Augur markets follow a four-stage progression: creation, trading, reporting, and settlement. Anyone can create a market based on any real-world event. Trading begins immediately after market creation, and all users are free to trade on any market. After the event on which the market is based has occurred, the outcome of the event is determined by Augur’s oracle.
Once the outcome is determined, traders can close out their positions and collect their payouts. Augur has a native token, Reputation (REP). REP is needed by market creators and by reporters when they report on the outcome of markets created on the Augur platform.
Reporters report on a market by staking their REP on one of the market’s possible outcomes. By doing this, the reporter declares that the outcome on which the stake was placed matches the real-world outcome of the market’s underlying event.
The consensus of a market’s reporters is considered the “truth” for the purpose of determining the market’s outcome. If a reporter’s report of a market’s outcome does not match the consensus reached by the other reporters, Augur redistributes the REP staked on the non-consensus outcome by this reporter to the reporters that reported with the consensus.
A trader can close their position in one of two ways: by selling the shares they hold to another trader in exchange for currency, or by settling their shares with the market. Recall that every share comes into existence as part of a complete set when a total of 1 ETH has been escrowed with Augur.6 To get that 1 ETH out of escrow, traders must give Augur either a complete set or, if the market has finalized, a share of the winning outcome. When this exchange happens we say traders are settling with the market contract.
Once a market’s underlying event occurs, the outcome must be determined in order for the market to finalize and begin settlement. Outcomes are determined by Augur’s oracle, which consists of profit-motivated reporters, who simply report the actual, real-world outcome of the event. Anyone who owns REP may participate in the reporting and disputing of outcomes. Reporters whose reports are consistent with consensus are financially rewarded, while those whose reports are not consistent with consensus are financially penalized.
Market participants forecast the outcomes of events by trading shares of those market outcomes. A complete set of shares is a collection of shares that consists of one share of each possible valid outcome of the event . Complete sets are created by Augur’s on-contract matching engine as needed to complete trades. For example, consider a market that has two possible outcomes, A and B. Alice is willing to pay 0.7 ETH for a share of A and Bob is willing to pay 0.3 ETH for a share of B. 5 First, Augur matches these orders and collects a total of 1 ETH from Alice and Bob.6 Then Augur creates a complete set of shares, giving Alice the share of A and Bob the share of B. This is how shares of outcomes come into existence. Once the shares are created, they can be traded freely.
Augur allows anyone to create a market about any upcoming event. The market creator sets the event end time and chooses a designated reporter to report the outcome of the event. The designated reporter does not unilaterally decide the outcome of the market; the community always has an opportunity to dispute and correct the designated reporter’s report. Next, the market creator chooses a resolution source that reporters should use to determine the outcome. The resolution source may simply be “common knowledge”, or it may be a specific source, such as “The United States Department of Energy”, bbc.com, or the address of a particular API endpoint.1 They also set a creator fee, which is the fee paid to the market creator by traders who settle with the market contract (see Section I D for details on fees). Finally, the market creator posts two bonds: the validity bond, and the designated report no-show bond (also referred to as the no-show bond for brevity).
One of the few reputable places to buy REP with credit card is Coinbase Pro.
Coinbase Pro
Coinbase charges 1.49% on all transactions made with a bank account, and 3.99% for debit/credit cards – these expenses will add up quickly, especially if you are trading often.
To start trading with Coinbase Pro, a bank transfer is required. After verifying your bank account, an ACH bank transfer deposit will usually take 3-5 business days, and they are free.
Same day bank wires are also available, but only to Coinbase Pro customers with USD-denominated order books. Wire deposits appear in your Coinbase Pro account on the same day, as long as the order was submitted before the cut-off for that day – usually 2 PM. Note that same day wire transfers will cost you $10 USD in addition to your bank’s fees for wire transfers.
If you’re already a Coinbase account holder, you can transfer funds from your Coinbase account to your Coinbase Pro account, instantly and free of charge.
Since REP is an ERC-20 based token, it can be stored both on the Ledger and Trezor.
Ledger
As for using the Nano Ledger S, the first step towards setting up your device is unboxing you device and checking if you have received all the accessories with the device. Once you have unboxed your device, you need to configure it and initialize it before being able to use it. The process is quite simple and will hardly take about 20-30 minutes post which you will be set to use your Ledger Nano S device. This video does a pretty good job at explaining how the setup works.
Trezor
As for Trezor, installing is really simple. To properly install it users should attach the unit to the computer. After that continue with installing the bridge which allows the Trezor to join with the computer. The first step is to connect the Trezor to device’s USB slot with the cable given in the box. After that, go to myTrezor.com and proceed with installing the browser extension. Trezor can also be used on Android or an iPhone, or on a Windows or Mac computer. Now, initiate the extension and myTrezor will direct you to pick a PIN. After this, you will notice nine buttons but the numbers are hidden. After this, users should check the Trezor’s screen to recognize which numbers are in which place because it switches every time. Now set the PIN. Shortly after, Trezor should present a 24-word wallet “seed”. In short, one word at a time. Note down this seed and save it carefully. If your Trezor device malfunctions or is lost, you can utilize the seed to reconstruct the complete wallet. This video explains how to set up your trezor quite well.
As we already mentioned, REP is based on the Ethereum ERC-20 standard which means that all ERC-20 supporting wallets can house your REP. For an online-based wallet, we recommend MyEtherWallet. The wallet offers a brilliant combination of speed, trustworthiness and simplicity, making it the most popular online wallet for ether and any ERC20-based tokens.
MEW
Simply visit myetherwallet.com and set up your wallet with a method of your choosing, just make sure to store your private key somewhere safe. It's wise to have it written down on paper in case your PC/notebook malfunctions.
The only downside to using an online wallet like MEW is that there are literally hundreds of phishing scams out there to get your eth, so you better double check the address everytime and make sure to watch out for any malicious activity on your browser or PC.
Exodus
First, we have Exodus, which supports a ton of other cryptocurrencies along with REP and is pretty straightforward and easy to use. Just download the app from the official site(exodus.io) and get straight into creating your wallet. Exodus stores your Private Keys on the machine you choose and not on any server, providing you with a relative peace of mind when it comes to the security of your coins.
Atomic Wallet
Another option is Atomic Wallet.
Atomic Wallet is a desktop wallet built with security, anonymity and decentralization in mind.
Atomic Wallet was designed to leverage the potential of atomic swaps and become part of a fully-fledged decentralized cryptocurrency ecosystem.
The “physical” wallet itself is a PC application that can be downloaded onto your computer. Your private keys and other data will then be stored on your PC in an encrypted form.
This means you hold your own keys, which are encrypted and kept only on your own device, control your own funds and can efficiently swap tokens without needing to go through a centralized exchange.
This application then interacts with the blockchains of supported coins. For example, if you check your transaction history in the program, it looks it up on the blockchain and then shows it to you, rather than storing this potentially sensitive information somewhere.
