Augur [REP]: Decentralized prediction markets are going to be much tougher to shut down

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Arianna Simpson, the Founder and Managing Director of Autonomous Partners, recently spoke about the prediction market and the cryptocurrency space, with the main focus being Augur Project, on Twitter. The early-stage investor remarked that prediction market was one of the “most fascinating yet poorly understood areas” of Decentralized Finance.

She said,

Simpson further stated that people get involved in buying and trading activities on these markets, where the “value of a contract” differs based on a future outcome. This was followed by Simpson listing three common types of prediction market: binary, categorical, and scalar. She also pointed out that these market existed prior to gaining a lot of traction in the crypto-community, citing the example of Hollywood Stock Exchange [HSX], one of the first digital prediction markets.

In terms of decentralized prediction market, she stated that Augur Project and Gnosis were one of the “few main platforms”, adding that it was the most happening platforms at present. Following this, Simpson gave a brief introduction about Augur, stating that it was a trustless, decentralized prediction market built on Ethereum. She stated that the market has four stages of progression: creation, trading, reporting, and settlement. She added that anyone could create a market based on current events.

Further, the Founder remarked that the predictive market were all centralized before Augur with centralized entity taking care of the key roles such as ledger maintenance, market outcome, and payouts. However, the inception of decentralized network “removes many of the risks of self-interest and corruption.” With Augur, the contracts are “fully automated” and the developers have no control over the outcome and other functions.

She concluded by stating that prediction markets were an “interesting way to tap the wisdom of the crowd”, adding that the decentralized versions were going to be “much tougher” to shut down.

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Priya is a full-time member of the reporting team at AMBCrypto. She is a finance major with one year of writing experience. She has not held any value in Bitcoin or other currencies.

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