The difference between Gnosis and Augur
We are often asked what the difference is between Gnosis and Augur. First of all, this is an indicator of the excellent marketing our friends at Augur have accomplished. However, it also supports our thesis that Augur is not our competitor. Rather, our primary competition is large companies who currently dominate prediction market adjacent applications (sports betting and financial). In effect, Augur has helped to spread the awareness for prediction markets in the blockchain space and we expect this synergistic relationship to continue. Our real competitors include companies Betfair, the biggest sports betting exchange, regular bookmakers like William Hill, Option markets like Nadex, and eventually large portions of Wall Street. Thankfully, there are an incredible variety of unexplored applications such as Futarchy, a prediction market governance tool, and markets on very finely grained company data (revenue, gross profit). In these cases, we are pioneers in unclaimed territory. With regards to tackling huge markets such as sports betting and financial applications, Augur currently looks more like an ally sitting with us together in this relatively small Ethereum universe. That all being said does not mean we are afraid of comparison. Just the opposite is the case — take a look at the comparison table:
Long before Augur even existed we spent a significant amount of time carefully evaluating Paul Sztorc’s “Truthcoin” proposal which Augur has been initially based on. While we are fascinated by decentralized mechanisms and the oracle system of Truthcoin is elegant we are also entrepreneurs and want to build projects that actually work and help people instead of just looking beautiful on paper. The “Truthcoin” paper was an impressive first proposal but not good enough to challenge the existing incumbents. Most people don’t care whether something they use is decentralized or not. It must be decentralized AND cheaper AND more secure AND a better user experience AND more accessible. Then we might have a shot of capturing large markets and creating exciting new ones.
Gnosis is 100% decentralised by having all ether holders as a potential backstop mechanism. This “ultimate oracle” will not be needed in more than 99.9% of cases because specialized oracles will resolve the markets very quickly. Additionally, instead of taking a cut based on the market volume, these oracles will resolve markets for a very small fixed price. Gnosis will be cheaper because it allows a global liquidity pool and it will combine liquidity of related events (will Clinton win in Florida/ will Clinton be president) by smart market mechanisms. Gnosis will have the full security of all funds purely held by contracts without counter party risk. Gnosis apps will have the best user experience by lowering the barrier to entry to create new applications for this global marketplace. Soon, it will be as easy as setting up a Facebook page to set up a Gnosis app. Gnosis will be more accessible because it gives entrepreneurs in 180+ countries and jurisdictions the opportunity to figure out the best legal setup to give people access to the Gnosis market through their app.
As mentioned earlier, right now Augur feels like an ally and we are happy to collaborate. In the long run we expect to see a general tendency in the blockchain world that the most efficient and open platform will naturally aggregate all other solutions and overtake them. We made our choices from the beginning to eventually become that platform and we think that we are on a good path. However — these “decentralized monopolies” will not have the “winner take all” payoff function we see for platforms like Uber and AirBnB today — instead, everyone who helps to grow the platform will benefit.
