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The First Markets Have Successfully Resolved on Augur

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Augur, the decentralized prediction market startup, has successfully resolved its first prediction markets.

$20,000 in Ethereum is allegedly being sent out to early users of the platform, who used it without 100% certainty that they would get their money back.

At this point, it’s important to step back and give our readers a quick recap of Augur and decentralized prediction markets in general.

Augur: An Overview

Augur at its core is a decentralized prediction market platform that utilizes the Ethereum blockchain.

A prediction market is defined by the ability for a user to bet on the outcome of future events in order to get monetary prizes. The less likely an event is to occur, the bigger the reward you can earn for predicting its success.

For instance, this analyst used a centralized prediction market called Predictit to win $6k in the 2016 election betting Donald Trump would win the election.

In this system, before the event outcome was determined, users could buy and sell “yes” or “no” bets between .01 cents or $1. If the outcome resolved yes, all yes shares were redeemed for $1. If the event resolved no, all yes shares were redeemed for $0.

Augur differs from centralized services such as Predictit by making use of “The Wisdom of the Crowd” from predictors on the platform.

They use these predictors to create real-time predictive data that’s oftentimes more accurate than the leading experts.

So how does this work in practice?

Creating Markets

You need to spend a small amount of Ethereum tokens to create an Augur market. Markets can be anything from “Will the price of Bitcoin hit $20,000 before the end of 2017?” to “Will Jesus Christ return in 2018?”

When you create a market, the user sets the taker and maker fees (the cost to buy and sell shares on the books). Taker fees must be between 1.0% and 12.5%. Maker fees also can’t be more than half of the taker fee. As the market creator in this instance, these are the fees you would receive when the market closes.

Although this is the current fee structure, discussion on the official Stack Exchange page suggests that this will be changing.

At some point in the near future market, creators will instead set a creator fee, and there will no longer be maker/taker fees. The creator fee is taken from the rewards of the traders that hold winning positions and are given to the market creator.

As a market creator, the goal is to keep the settlement fees low enough to incentivize people to bid using your market while also being high enough to cover the initial Ethereum cost you spent to create the market.

Besides creating markets, Augur users can also buy and trade shares that represent the odds that the event in a given market will occur. For example, you see a market, “Will Stellar Lumens reach $1k by 2018?”

Because Coinbase recently stated they were considering adding STellar Lumens to their platform, this market intrigues you. You might be fairly sure that it’ll reach $1k before the end of the year, so you put in a bid to buy 50 shares at 0.6 ETH a share.

Shares are worth anywhere between 0 and 1 ETH. The higher the price you buy a share for, the more likely you believe that the event will happen.

Augur Traders

There are two ways to make money as an Augur trader. With fluctuating share prices, it’s theoretically possible to buy positions at a low cost and sell them higher as sentiment changes. Real world catalysts may also cause an event to be more or less likely to happen over time.

You can also earn money if you predicted an event correctly and hold shares when the market closes. The amount of your payout equals:

Payout = Number of shares * Price / Number of ticks

The number of ticks is the number of possible price points between the minimum and maximum prices in a market.

You also need to pay settlement fees from each of your winnings. The settlement fees include the creator fee set by the market creator and the reporting fee used in the Decentralized Oracle System utilized by Augur. The larger your earnings, the higher the fees you’ll have to pay.

The REP token powers this Augur Decentralized Oracle System. You can stake REP to report on the outcome of events for the different markets.

When a market closes, you must report on the outcome of the event and put up a certain amount of REP to back your claim. If the event hasn’t occurred yet, you are asked to mark it “Invalid” seeing that you won’t be able to report on it.

You have 27 days after an event closes to submit a report. If you report the same outcome as the majority of reporters in your market, you’ll receive your REP back plus a portion of the reporting fee. The reporting fee uses the following formula:

Reporting Fee = Current Reporting Fee * ( Augur Open Interest * 5 / REP Market Cap )

The more REP that you stake when submitting a report, the greater proportion of the reporting fee you earn.

Making things slightly more complicated, markets can also be reported on by a designated reporter. The market creator delegates a designator reporter to report a proposed outcome for the market within 3 days after the market closes.

As a reporter, you are allotted an additional 3 days to challenge the proposed outcome of the designated reporter. If there’s no challenge put forth, then the market enters the next reporting round by skipping the usual 27-day reporting phase.

You also need to stake some REP in order to challenge a proposed outcome. The REP that you stake is called a dispute bond. If your challenge is successful and the proposed outcome is reversed, you’ll get the funds from your dispute bond back.

Augur started in 2014. Vitalik Buterin, known famously as the creator of Ethereum, is notably an advisor to Augur.

Augur ICO

Augur did court some early controversy.

They originally held an ICO in August 2015 in which they distributed 8.8 million REP tokens. There are and only will ever be 11 million REP tokens in circulation.

REP traded between $1.50 and $2.00 (~0.0047 and ~0.0050) immediately after the ICO.

The price has had three significant spikes in its history since this point.

The first occurred in March 2016 as a result of their beta release.

The second occurred in October 2016 when investors received their REP tokens from the ICO. This caused the price to quickly increase before dumping as exchanges added support for the tokens.

The third and largest price increase occurred in 2017 on December 19th in which the price rose to over $100 before settling in on the $90 range. There was no significant news that seemed to cause this increase.

Some people have speculated as a result that this spike was a result of a classic “pump and dump” while others think that it may have been insiders trading on the rumor that the token will soon be added to Coinbase.

However, as more and more decentralized applications start providing real value an utility to users, the market prices of their tokens may start appearing closer to the true value of their worth.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Altcoins

Stellar Lumens Quietly Leads Crypto Market Recovery as Fidelity Rumors Circulate

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Stellar Lumens has put up double-digit gains over the past week, buoyed by improving fundamentals and rumors of a potential partnership with Fidelity Investments.

XLM/USD Update

The XLM price experienced little movement on Sunday, as the overall market made tepid gains. At the time of writing, XLM was down 0.8% at $0.2415. Against bitcoin, the cryptocurrency was down 2%, according to CoinMarketCap.

Compared with seven days ago, XLM has gained more than 13%. Lumens peaked near $0.2500 on Saturday. Over the same period, the broader cryptocurrency market rose 4%. Bitcoin is up just 3.4% over the same period while Ethereum gained 3.7%.

At current values, the Stellar blockchain has a total market capitalization of $4.6 billion. Trade volumes in the last 24 hours reached $48.1 million. Binance, BitMart and BCEX are the largest markets for XLM trades, according to the latest available data.

This isn’t the first time XLM has outperformed the broader market. Lumens managed to hold its ground during the mid-August slump, a period that was associated with a 21% drop in Ethereum and a nearly 40% plunge in IOTA.

Fidelity Rumors Circulate

The latest upsurge in Stellar’s price follows speculation that Fidelity Investments may consider adopting the XLM blockchain for its digital asset business. The speculation is tied to Tom Jessop, a Fidelity executive who used to run a promising blockchain startup by the name of Chain. The Chain project was recently acquired by the Stellar Development Corporation. Following the merger, the Stellar Development Corporation re-branded as Interstellar.

From an institutional standpoint, Fidelity is considered an early adopter of cryptocurrency. The asset manager has been mining cryptocurrency for the past four years and recently announced plans to develop a new suite of blockchain-focused products.

Stellar has been subject to other positive speculation in recent months as large corporations seek entry into the blockchain arena. In August, Business Insider speculated that Facebook was eyeing a potential partnership with Stellar. Although Facebook denied the rumors, there’s strong reason to believe that the social media network will soon enter the blockchain arena, which makes Stellar a prime candidate for adoption.

Last month, IBM announced it had officially launched its new money transfer business on the Stellar protocol in a move that could springboard digital currency adoption across the globe. IBM Blockchain World Wire, as the system is known, utilizes Stellar to settle cross-border transactions in a matter of seconds.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 649 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Altcoins

Ravencoin (RVN) Arrives With 118% Weekly Growth Ahead of Mainnet Launch

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Ravencoin (RVN) made its entry into the market cap top one-hundred on Sunday, propelled by a Binance listing, and 118% sustained growth over the course of the week.

Trade volumes for the asset-creation coin hit all-time highs on Thursday, rising an incredible 23,000% from $212,000 to $49 million within the space of ten days.

Ravencoin has been around since 2017, and the upcoming mainnet launch on October 31st marks the one year anniversary of the coin’s creation. It also marks the ten year anniversary of the release of the Bitcoin whitepaper by Satoshi Nakamoto.

RVN Rising

Ravencoin was going relatively unnoticed until it gained a Binance listing on October 11th. As you can see from the chart below, the Binance listing completely changed the coin’s fortunes.

Indeed, if we look at the source of today’s $49 million worth of trades we see that Binance has housed just under 85% of the total.

In the past week the coin rose 118% in value, climbing from $0.017300 up to Sunday’s peak of $0.037732. Since the date of the Binance listing the coin is up 172% in value, and finds itself among the market cap top-eighty.

What Is Ravencoin?

The Ravencoin protocol is open-source and available to the public, and focuses on the creation of digital assets on its Proof-of-Work (PoW) blockchain.

The blockchain itself is secured by sixteen different hashing algorithms, all of which are rotated on a non-patterned basis. The algorithm changes depending on the final digits in the preceding block hash, making it impossible to predict by ASIC mining machines.

As stated in the initial release notes last year:

“The core developers are currently focused on building the asset layer which will allow Ravencoin to facilitate the transfer of assets.  There is a hard-fork planned for the network to implement this additional asset layer in around October/November 2018 time frame.”

The devs appear to have held true to that time frame, and the mainnet upgrade is expected to go ahead as planned on October 31st.

The release notes state that no premine was used, nor are there any developer rewards. The blockchain is intended to be a Bitcoin for digital asset creation, and according to the official documentation:

“Assets can come in a variety of types, such as financial instruments such as security tokens/stocks/bonds/deeds/etc as well as gaming items (ex. a sword)/conventional asset management/managing  distributions for co-ops/digital art. There are a lot of real-world applications that this blockchain is intended to disrupt and improve.”

More can be read about the coin’s unique hashing algorithm, known as X16R, in the dedicated whitepaper provided in the Ravencoin release.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.4 stars on average, based on 82 rated postsGreg Thomson is a full-time crypto writer and digital nomad. He eats ICOs for breakfast and bleeds altcoins. Wherever he lays his public key is his home.




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Altcoins

Minor Bounce Lifts Crypto Market Cap Above $211 Billion; Tether Circulation Plummets

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Crypto prices traded modestly higher on Sunday, as bitcoin regained its footing above $6,500 and major altcoins avoided further losses.

Market Update

The cryptocurrency market capitalization on Sunday peaked at $212 billion, the highest in five days. At the time of writing, the market was valued at $211.5 billion.

Most assets ranked in the top-20 had reported minor gains over the last 24 hours, a period marked by lower trade volumes. The bitcoin price has returned above $6,500 on trade volumes of just $3.2 billion. The leading digital currency continues to trade at a premium on Bitfinex.

Meanwhile, Ethereum rose half a percent to $206. XRP also climbed 0.5% to $0.459. Bitcoin cash was last seen trading above $449 for a gain of 1.6%.

Stellar XLM was the only top-ten coin not to report gains at the time of writing. However, the no. 6 coin by market cap has returned more than 13% over the past week, far outpacing the broader market.

Trade volumes have declined steadily over the past week, as markets re-balanced following a sudden spike on Oct. 15. Digital exchange volumes have fallen to $9.7 billion on Sunday, according to CoinMarketCap.

Tether Market Cap Plunges

Since the start of October, Tether has pulled more than $600 million worth of USDT out of circulation, leading to a sharp drop in the stablecoin’s market cap. Cryptocurrency exchange Bitfinex, which is run by the same executive in charge of Tether Limited, appears to be leading in the offload of USDT tokens. As CCN recently reported, Bitfinex has initiated six transfers of USDT funds to the Tether Treasury this month. The latest transfer was initiated on Wednesday when Bitfinex sent 50 million USDT to the Treasury.

Most of the outflows from Bitfinex occurred long before USDT lost its peg to the dollar in a single-day crash on Oct. 15. USDT briefly fell below $0.90 that day before quickly recovering around $0.94. Currently, one USDT is equivalent to $0.984 U.S., according to CoinMarketCap. Some exchanges are quoting USDT as low as $0.96 on Sunday.

The sudden decline in Tether’s circulation comes at a time when the company is facing heightened scrutiny over its dollar-backed reserves. An influx of alternative stablecoins offering greater transparency and regulatory oversight may also be undercutting demand for USDT.

Case in point: the Gemini Exchange’s GUSD stablecoin reached a high of $1.19 on Tuesday before settling around parity against the dollar. Unlike USDT, the Gemini Dollar has obtained regulatory approval from the New York Department of Financial Services. On the opposite side of the spectrum, Tether has been subpoenaed by federal regulators over its connection with Bitfinex and failure to prove its dollar reserves.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 649 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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