Re:The story of Augur, an Ethereum prediction market
by DennisP on Wednesday October 17, 2018 @08:19AM
(#18238225)
Actually Augur does attempt to solve the trust problem.
Regarding settlement conditions, there's an allowed outcome of "null," where the judges can decide that the outcome can't be determined. In that case all bettors get their money back.
There's no oracle. Augur's main innovation is its decentralized resolution system. Initially a small number of randomly-chosen REP holders vote on the outcome. That outcome can be disputed, which escalates to a larger number of REP holders.
This goes through several rounds. Disputers have to post bonds to make a dispute, which they lose if the dispute fails.
If they're determined, they can escalate to the ultimate resolution: Augur splits in two, one with each outcome. At this point every REP holder has voted one way or the other, and each holder only gets REP on the version he voted with. The theory is that the version of Augur which reports the truth is the one where REP will have the most value. This gives REP holders an incentive to vote for the true outcome.
I may be wrong on some details, so check their whitepaper for more, but the general idea is to make the incentive strong enough so most REP holders will vote for the truth and disputes will happen rarely, mostly when small groups of REP holders actually get it wrong. Whether it works in the real world, we'll have to see, but I think it's an interesting experiment at least.
Regarding settlement conditions, there's an allowed outcome of "null," where the judges can decide that the outcome can't be determined. In that case all bettors get their money back.
There's no oracle. Augur's main innovation is its decentralized resolution system. Initially a small number of randomly-chosen REP holders vote on the outcome. That outcome can be disputed, which escalates to a larger number of REP holders.
This goes through several rounds. Disputers have to post bonds to make a dispute, which they lose if the dispute fails.
If they're determined, they can escalate to the ultimate resolution: Augur splits in two, one with each outcome. At this point every REP holder has voted one way or the other, and each holder only gets REP on the version he voted with. The theory is that the version of Augur which reports the truth is the one where REP will have the most value. This gives REP holders an incentive to vote for the true outcome.
I may be wrong on some details, so check their whitepaper for more, but the general idea is to make the incentive strong enough so most REP holders will vote for the truth and disputes will happen rarely, mostly when small groups of REP holders actually get it wrong. Whether it works in the real world, we'll have to see, but I think it's an interesting experiment at least.