Augur was created in 2015 by the Forecast Foundation and is a crowdsourcing protocol for predictions. The project attracted more than 5.5 million dollars by selling REP tokens, long before the ICO boom began. Now, after the publication of a new version of the White Paper of the project, a system that will allow users from all over the world to bet on the outcomes of various events, is about to be launched in a test mode. This is reported by Coindesk .
But, although Augur will allow people to bet on any event (from the outcome of the sporting event, to the dynamics of the financial markets), its creators say that right after the launch of the platform, users will have the opportunity to create only one market.
That’s what the head of the Forecast Foundation Tom Kizar told us:
“In fact, we are going to launch Augur for one purpose:” Will Augur be broken? “Or” Will there be a critical vulnerability in Augur before a certain date? “
This move looks rather risky, but, according to Kizar, the game is worth the candle.
In addition to this rate, the Augur team will launch a program of premium payments for the detection of vulnerabilities in the platform, filling the market with bets on the fact that it will not be hacked. Thus, a confident hacker can play on the opposite side of these rates and will diligently seek out vulnerabilities in the protocol, expecting to break a big jackpot.
“According to the auditors, our project is likely to be the largest and most complex project on Ethereum that anyone tried to launch, and it would be naive to believe that we will be able to run 6,500 lines of code on Solidity without errors,” said Kizar .
In order to give external users enough time to search for potential vulnerabilities, the project team will launch Augur first only in the test mode, which will last approximately three months.
Now Augur is in the second round of auditing smart contracts, and the project team states that the launch will take place within a few months after its completion.
By the time of launch, the platform will allow real people to perform the functions of market “reporters”.
New markets need credible reporters who could determine the outcome of the bet. Most of these reporters are likely to be some sort of bot that will be supported by proven developers (threat assessment by type of Polyswarm ).
At the same time, as stated in the White Paper, the system provides for two levels of challenging decisions in the event that a participant disagrees with the result.
At the most basic level, all Augur participants can express their opinion on a particular market. If the level of disagreement reaches a certain value, Augur will be divided into new “universes” for each possible outcome, and it is at this point in the process of determining the result includes the procedure of crowdsourcing.
An attacker might try to make the wrong decision, but the Forecast Foundation model is built in such a way that it should not be of use to it.
In each case, whenever users are involved in deciding the outcome of an event, they will need to make a security deposit in the REP tokens. Every time they put on the right outcome, they make a profit.
“Among other things, the system changes the cost of REP in one direction or another, thereby regulating the commission of reporters,” says Alex Chapman, lead contract engineer for Augur. – While the cost of REP does not exceed the target level, the commission will increase weekly, and vice versa. “
In the process of working on the project, the team realized that there are limits to the possibility of job distribution. In the beginning, we wanted to make each result determined by the sum of the opinions of market participants. This algorithm is still used as a spare in resolving market conflicts, but the team has come to the conclusion that centralized decision-making with payment of rewards will be more effective.
“Collective (distributed) definition of the result is, in fact, the worst scenario.”
From the experience of launching the first market with bets on whether Augur will be hacked, his team will be able to extract a lot of valuable information and, if necessary, return to code rework.
Then a full-scale commercial launch will be made, which, according to Kizar, will become an extremely important point, both from a technical point of view and from an organizational point of view.
“As soon as Augur is fully launched, from now on we will have no more opportunities to manage it than any other user,” he says.
And although the Forecast Foundation will continue to work on the client part and code, it will not have the opportunity to get participants to use their refinements. From this moment, Augur will belong to the whole world, which is very important, since all previous prediction markets were closed or extremely limited by the authorities.
“If there is a critical vulnerability somewhere, the regulators will try to use it to shut down the entire system,” Kizar says.
We are not going to limit the system or somehow regulate it.
Instead, people will have the opportunity to invest in Augur as many broadcasts as they want.
And according to Chapman:
“In the end, the traders themselves will decide whether or not to trust a platform with a security system based on such assumptions and formulas.”