We just reviewed the key ideas of Augur without going into the theory or the mathematics. Let's look at these ideas to get a picture of the ideal interplay of the Augur application and the blockchain features, the smart contract, immutable ledger, and the oracle. Let's examine how you can participate and what are the roles in the prediction market. There are three main roles or types of participants. You can be a market creator, who places the market event and sets the expected outcomes, pays fees and escrows, and establishes the rules, and designates the initial set of reporters. You can also be a trader, who places the bets on the expected outcomes and takes part in the pre-reporting phase of the process. Traders buy and trade shares that bet on the odds of the outcomes. The trading currency is currently Ether, that of Ethereum blockchain. In the next role, you can be a reporter, who reports on the outcomes. Understand that outcomes do not have to be binary, as we all know. The reporter can be a designated reporter, or an open reporter, based on the phase of the process. The prediction process runs it's course. Do not expect just one round of crowd reports to arrive at a prediction outcome. Most of them may take years by nature of the idea. Outcomes may not be binary. It can be scalar with many possible outcomes. Take a look at the market events posted at this Augur DApp interface. For example, one of the markets is science, and the market event is how many drugs will be approved by FDA in 2018? Range of outcomes is between 0 and 30. Another market is space. The prediction event is will SpaceX land on Mars the end of 2018? Outcome here is binary, YES or NO. We explain the key ideas of Augur Decentralized Prediction Market, then we explain the different roles of the participants. Now, let's get a high level understanding of the process. Some of them may take years by the nature of the idea. A stakeholder creates a marketplace. This results in configuration and deployment of smart contracts on the Ethereum network. Rep tokens are used in this process and Ether for smart contract executions. Trading begins as soon as a prediction event is posted. The designated reporting period begins. After the designated reporting period, a ten-to-two outcome prediction may be available. If not, the first prediction after this is assumed to be the predicted outcome. It can be disputed by the reporters by staking rep tokens. In the worst case, the dispute phase made it result in a fork. Augur protocol has robust methods to address forks and the disputes. Next, the prediction phase ends with a prediction. The event happens. The next phase of reporting begins. At the end of the reporting period, the collective reported outcome is a availble as an oracle. It is accessed by the smart contract to finalize the outcome and settle the trades and fees. Now, let's look at the Augur web interface. You can see various markets from crypto to temperature. This screen also features a market event. Will Augur's live release happen by the end of 2018? At this time, 35% of the reporters believe so. You will know the prediction outcome when you're watching this recording. Can you tell the percentage now? Augur is built on top of Ethereum blockchain. And it is a public network, since it is indeed dependent on the decentralized traders and reporters. The Augur organization will manage the blockchain and provide the access to the markets through its webpage. A user can create a market, post market events, trade, and/or report. The trading token is Ether, and the reporting token is rep. Systems already exist for financial market and sports speculation, so these are not use cases for Ether. It is highly relevant for science experiments, policies, agriculture, insurance, and the like. It is highly relevant to micro and macro level systems in economics. Augur automates the prediction market to a wide range of other use cases and may recognize significant value. Augur provides accessibility to these markets through web user interface and a blockchain ledger so that anyone can participate. It also provides a model for incentivizing good reporting and a participatory economy.
