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

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,

3/ They rely on the collective wisdom and info of a group, and allow participants to place bets on the probability of specific outcomes, where the value of a bet directly reflects the probability of an outcome occurring.

— Arianna Simpson (@AriannaSimpson) May 23, 2019

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.

15/ REP plays a central role in Augur’s operations, but is not used to trade in its markets. After the event on which a market is based has occurred, the outcome is determined by Augur’s oracle and traders can close out their positions and collect their payouts.

— Arianna Simpson (@AriannaSimpson) May 23, 2019

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.

19/ One of the toughest issues facing PMs is their murky legal situation: some jurisdictions consider it gambling, while others view is as options trading.

— Arianna Simpson (@AriannaSimpson) May 23, 2019

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.

The post Augur [REP]: Decentralized prediction markets are going to be much tougher to shut down appeared first on AMBCrypto.

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