A Decentralized Oracle & Prediction Market Platform

Augur is highly touted project in the cryptocurrency industry. With its launch date approaching, we decided to take a closer look at how the platform actually works. At it’s core Augur is a prediction market built on top of the Ethereum Blockchain.

The platform runs on reputation tokens (REP), decentralized reporting of event outcomes, and this is where REP comes into play. An event occurs that is being wagered on in the Augur Network. Results are reported by REP holders to the network. Upon completion of the reporting period consensus must be achieved on these results before payouts are made to the corresponding parties. Active users that have earned a good reputation for reporting correct results receive trading fees proportionate with REP holdings incentivizing holders and users of the network. Bad actors who report incorrect results lose REP which is redistributed to honest reporters.

Check out this infographic for examples of the process.

infographic from Jonathan Willems, follow him on twitter here

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