Is Augur (REP) A Good Investment? In-depth Analysis and Near to Longer-Term Expectations

Is Augur (REP) A Good Investment? In-depth Analysis and Near to Longer-Term Expectations

By CryptoBoomer | Investments | 10 Feb 2020


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The gambling and sports betting markets are on the rise, and it is predicted that they will continue to rise. Many dApps (decentralized applications) built on top of Ethereum, EOS, or Tron or other blockchain platforms are also targeting the same market. It looks like everybody is trying to get a piece of cake in the gambling industry.

One of those dApps that try to get some shares of the gambling industry is Augur. What is Augur, exactly? Well, it is a prediction market platform where users can try to make money with their predictions on anything. Yes, you can bet on politics, finance, sports, or anything you can think of on Augur. 

So, what are the odds Augur will be successful? And is it worth it to invest your money in Augur’s native cryptocurrency REP? Let’s find out together!

Augur - Summary

Basically, Augur is a decentralized prediction market ecosystem which has already launched its mainnet on Ethereum. Augur brings the blockchain to the online prediction and gambling world. It is believed that there are a lot of advantages when a prediction market uses blockchain because of the censorship-resistant nature of the blockchain.

Augur claims it is superior to the centralized online prediction markets because Augur is non-custodial, has very low fees, and it is free for everybody to participate. It’s non-custodial because it’s decentralized, and everything is done directly on the blockchain, which means that no centralized entity has control of the user accounts.

And because everything is done directly on the blockchain, no entity will get any cut from the user bets. The fees that users need to pay are just the fees for the reporters and market creators. By removing unnecessary middle man, Augur has a big advantage over its centralized competitors.

Another advantage of Augur is its permissionless nature, which allows every individual in the world to participate and able to create his own markets. This is a serious advantage as many centralized online prediction markets are not very open to customers all over the world.

Augur works with three different primary steps. The first step is called creating market, the second one is called trading event shares, and the last one is about reporting event outcomes. As I have written above, anyone can participate in Augur. So, if you want to create your own market on a topic that you like (i.e. politics), you can easily do it with the first step.

Then, the second step, trading event shares, involves the “bet” itself. Every individual is allowed to participate, and they can buy or sell event shares depends on their own prediction. As for the third step, reporting event outcomes, you need to stake REP tokens before you can report the outcome of various markets.

Overall, the idea of utilizing the blockchain is quite interesting, although it also sounds a bit complex for most people who are used with standard/centralized online prediction markets.

Analyzing Augur Team

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The co-founders of Augur

Of course, when it comes to crypto investment, we need to analyze the core team behind the same project. When you want to put your money in a specific crypto token, it means that you also believe the same cryptocurrency will have more audience in the future. And who can make it come true if not the team itself?

So, how about the Augur team? Apparently, the official website doesn’t have any dedicated “About Us” page, but I am able to find out more about their co-founders and main figures through LinkedIn and IcoBench

One of the co-founders is Jack Peterson, PhD. Jack also served as the Technical Lead at Augur before he decided to quit in September 2018. Prior to his time on Augur, Jack was the Lead Developer at Dyffy. From his LinkedIn page, apparently, he’s now focusing his efforts as Scientist at INDY Labs.

The other co-founder is Joey Krug, who also claims that he is the Core Developer at Augur. If you look at his LinkedIn portfolio, Joey is also involved with various other projects. He is the Co-Chief Investment Officer at Pantera Capital, the Co-Founder at Forecast Foundation, and also the Co-Founder at Eco. 

All of Joey’s companies are crypto-related. Pantera Capital is a crypto-focused asset management platform. Eco is an altcoin with a dynamic monetary policy. Last but not least, Forecast Foundation, it is directly related to Augur development.   

And then, we have Alex Chapman, who is the current Tech Lead of Augur. He claims that he’s mainly involved with Solidity (Ethereum smart contract programming language) and Augur core back end. His background before Augur is pretty impressive. 

He used to be the Senior Software Engineer at Blizzard Entertainment, and he was also the Software Engineer at Riot Games. For your information, both Blizzard Entertainment and Riot Games are huge corporations in the video game industry.

Apart from the two co-founders and the current Tech Lead, we also have Tom Haile, who works as a Software Engineer at Augur since January 2018. He used to be the Software Developer for NRG Evgo (a company that develops API and works with electric vehicle charging station infrastructure). He was also the Software Developer at CyOne (a company that develops web apps with AngularJs and openlayers 3).

Another veteran of Augur is John Danz, who acts as the Full Stack Engineer since April 2016. Previously, John worked at Capturepoint as Web Developer. Capturepoint is a company that specializes in web apps, API, and reporting tools.

Then, we have Peter Hicks, who serves as the Senior DevOps Engineer at Augur since March 2018. He used to be the Director of Operations at Monkey Inferno and the Director of Operations at Bebo, Inc. To those who don’t know, Bebo used to be one of the famous social networking websites before eventually, it lost its market share to the likes of Facebook.

Next, there’s Matt Bullock, who is the Senior Product Designer at Augur since early 2018. His prior experience includes his time with Saga plc and Huge. All of his experiences are related to designing jobs.

There are other names that I don’t list here, but the individuals above already represent the strength of the Augur team. In my opinion, they look solid and capable of bringing Augur to the next level. However, it doesn’t look like any of these individuals have a strong marketing and branding background (which is quite important nowadays). 

The Use Cases Of REP

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Illustration of REP token

So, we have learned about the Augur project and the core team behind it. But, how about the cryptocurrency itself, Reputation (REP)? After all, we are here to analyze whether it’s worth it to invest in REP, right? 

Well, REP has specific use cases in the Augur ecosystem. According to the whitepaper, REP is used by market creators and reporters when they want to file their report on the outcome of Augur markets. The reporters have to stake REP on one of the market’s possible outcomes. 

Augur also redistributes the staked REP tokens to the reporters that reported within the consensus. REP token holders who previously participated in the accurate reporting of the outcome will be able to receive a certain portion of the Augur platform fees.

One key point about REP is that the gamblers themselves do not need to use or own REP in order to participate in the markets. It’s important because many traders or gamblers might not be interested in owning REP; they are just there to trade.

Partnerships

There are some decent names on the list of Augur’s partners. However, most of them are not exactly big names that some Augur supporters hope for. One of the partners is Alchemy, a blockchain startup that provides the infrastructure to help other companies get better user experience.

Due to its partnership with Alchemy, Augur can significantly improve its infrastructure, and it has successfully decreased its users’ complaints by 98%.

Next, Augur has partnered with global design firm IDEO CoLab, where both companies will together explore design principles for dApps, to provide easy-to-use UI for blockchain-based applications.

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Augur-IDEO CoLab partnership tried to revolutionize design principles for dApps

And then, we have Airbitz, who partnered with Augur for security purposes. Yes, Airbitz provides data encryption on the user device before the data goes into the server. Considering Augur is operating in the online prediction market, having a partner that’s specialized in security is quite important.

The more exciting partner is the 0x protocol (ZRX), where it is claimed that Augur v2 (in Q1 2020) will use 0x for low-fees order creations, order cancellations, and modifications.

Potential Roadblocks

While Augur is in the right niche (online prediction markets), and it is doing a good job, but it doesn’t mean Augur has no potential roadblock in its future. In fact, there are plenty of them.

The biggest roadblock for Augur, just like any other dApp out there, is the lack of users. User activities for the majority of Augur markets are very low, and it might not change if Augur refuses to use their budget for marketing and branding efforts. 

Most people outside the crypto trading space don’t really know what’s Augur. And even when it comes to crypto trading space, they rather “gamble” with the value of REP token instead of the prediction markets inside the Augur platform itself.

In my opinion, this will be the biggest obstacle that Augur will face in the upcoming years. Not only that, but there are also Ethereum-based and EOS-based gambling dApps that might be able to challenge Augur if they get bigger.

External Factor And REP Price

We have learned most of the Augur and REP fundamentals. Is it enough to make our decision? Unfortunately, we also need to think of a big external factor that can affect REP price in the future. That one big external factor is called Bitcoin price action.

Yep, since the beginning of cryptocurrencies, Bitcoin price action has been affecting altcoin prices. REP token price won’t be an exception. It will also be affected by Bitcoin upward or downward trends.

So, where will Bitcoin go this year (2020)? Nobody knows for sure but many analysts are pretty optimistic because we will have another Bitcoin mining reward halving event somewhere in the middle of the year. If this year repeats the last halving’s price action (2016), Bitcoin price will go up due to the upward pressures from all the speculative traders.

However, you need to be careful because history doesn’t always repeat itself. It’s possible this year Bitcoin might actually go down due to the lack of demand from new traders. Either way, you need to pay close attention to Bitcoin price as it will affect REP price.

Social Stats

Unfortunately, Augur does not have any official Telegram channel. It’s pretty hard to “compare” user activities on Augur with other altcoin projects, because most other altcoins typically have their own telegram groups. That being said, Augur has its own Reddit channel, Facebook page, and Twitter account

From these three social accounts, it doesn’t look like Augur has active supporters. All of their pages (reddit, facebook, and twitter) look too empty to me.

Conclusion

Augur is an interesting project as it tries to utilize blockchain for different reasons while other altcoins are just trying to create “better Ethereum.” That being said, Augur has its own challenges as it lacks user activities, and it needs to change its marketing efforts to attract traders and users.

REP remains a decent investment if you believe in the potential of Augur, but there are better altcoins with more active community out there.


CryptoBoomer
CryptoBoomer

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