The decentralised prediction market platform Augur has seen a significant drop-off in actively traded markets over the last few weeks.
Here we will take a deep dive into the data of the 30 biggest markets currently hosted on the Augur platform and look at the differences between the markets that are still actively traded and those that have already ended.
A bit of background on Augur
Augur is a cryptocurrency platform that provides a decentralised predictions market for asset speculation. The platform covers a variety of prediction markets like sports and politics, all the way to ‘time of death’ markets (or assassination markets).
In simple terms, you use the Augur platform to make predictions, using Augur’s native token to power your guesses. If your forecast is correct, you are rewarded. What distinguishes Augur from a traditional betting market is that no centralised single party sits in the middle, meaning that users are likely to pay lower prices (on average).
The REP token acts as the utility token to give liquidity on Augur. It has a market cap of just over $100 million at the time of writing.
In early December 2018, Coin Rivet brought you the story of how Augur appeared to be building some significant momentum.
A look at the top 30 markets today
Using data from the platform tracker on prediction.global, we can see that it lists the “money at stake” at just over $1.7 million. When looking at the top 30 markets, the total is just over $1.5 million.
This figure, however, is a little deceptive after you break down the markets between those that are ‘active’ and those that are already ‘ended’.
The thing that really stands out is the fact that of the top 30 markets, 25 of the markets have already ended. This means that just five markets are actively traded, and they only have a combined amount of funds at stake of just over $30,000.
Large markets have already ended
The markets that have already ended on the platform had a total value at stake of $1.47 million. Just the top two markets made up over $1 million of this total. Those markets were “Which party will control the House after the 2018 US Midterm Election?” and “Will the price of Ethereum exceed $500 by the end of 2018?”
Augur metrics showing ~$2m ‘total money at stake’ include markets that have already ended.
— Alex Sunnarborg (@alexsunnarborg) January 10, 2019
Augur official weekly report not showing the full story
Just yesterday, Augur released their weekly report and stated that their “Open Interest was $2,040,934.63 USD”.
By my definition, I don’t think it’s really correct to classify markets that have already ended as “open interest”. I understand that funds may still be locked in the smart contract and are yet to be fully settled, but issuing reports like this is bending the truth at the very least.
This opinion was also shared by Alex Sunnarborg on Twitter, who said that “if we exclude markets that have ended there is <$100k total money at stake on Augur [platform]”.
Gambling is still one of the fasting growing industries online. If Augur really wants to compete with the big players in this space, then it will need to think a bit harder about how to attract larger liquidity providers onto the platform’s markets.
It’s still early days for Augur, but if the platform wants to justify its $100 million-plus valuation, then it needs to be attracting more than its current 500 weekly active users.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.