May 29, 2020
Augur — Discord AMA — May 6
On Wednesday, May 6, we had the pleasure to welcome to our Discord Channel:
Tom Haile, Mercenary at Augur Project
We asked him questions about the development of Augur, currently ranked 51 on Coinmarketcap.
Some sentences have been slightly edited for readability but the meaning has been conserved.
Summary
In this AMA, Tom Haile, Mercenary at Augur Project joined the GAINS Discord community to tell us about his project.
Augur is the world’s most accessible, no-limit betting exchange.
Augur is a platform for decentralized predictive markets. Its second version (v2) will be launched on the Ethereum network at the beginning of June.
Augur v2 will introduce new features, including a stable token called DAI, an upgrade of the ERC-20 token and a new mechanism to deal with the risk of invalid markets, not to mention the speed of synchronization to the Ethereum network, which will now be in seconds.
Holders can stake REP and earn revenue from fees.
Introduction
Q — Alexandre R from GAINS: Tom, can you tell us what you did before crypto, how you got into crypto, and if you’ve had any other venture in crypto previous to being involved with Augur?
A — Tom Haile from Augur: Before Crypto, I was a contract developer for an electric car charger provider, building APIs to power mobile apps and for years worked government contracts. I’ve been trading crypto since the middle of 2016. When I was working government contractors and traveling to support that effort. I wanted a change.
In September 2017, I started looking for a real legit Open Source project to contribute to in the crypto space. At this time I’ve been a professional software developer since 2000 and was looking to find something fun not just a job. I saw an interview with Joey Krug and realized Augur is super legit and trying to solve an interesting problem, non-censored prediction markets.
I started volunteering writing code for Augur September 2017, then they brought me on as a contractor and in January 2018 full-time employee. I was fortunate to be part of the Augur Version 1 mainnet launch and currently UI developer lead.
Q — Alexandre R from GAINS: Can you tell us what your role is at Augur and what the project is about in a few simple sentences?
A — Tom Haile from Augur: My official job title is Mercenary, I like working on whatever needs to be done. I’m having loads of fun. Working on Augur I’ve become very interested in DeFi and have been trading on dydx and using Compound and other trading platforms in the crypto space. I was fortunate to give a small UI talk at DeFi Summit in Prague before DevCon 2018 https://youtu.be/C234gKqJw48 and go to DevCon.
I like the Ethereum platform and community. Augur is, simply put, the world’s most accessible, no-limit betting exchange. Some history, it’s the original Ethereum ICO back in 2015, launched mainnet in July 2018. It’s a suite of Ethereum smart contracts and a reference user interface (UI).
Product
Q — Alexandre R from GAINS: You mentioned insurance, do you know if there are companies using Augur as a hedge maybe or for-profit? Is it mainly retailers?
A — Tom Haile from Augur: There are companies that have looked at Augur, none that I know of currently using mainnet. It seems to be users that just want to try out Augur.
We are hoping that version 2 will offer more functionality and conveniences to gain more users
Just a simple thing that traders like to see.
Q — Discord user Pantsme: Do you guys have any integrations with DAOstack in the pipeline? I can see how a prediction market could essentially run a DAO.
A — Tom Haile from Augur: no plans to integrate with DAOstack. We’d like to see more integration with Augur. We’ve had some hackathons like cheese wizards.
Q — Discord user KaranSharma: Can you tell us more about Augur V2?
A — Tom Haile from Augur: A big change: — Trading in DAI: This decreases the volatility of trading, users can concentrate on the market, not the currency volatility they are trading with.
Actually, users won’t need ETH to trade or report.
One major hurdle for Augur version 1 was on-boarding.
We’ve integrated a few easy to use wallets.
Notice that users can log in using Metamask, tor.us, and Fortmatic Portis.
just like web 2.0 websites. login with google or any email address. Also, crypto users will be right at home using Metamask.
Q — Discord user Pi: Will people really be able to use a credit card and trade immediately? Usually very difficult when dealing with crypto.
A — Tom Haile from Augur: Yes, the wallet providers have ways for the user to use a credit card to get DAI.
One of the lessons we’ve learned from version 1 is that not everyone is a trader. So we added a tutorial for that.
It allows users to get familiar with trading and what to expect on the Augur market trading page.
Q — Alexandre R from GAINS: What was the most ridiculous/funny bet title you’ve seen on Augur btw?
A — Tom Haile from Augur: version 1 market with most ridiculous title will the weather be good for the Bastille day military parade in Paris tomorrow. It was disputed 15 rounds, https://themajority.report/market/0x67ef420c045f3561d11ef94b24da7e2010650cc3.
8593.75 REP won the dispute.
That was the most disputed market. Most of the volume was because it is obviously an invalid market. Invalid meaning from Augur terms. There are a lot of reporting guidelines for reporters having to do with reporting a market as Invalid.
Q — Discord user alexp 9339: How many users do you have atm?
A — Tom Haile from Augur: Augur uses a ppl oracle to get real-life events on-chain.
Near Zero users, Augur v1 is basically shut down waiting for version 2 to come out.
We are still on track to release next month.
Q — Alexandre R from GAINS: How many users before the shutdown?
A — Tom Haile from Augur: Version 1 didn’t have too many users. It has turned out to be a successful proof of concept.
A rundown of the success of version 1
Successes: Augur version 1, proved that a complex trading/betting application can be built on Ethereum. It’s safe and reliable. No funds were stolen from contracts. All winners were able to get paid out. Reporters that disputed and won get paid out. We discovered there are many hurdles to make a decentralized application when the user’s expectation is a simple web 2.0 application. There’s a market segment for Augur. These users want an application that has an unlimited trading size, they get paid out if they win, not stiffed, they don’t get kicked off for winning, access from anywhere, so location independent, and they can create their own interesting markets. They can set their own odds. They can be their own house.
At the peak augur version, 1 saw 200 users/day.
Q — Discord user KaranSharma: As it’s written in the whitepaper, Augur will be the world’s first decentralized oracle. What happens if the Attacker attacks the Oracle and succeeds?
A — pg from Augur: If someone were to attack the oracle and spend a bunch of $ buying up REP to try to force a market to resolve in a particular way, the system would fork, creating two worlds.
1) The world where the attacked market resolved as the attackers wanted.
2) The world where the attacked market resolves as the rest of the world sees. In this case, people would migrate to the non-attacked world (we call it a universe) and the attacker’s REP would become worthless.
Q — Alexandre R from GAINS: Would there be legal issues of some kind possibly? I guess that’s the same for every platform but there could be insider betting for example or bets on borderline subjects, right? What if a crazy guy creates a bet that says “Donald Trump (or whatever known figure) will be dead before the end of 2020”?
A — pg from Augur: Legal stuff really depends on the jurisdiction of the users creating / trading on the markets. Similar to all User Generated Content platforms. Interestingly, with Augur the dev team has no ability to censor the markets.
Users will have to observe their local laws and guidelines having to do with betting and trading.
Token
Q — Alexandre R from GAINS: What’s the use case for the token, where would the demand come from (which could then lead to an increase in price)?
A — pg from Augur: Unlike almost every other project, REP’s base price is determined by the estimated future fee value. Users use REP to dispute markets, and the security of the Disputing / Forking system for market resolution is determined by the cost of attacking the oracle.
A — Tom Haile from Augur: Participation tokens can be purchased to get a portion of trading fees. Users can purchase Participation tokens with REP to get a weekly portion of trading fees collected. More fees generated from trading the more fees (in DAI) are available for users that buy participation tokens.
Q — Alexandre R from GAINS: How many devs are working on Augur? What about the team as a whole?
What are Participation tokens?
Historically, do you have an estimate in % of the expected revenue in fees for REP holders?
A — pg from Augur: The team (including design etc) is 13.
Fees: When trading occurs on Augur fees are generated which go into a pool for reporters (people who hold REP) to claim. Participation Tokens are the mechanism where you stake REP in order to claim a portion of the fees.
Can’t speak to historically, but the REP price/security formula will give you a baseline price of rep based on the current Open Interest in the system!
Q — Discord user Pi: Do you just stake rep for participation tokens, or do pay for them with REP?
A — pg from Augur: you lock up REP and get PTs. When you turn in the PTs you get the REP back.
For those interested in the technical game-theory details, here is a link to the V2 whitepaper. https://github.com/AugurProject/whitepaper/blob/master/v2/english/augur-whitepaper-v2.pdf
The Augur Project Whitepaper. Contribute to AugurProject/whitepaper development by creating an account on GitHub.
A — Tom Haile from Augur: Yes REP holders will stake REP and get participation tokens. When the dispute window ends (weekly) the user can redeem the participation tokens to get their REP back plus DAI.
Business Development
Q — Discord user alexp 9339: Will an app be deployed on top of a web app?
In order to target more people as well.
A — Tom Haile from Augur: One of the downfalls of version 1 was a downloaded install. Version 2 will be a web app.
Another issue with version 1 was synching with Ethereum blockchain in hours. Version 2 will sync in seconds because of our werp sync feature.
Just to round off the discussion of version 1, here’s why it had issues. Challenges: Trading in ETH added too much risk to trader’s positions. They had to consider the price fluctuation of ETH and their position in the market. Synching with the blockchain was brutal, sometimes could take hours, and wasn’t reliable, The application had to download Ethereum contract logs. Augur version 1 application was a downloadable install, not what users expect. The User Interface wasn’t intuitive and didn’t have tools traders rely on to get a big picture of their positions or total risk and charts were not good. The color scheme left a lot to be desired. Users had to be familiar with Ethereum and blockchain behavior. Limited wallet choices and those wallets had to be pre-installed. Meta mask, ledger, and Trezor software. There were contract bugs that caused inconveniences. REP no-show bond kept rising and not lowering. Orphan orders, orders could be put on-chain and not taken.
Q — Alexandre R from GAINS: Did you have any audits on the code? It’s a feat to have managed not to get hacked even once tbh
A — pg from Augur: For v1 we had OpenZepplin plus other audits. For v2 we have had multiple audit rounds as well, including two security researchers in our community and OpenZepplin.
Q — Alexandre R from GAINS: How are you doing financially btw? Could you give us a rundown of how much you raised, how much you have left (did you sell ETH right, held?), how much are you burning, do you have revenues (or did you at least when V1 was up?)
Could you also elaborate on the business model?
A — pg from Augur: Forecast Foundation raised money in the initial ICO sale and that has powered the development since then. Without going into the specific numbers (we leave that to the operations guys), we still have plenty of runways left. As for a business model — there is none for the Foundation. We’re lucky enough to exist as open-source developers who get to make this whacky disruptive thing!
For REP holders, however, there is expected revenue from Fees. This expected revenue sets of the base price for REP and that is used to secure the system. You can read the whitepaper for a lot of information on how REP price vs Oracle security is linked.
A — Tom Haile from Augur: Business model: We are open source software engineers that are working on Augur to service market segment that isn’t serviced. Users that want unlimited betting size. Want to trade/bet from anywhere in the world at any time. We do not interact with mainnet contracts. We don’t create markets or trade.
Version 2 will trade in DAI only.
Q — Discord user alexp 9339: Adoption is slower than experts called for. Same with crypto. Do you have a clear roadmap to have adoption?
A — pg from Augur: As for adoption. Our goal with V2 is to make Augur appeal to people who want to Trade and Bet, instead of appealing to crypto users specifically. In terms of trading/betting there’s huge worldwide demand, so making sure the product that people interact with meets their needs is the primary focus of the dev team.
Thanks a lot, Tom and pg for coming in today. It was very cool to learn more about Augur. Looking forward to the V2 in the next month! Keep us posted
Alexandre R from GAINS
For more information, we have a very active community.
Main site: https://www.augur.net/
Discord: https://discord.com/invite/cX8tcCyThanks for having us, lots of fun. I much appreciate you all time.
Tom Haile from Augur
Thanks! We’ll post some updates Currently we’re on track for May 15th deadline for v2.0-rc2, I will mention any changes here!
pg from Augur
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