have enough market heat and popularity. As a prediction protocol, it is subject to market demands such as platform usage and activity of prediction event creation, as well as performance constraints of Ethereum network.