Augur Version 2 was released on July 28, 2020, according to the Forecast Foundation.
First launched in 2015, Augur was one of the ICOs and Ethereum applications that attracted attention to the blockchain betting market. And now v2 has all the added features of the Defi market today, including Interplanetary File System (IPFS), 0x Mesh, MakerDAO’s Dai, and Uniswap’s v2 oracle.
The first version was notorious for being cumbersome, slow, and often unusable despite its well-known presence in the cryptocurrency community. Initially, Augur was based on statistician Paul Sztorc’s Truthcoin, a prediction protocol built on the Bitcoin blockchain. (Sztorc has no association with the project, according to a 2015 blog).
A second version has been in the works since the first project, according to its two founders, Jack Peterson and Joey Krug.
“The first version of Augur will probably be a bit slow and a bit expensive, but it will certainly be a beautiful look at what’s to come,” the team wrote on Medium in 2017.
And, just as Eth 2.0 has faced unprecedented delays, so has Augur v2. However, with all that time, the team has added a series of Ethereum projects to its betting platform.
Augur is an oracle. Oracles bring off-chain data to on-chain.
Although the second part of the above sentence only has a few words, it is much more difficult to do. The main difference is that on-chain data is objective while off-chain data is subjective.
When you send a Bitcoin transaction, you press a button and the network records it. There’s not much to argue about. On the other hand, off-chain data is the world of CNN, Fox News and Facebook. We don’t know what the truth is – we only have reports of what happened.
At its core, that’s what Augur (and its predecessor Truthcoin) try to do through fancy tokenomics: turn real-world events into newsworthy events on blockchains. It also does what oracle networks like Chainlink and Band Protocol try to do.
To be successful it requires systems that encourage users not to enter incorrect information and also agree on an interpretation of an event. The scale of implementation is still a question.
Augur has three different types of bets: Yes/No markets, graded markets with up to eight choices, and scalar markets between 0 and 100, said Tom Kysar, director of operations at Augur’s Forecast Foundation.
Previously, Augur v1 allowed certain markets to be declared “invalid”, if the outcome of an event could not be accurately diagnosed, it led to many bets being declined.
Augur v2 will expand on this logic by allowing Betters to bet on an additional option for all markets: void. An invalid market betting option helps demonstrate with money that the player thinks the bet is poorly constructed, Kysar said.
Another benefit of v2 is processing time. Augur’s v1 market takes seven days. Now, it has been cut to between 48 and 72 hours assuming the market is not contested.
Augur has no servers, according to a blog released Monday. Augur doesn’t bypass modern computers – a byte has to be stored somewhere. However, Augur has integrated the Interplanetary File System (IPFS) for decentralized client storage.
Kysar said Augur will also release its software for replication on other Web 3.0 projects, such as Ethereum Name Services (ENS).
Augur v2 is also data heavy, which is not good for the main platform Ethereum which is currently seeing historic demand.
In Ethereum, decentralized applications (dapps) are hosted on what are called smart contracts. Smart contracts perform actions when paid to do so in ETH.
However, not all contracts are created equal. Augur requires these contracts to carry a lot of data, sometimes called “bloat.” Data-heavy contracts weigh down the network.
Recently, Ethereum developers have become concerned by the growth of Ethereum status, which holds pieces of data to carry out transactions. Following the team’s approval, Augur will only add to the current Ethereum state, which has become a bigger problem for the base layer:
Augur V2 contracts tend to store more user-related data than many other similar contracts. For example, profit and loss data as well as market metadata are stored on-chain. While this means transactions become a bit more expensive, it allows applications like the Augur V2 client to make fewer network requests and instantly retrieve the relevant data.
Augur will launch without an admin key, unlike a few other dapps that have received criticism in the past.
The admin key provides online support for online contracts to govern live projects. Some Ethereum projects have been called for allowing developers to keep these keys after project launch or not disclosing the information. For example, Tornado Cash Rush v1 admin keys cannot be destroyed until after the May v2 contract update.
Augur’s REP token is also undergoing many changes. REPv2 will have new logic introduced that the old token did not have.
Augur raised $5.3 million in an August 2017 ICO for the REP token under the umbrella of the Forecast Foundation, according to Messari. An ERC-20 form, REP is the governance token that runs on the platform, “used to report and dispute the outcomes of events.”
The old REP cannot work with the new v2 contract, Kysar said, meaning new tokens must be produced. The Forecast Foundation has issued guidelines for swapping new REPs with old ones that “will eventually require migration to REP v2 following Augur v2 deployment.”
Augur is one of the first dapps to integrate 0x Mesh, an on-chain relay order book system for betting.
On-chain refers to the way 0x chooses to set up their order book: It pings the main Ethereum network whenever a transaction needs to be made, as opposed to off-chain order books that have ping package. Each side has advantages that are not worth addressing here (although off-chain orders have grown in popularity recently due to gas costs).
The relay speeds up transactions on the Ethereum blockchain which is known to be slow and inefficient.
This inefficiency is a feature of the way blockchains are arranged: as peer-to-peer (P2P) connections. If you are thinking of settling a trade or placing a bet, you may want it to happen quickly, which does not work well in a transaction whisper network instead of taking them directly from the trader to place the order.
Relays establish a cluster of nodes that make transactions (bets) in order to place orders faster.
“0x orders are simply cryptographic messages that can be passed, e.g. forwarded,” said 0x spokesperson Matt Taylor.
Augur now has a stable, dollar-value betting vehicle that mimics Dai. Traditionally, Augur has used ether, but in October 2018, a Dai integration was made.
Why? ETH price fluctuations are not good for betting. For example, ETH started July at around $230 and has now surpassed $320 in the past few days. A long-term betting platform cannot use a native unit like ETH and expect people to stick around; Imagine betting on an election only to see the value of your bet spike or plummet.
Not to mention, a decentralized stablecoin is a boon for any betting protocol to have legitimacy. Veil, a betting platform built on top of Augur, shut down in July 2019 due to regulatory concerns.
And, Augur will use Uniswap as a price oracle service. All decentralized applications need to have prices for them from one data feed, like Bloomberg Terminal. That is one Ethereum function that Uniswap “Lego money” can provide.
Uniswap is an automated market maker (AMM), which means it combines tokens together for trading and listing in a decentralized manner using only the basic logic of the application itself. If someone wants to list a token, like the new REPv2, they pay a fee and float the token on the protocol. Anyone can buy new tokens or create token pools with trading pairs on Uniswap.
For example, you can spin a DAI/REP trading pair to buy REP with DAI or vice versa.
These groups generate information for trading, especially price data. In theory, a highly liquid pool can be relied upon to provide a good base rate of tokens compared to other tokens like ETH. So you can find out the price of REP based on how much ETH you can earn from a pool.