CoinDesk recently described Augur– an Ethereum-based prediction marketplace where participants can place wagers on literally anything– as “a hilarious place to troll.”
While it is true that many of Augur’s markets have been created by people with quirky sensibilities, the deeper crevices of the platform are the stuff of nightmares. Augur’s darkest markets let its anonymous users place wagers on topics ranging from celebrity deaths to viral outbreaks to mass shooting statistics.
What Is a Prediction Marketplace?
The recorded history of prediction marketplaces– financial exchanges with a focus on political elections and other real-life events– dates all the way back to the Renaissance era.
When Italian merchants were placing bets on who would become the next pope in the 16h century, these types of wagers were already considered to be an “old practice.” These types of markets were present in 18th century Britain– and in the colonial-era United States as well. Prediction marketplaces continued to thrive in the west until WWII, when scandals, ensuing government-led crackdowns and the legalization of horse betting changed the shape of the gambling world.
Prediction markets hit the web
The internet brought the prediction marketplace industry back to life in the 90s. One of the earliest pioneers in this era was HedgeStreet– an internet-based prediction marketplace that’s now known as Nadex. A celebrity-focused prediction marketplace called Hollywood Stock Exchange was another major player. In 2007, Hollywood Stock Exchange users correctly predicted 32 of the 39 major-category Oscar nominees and seven out of eight top-category winners.
The rise of blockchain-based prediction markets
Crypto prediction marketplaces that utilize blockchain technology are different from the predecessors because they are totally decentralized. In other words, they derive their computing power from swarms of ordinary computers working in tandem. This feature distinguishes them from Nadex, Hollywood Stock Exchange and other similar centralized platforms. With blockchain-based prediction markets, there is no single entity or group of people the authorities can arrest if things take a turn for the chaotic.
Here Comes Augur
Augur was one of the very first blockchain-based prediction marketplaces to hit the internet. Its developers describe Augur as a “trustless, decentralized oracle and platform for prediction markets.”
Unlike today’s most popular prediction sites, all transactions that occur in Augur’s marketplace are transparent and verifiable on the Ethereum blockchain. This makes Augur more resistant to corrosive influences– and it is the main reason why its developers describe it as a trustless system.
Like many decentralized applications, Augur essentially manages itself. Augur’s software-based internal checks and balances eliminate the need for human oversight. In fact, the market’s developers felt confident enough in Augur’s ability to maintain itself that it destroyed its kill switch four months ago.
The flip side of Augur’s hydra-like, decentralized nature is that there are no restrictions on creating bets on natural disasters, terror attacks and other unsavory topics.
Another notable aspect of Augur is that it’s totally open source. That means that any developer with the necessary know how could fork it and create an even wilder version overnight. An in-the-works project called NewAugur suggests that a modified version of the platform may be in development.
How does Augur work?
Though Augur’s underlying blockchain infrastructure is innovative, its actual interface is actually quite simple and text-based.
The Augur marketplace revolves around the exchange of Auger’s Ethereum token, REP (short for “Reputation”). REP can be exchanged for other cryptos through MetaMask and a number of other supported crypto wallets.
The main way to earn REP is by guessing correct event outcomes. Those who forecast an outcome correctly win REP tokens. Those who choose the wrong outcome, lose.
Another way to earn REP is by providing relevant information about the events that other users are gambling on. These information providers are called reporters. Augur reporters that provide the correct answers earn REP rewards. Those that provide incorrect answers, don’t.
Generally, Augur has the same use cases as traditional prediction markets. Here are the two main ones.
- Predicting future outcomes. An economic theory known as the efficient-market hypothesis (EMH) posits that prediction markets are the most effective way of aggregating disparate pieces of information dispersed among individuals within a society. In other words, if many highly informed people invest in a particular outcome, they might in fact be onto something. The highly accurate Hollywood Stock Exchange marketplace is a real world example of EMH.
- Hedging against negative possibilities. Prediction markets can also act as a kind of insurance against negative events. For example, if you own a business that could be negatively affected by a trade war between China and the US, you could hedge against that outcome by putting money on it. If a trade war does in fact come to pass, your business may suffer– but your winnings might help you weather the storm.
The Murkiest Bets in the Augur Marketplace
The most fascinating thing about Augur is that it’s almost totally unmoderated. Anyone, anywhere in the world can post any type of bet on anything.
Despite that lack of supervision, most of Augur’s markets are surprisingly mundane. The majority of Augur users bet on things like the price of bitcoin being at a certain level after a certain period of time, or whether or not Donald Trump will use the term HODL on Twitter.
On the other hand, creepy wagers do exist– and there appears to be no system for identifying or flagging them. As a result, Augur’s dark listings appear right alongside the typical ones in search results.
Celebrity death markets
The Augur market that has attracted the most media attention is the one about whether or not Donald Trump will “be killed at any point during 2018.” But that listing is just one of several involving the death of a famous person. If you type in “die” into Augur’s search bar, you’ll get around 20 results.
Mass shootings, wars, terrorism and natural disasters
Another disturbing set of Augur markets are those involving violent events. Some of these listings are peppered with various attention-grabbing emoticons. Here are a few examples.
The Augur listing depicted below explicitly encourages anyone with the ability to do so to try to “catfish” Trump into cheating on his wife. Other similar postings invite Augur users to bet on a Trump administration collapse.
Does God exist? Will Augur exist next year? Any Augur user can place bets on whatever outcome they think is most likely to happen.
Unhinged and off-kilter
Some Augur postings are disturbing, but a select few are completely insane. Here are a few of the strangest Augur markets on the platform.
Sex, scandals and relationships
These Augur markets explore the mystery of human attraction.
Traversing the uncanny valley
Most of Augur’s science-related markets aren’t dark, but these are somewhat creepy.
If you’re alarmed by the weird side of Augur, don’t be. There’s no reason for concern– not yet, at least. Right now, Augur is still extremely niche. Only a handful of people are currently using it on a regular basis. In fact, in the last 24 hours, only 41 people have logged onto Augur according to DappRadar. What’s more, out of the only 700 markets on the entire Augur network that exist now, only a small portion of them are odd in any way.
Because Augur is still so new, it’s impossible what will become of it. Perhaps it will fade away as time goes on. But given the history of technological progress, that seems like an unlikely scenario. Perhaps one day, platforms like Augur will make existing prediction markets obsolete. The major centralized prediction markets process a million trades or more each month. If Augur ever achieved anything close to that kind of volume, it may begin to affect the outcomes of the events that it attempts to predict.