The co-founder of Augur has revealed his motivation for creating one of the world’s biggest decentralised betting platforms.
In a podcast with crypto-influencer Anthony Pompliano, Jeremy Gardner, who is also a prominent Venture Capitalist, spoke about how the project came to be.
What is Augur?
Augur is a prediction market based on the Ethereum blockchain. It allows for the creation of “betting markets”. Users can then utilise these markets to bet on the possibility of certain events occurring.
For example, users can utilise Augur to hedge against events such as natural disasters, by betting on them happening. This will ensure a payout to the user in case the event does occur.
The platform has a variety of other applications, from crowdsourcing information about the weather to gauging market sentiment on a new product.
Gardner says he created Augur after his own experiences predicting events such as elections.
“I was really good at betting on the electoral college outcomes. I made thousands of dollars in high school and college,” he said.
Two sides of the decentralisation coin
When the website he was using for placing bets shut down, Gardner saw the need for decentralisation to be brought into the betting platform market. He also saw that there was a lot more room for growth in the betting platform market.
Gardner stated that decentralised prediction markets “made a lot of sense,” which prompted his vision for a “decentralised global source of truth and forecasting”.
The platform’s decentralised nature has made it difficult to govern. As users can set up their own betting markets, there were a lot of them which bet on the death of an individual. If said individual died, a lot of users stood to make a profit, leading to economic incentives for assassinations.
The birth of the ICO model
The Augur platform was one of the first to be financed through an ICO, which went off successfully. This allowed Gardner to focus on the project, even though there was no economic incentive.
However, the ICO was only one of the steps for the platform to actually take off. As development progressed, Gardner realised that another token was required for the network to function. This would later take the form of REP, the Augur network’s utility token.
“At that time, I didn’t see that many use cases for utility tokens, but Augur’s wrapped token is still the best utility token there is,” he said.
The token was also off to a very rocky start, as it came to be at around the time Ethereum was first created. This created an aura of uncertainty around the project.
“By all measures, we should have failed … We were going to build on a blockchain that didn’t exist yet,” Mr Gardner said.
“There were not a lot of people that believed that Ethereum would be successful, let alone Augur – and for all the right reasons. I mean, it was super early.”
The state of Augur today
Even as Augur took off, it was not all happy endings for Gardner. He soon became embroiled in a lawsuit filed by Matthew Liston, who claimed that he was cheated out of his stake in the Augur ICO.
Along with three other “associates”, Gardner was accused of committing fraud, breach of contract and trade theft. At this point, Gardner stated that in a statement to Coindesk that the claims made in the lawsuit were “demonstrably false”.
He went on to call the case a “this is a superfluous lawsuit if there ever was one.”
Today, Augur sits around the top 30 most used Ethereum dApps. The platform has just over 1100 users every week, but has been demonstrating a steady decline.
However, the contract itself holds a large amount of Ether, to the tune of 5700 ETH.
This puts it among the top 10 dApps with the most Ether, showing that it still has an enduring userbase.