Augur allows you to interact or “bet” on predictions about real future events.
According to the Augur White Paper, each event is divided into 4 phases.
BEFORE START: To complete the following tutorial, you need to know how to use the Metamask plugin. To do this, we invite you to review the Metamask tutorial beforehand.
Augur is a project that allows you to interact or “bet” on predictions in actual future events, all thanks to its market prediction platform. This platform works in a completely decentralized way, since the holders of the REP token (Augur’s own) are responsible for determining the actual outcome of the event.
According to him The White Paper In Augur, every event is divided into 4 stages: market making, trading, reporting and finally, settlement. Let’s see below what each of the stages consists of.
Creating a market
Any user can create an event; To create it, you will be asked to pay in ETH, as this way you will be forced to create real events without ambiguous results. Once the market is settled, the amount will be returned to the creator. You must also define a designated reporter, who will be in charge of reporting on the outcome of the event and will have 3 days to do so. In the event that a certain reporter does not report the event, the market maker will lose the creation commission, forcing him to choose a trusted reporter or himself.
Trading is perhaps one of the most confusing parts of Augur’s predictive markets. Once the market is created, stock exchange will be available. So, if we want to “bet” on an event, we have to choose one of the available positions and buy participation in it. In case of winning the event, the compensation will depend on the number of shares purchased.
Shares can be exchanged, that is, we can speculate with the shares we own on a certain event until the liquidation comes. This explanation can be a bit confusing, but we’ll see how it works later.
When the event date is met, it will enter the reporting phase, and this will involve either a designated reporter, or failing that, REP token holders who will be able to stack their tokens in the option they see fit. In the event that they place their REP on the option that has the lowest number of community votes, their REP will be distributed among all journalists participating in that event. This period can last from 3 days to 60 days, in case there is an event fork.
Once the outcome of the event has been successfully reported and the winning side has been determined, the event will be settled. At this stage, the funds from the losing side will be distributed to the winning side, according to their participation in the event.
With that clear, let’s begin!
Downloading and installing the Augur application
We have two options for using Augur. The first option is from red de proofs de Ethereum, Rinkeby, where we will only have to change the network of our Metamask wallet to be able to use it. It should be noted that we should not download anything on this test network. Another option is to download the Augur app, which will allow us to connect to a node on the Ethereum mainnet. To begin with, let’s go to Augur portal and we will choose Get started.
Augur main portal. Screenshot taken in
After that, we will meet in the Github repository of the project. Once here, we will download the installation package depending on our operating system.
Augur Repository Platform. Screenshot taken in
When the download is finished, we execute the file, wait for the installation to finish and that’s it, we will have our application installed. To connect to an Ethereum node, we’ll open our application.
We will use the Infura service to connect to the node. Screenshot taken in the Augur app.
When it opens, this is the first thing we’ll see. From here we can connect to a node on the Ethereum network. We can connect either to a node on the main network or to any other node on the test network. Likewise, we have the ability to connect locally, in case we have the entire Ethereum network taken over. To begin with, in the box above Select Configuration We will choose which network we want to connect to, in our case it is the main network. At the bottom, by default, When we connect, we will use the Infura service, a provider that powers Ethereum nodes and makes them available to users. Once all that is clear, we will choose the option below Get connectedin order for Augur to start syncing with the Ethereum mainnet node.
Screenshot taken in the Augur app.
Once we choose To connect The previous window will appear. There we have to wait for the Augur network to synchronize with the node. In the upper right part we will see remaining blocks (remaining blocks) and current blocks (current). When the remaining blocks are equal to 0, the option will be enabled. Open the Augur app which will allow us to run our application.
Augur Network Home Window.
Once launched, a new tab will open in our default browser, which is running the Augur app. If we look at the link, we will see that it works locally, so in order not to lose the connection, we must keep open the application that we opened at the beginning.
Sync Metamask with Augura
Before we go on the tour of Augur, we will sync our Metamask wallet with the network. For this we will choose na Account in the side menu.
In order to interact with the platform, we need to link our wallet. A screenshot of the Augur interface.
Here, before the selection Connect to Metamask We must have an unlocked wallet. Once it’s unlocked, we choose to connect it and that’s it. When we sync we will see more options in the side menu.
A screenshot of the Augur interface.
Let’s do a little research on Augur before we start betting. On the left side we have a menu. The options are separated as follows:
- Markets or marketplace: are open markets created by other users where we can interact.
- Create or create: is an option that allows us to create a new market offer. Please note that we will need funds for this, as we explained at the beginning.
- Portfolio or portfolio: here we will see all purchased positions in the markets.
- Reporting: is a section where, if you are a REP token holder, you can participate as a reporter in events open for reporting.
In the central part, we will have the main categories with the most created proposals. To select them, we just click on them.
At the top we will find the following options: on the left side our balance in ETH is shown, and next to it, our balance in REP tokens. On the right side we will find the monthly and daily movement of our balance and at the end, there will be a notification bell.
Enter Augur’s prediction markets
Before we start, we need to take into account that we need to have a balance in ETH in order to buy stocks about the market. So, when we have available balance, we can participate; To do this, we must first select an option Market.
On the other hand, we need to understand what they are stocks; This tells us the size of our money throughout the event. Simply put, it’s like buying stock in a company. Depending on the amount of our participation and their costs, the result of our profit will be higher or lower in case of victory.
List of open markets where we can communicate on Augur.
In this section we can see the markets, whether they are open or still tradable. On the left side we will see the categories. In the central part we will see every market.
Let’s learn a little about the information that the app shows us about the markets. First of all, we have the premise or what is being played in this market. In the previous picture we have an example of an event; The question in this market is whether the price of ETH will exceed $500 at the end of 2018.
At the bottom we have the percentage of questions. Such market questions can be of 3 types: dichotomous (showing only two answer options: yes or no), multiple choice or numeric range. The example shown here is for a dichotomous question, so we can clearly see how the percentage is distributed over the choice.
At the bottom we have the total volume of participation in this market, commissions charged by the market maker and the expiration date of the offer. Finally, we have a button Shop which will allow us to enter the stock market of this market.
Market charts and order book on augur. Screenshot of the Augur app.
When we enter the market, we can see the details of the exchange. Recall that to enter this betting market, we must buy a position, depending on the type of entry, whether it is a dichotomous selection, a multiple selection or a numerical range. So if you are already used to using cryptocurrency exchanges, this will look very similar to you.
What we see in the previous image are the exchange charts, market depth and finally, the order book. Now, if we are going to buy a position on the premise, such participation must be bought as if it were an exchange in a cryptocurrency exchange.
According to the Augur White Paper, users can buy or sell shares in a bet, and if you already own shares and want to sell them, your sale will be matched with new listings.
Something different happens with entries where we can only choose yes or no.
Single exit markets. Screenshot of the Augur app.
As you can see the only result (Outcomes) is if” (yes). But what about those who want to opt out? In that case, to enter this market, they have to sell shares, which would be the same as countering the affirmative option. Be careful with this, it only applies to dichotomous choices. For multiple selections, we have to buy shares depending on the selected option.
To enter the market It’s very simple, we just have to choose Buy and consider the result side (Outcomes) that we have chosen.
Market with a large number of possible results on Augur.
As you can see in the example in the previous image, we can choose different results to interact with. We can buy shares of each of them.
Before we start buying stocks, we need to consider the following aspects:
- Outcome: the result chosen to buy shares.
- Quantity: the number of shares we want to buy, we can buy parts of them.
- Limit price: it is the limit price for which we are willing to pay. Orders can never be executed at a price higher than this in the case of a purchase, but at a lower price.
- Estimated Cost: is the estimated cost to pay.
After completing the options relevant to the order, we will select Overview, where the details of the order we want to create will be displayed. Finally, we confirm the purchase and the order will be shipped immediately; After that we need to confirm the transaction in our Metamask wallet. Once the order is confirmed, the shares will be available in our portfolio.
Bought positions on Augur.
In this section, we can see all our open positions and the markets we participate in.
Let’s remember something. We can see open or closed positions. The fact that the position is open, in the case of a purchase, means that the position is not yet matched, but it does not mean that we are not participating in the market.
Market creation on Augur
Now it’s time to learn how to create a market on Augur. For them we will go to the side menu option To create.
Beginning of market creation
To begin with, in the section A market question, we will ask our market premise, that is, the question that will identify the prediction we want to create. Later we will assign a category and two tags, which can be set freely, but to give our market more organization and visualization, it is better to give it logical tags. For example: if we want to ask what the price of a cryptocurrency will be at the end of the year, it would be convenient to set “Cryptocurrency” as the category and labels such as “coin” and the acronym of the cryptocurrency.
To continue, we choose Next: Outcome.
Choose what the selection of possible market results will be in Augur.
In this step we will select the type of output we want to create. Either dichotomous (yes or no), multiple choice or numeric range. In our case, we will choose the first option.
After that we can add, in the case of dichotomous options, some additional details. In the case of multiple choice, we need to describe the different outcomes of our market. Finally, in the case of choosing a number range, we must choose the minimum value, maximum value, denomination and precision or number of decimals that we want to handle.
A screenshot of the Augur interface.
The next step is to define the form, the reporter of the results and the final time of the event. First of all we will choose where the event will be set. The first option refers to whether the event will be defined by the media or whether the event will be defined on a public website. In our case, we will define that it will be through a public web portal and post a link to it.
On the other hand, we have a designated reporter. As we explained at the beginning, if we designate someone else, we must be careful because if 3 days pass after the end of the event, the status of the report becomes a public report, and we as creators lose the deposit for creating this event. We can also choose to be the reporter of our events ourselves, but we must remember that we will need REP tokens to be able to make a report.
In the section below, we will define the final date and time when the event will occur or is expected to occur.
Create an initial offer to provide liquidity to the market on augur.
Now is the time for market liquidity. In this first purchase or sale of shares, we will provide initial liquidity to the market; The more liquidity we enter, the greater the attraction for other users to enter this market we are creating.
At the top we will see an option Market making fee or market maker commission. This will be the commission paid by each user who tries to buy shares in each purchase transaction they make.
Last review before creating a market in Augur.
Finally, let’s look at our offer on the market. As you can see, we will not only need ETH to create the market, but also REP. When we have enough funds, we will click on Submitwe confirm the transaction with Metamask and that’s it, we’ve created our first market.
Market reporting in Augur
One of the main pillars of Augur is the prediction of events in a democratic way, that is, it is the community itself that confirms what the result of a certain event is, and in case it is reported incorrectly, the stacked REPs for the said report will be lost and will be distributed among to the journalists who got it right.
On the other side, In order to generate the report, it will be necessary to have REP, the original Augur token, in our Metamask wallet. To make reports, we go to the section Reporting in the sidebar.
Augur market report section.
As you can see, assigned reports, which will appear at the top, or open reports will be available in this section. The latter are reports where a particular user has not made a report or, in other cases, when the market is in a dispute phase. For open reports, REP holders can report events within 7 days after the 3-day period for which the designated reporter can do so.
To report, we just have to select the event and click on Report.
Now in the reporting section, we will select which option occurred in the event. In this case we have two options (yes and no) and a third additional one. The latter serves to indicate fictitious markets or ambiguous results.
The Augur platform is a fairly new platform for the betting market or predictive markets as they call it. One of the most interesting parts is the fact that market creation is completely open, that is, we can set everything from basic things like who will win the World Cup final, to things that are a little more controversial, so Augur is for everyone. .
Despite being a platform with a development period of 2 years, Augur has some annoying details. One of these details is the fact that the client we run on our computer to sync with the node tends to close without warning. On the other hand, we have the fact that sometimes, when doing a transaction involving our Metamask wallet, we get more than one transaction confirmation, something a little strange, because we are doing one transaction.
Without further ado, we now invite you to try out the predictive markets experience at Augur.
You can watch the video tutorial on our YouTube channel:
Outstanding picture por Aleksey Ivanov / stock.adobe.com