(REP/BTC) Bet the Farm on Auger!!!
Dear Friends,
I believe Augur is the shiniest gem in the heap. I’m writing this towards an audience who is generally already familiar with Augur, but in a nutshell Augur is a decentralized prediction market.
Augur is a decentralized prediction market built on the Ethereum blockchain. It allows you to forecast events in a prediction market.
Prediction markets are exactly what they sound like.
Let’s say I want to predict who will win the 2020 U.S. election. Through augur, I can set up a prediction market with odds on who will win. Token holders can stake their tokens on either side of the prediction market, and if their side wins, they receive a bonus or purse relative to the odds.
While Augur itself has gone up in value already, I believe it is just starting its upward movement.
Allow me to explain why:
I. Any good news in the crypto space is good news for Augur.
In general, any increase in the overall market cap of cryptocoins is good news for Augur, regardless of whether its BTC, ETH, LTC, or XMR. Flippening or no Flippening, new fiat in is money that can be used on Augur to predict, gamble, hedge, and whatever other use cases may arise. And the overall market cap itself is going crazy.
II. People who buy cryptocoins are already gamblers to some extent.
And just from the price action we’ve seen over the past year, there are a lot of newly-rich (or newly a-lot-more rich) token holders out there with profits to gamble with. Offer them a functioning decentralized platform on which they can wager on just about anything, with low fees- it’s a recipe for success.
III. It is one of the few tokens that actually offers a return in any way other than pure speculation.
As amazing as the gains have been for both ETH and BTC, holding those tokens offers nothing except price action on the underlying token. Holding REP offers both that and a percentage of the fees that will take place on Augur’s platform. One could argue that the recent gains in ETH are purely speculation that killer Dapps will be developed on the network. I believe Augur will the be tops. Certainly by holding ETH, one tangentially gains exposure to ALL of the underlying projects that will use the Ethereum network, and I would not argue against holding some ETH. But holding the tokens of the projects that succeed will offer much higher gains, and I believe Augur will be one of the hallmark successes.
IV. Scarcity.
There are only 11 million tokens and will only ever be 11 million tokens. The dev team and many of the largest token holders are holding for the long term. Polychain capital (an amazing crypto hedge fund) holds a chunk that they’re not selling. With a small token count and an even smaller number available on the market, it takes much less net buying to really move the needle on the price. To use the overused “moon” analogy, Rep is a rocket with a lit fuse.
V. Expansive use cases.
While gambling will be the primary use, at least in the beginning, there are so many other ways it could be used. It could be used to offer exposure to price action on just about anything, to anyone anywhere. It could be used to hedge against an existing position. And in the long run, it could be used by businesses to offer internal incentives to employees, or to gauge the likelihood of projects being completed on time or on budget. In an interesting discussion on the team’s Slack, one user described how Augur could be used to incentivize weight loss by opening a market based on a target weight and date. The use cases are nearly unlimited, and some of the more interesting ones have likely not yet have even been conceived.
So how much is Rep worth? I’m going to refrain from an analysis where I show you that the world’s gambling market cap is 10 kazillion dollars and that if Augur could capture only 1% of that then Rep holders will all be billionaires. It remains to be seen how widely adopted crypto-currencies will become, and how quickly. But given the pace of innovation we’ve seen thus far, I like the chances that Augur will be a smashing success, and I believe that REP is the token to buy and hold in the long run. I wouldn’t even consider selling until it is at parity with the price of ETH.
New Developments and Challenges
The team has onboarded multiple new employees, including a team to help on the UI which is still a work in progress. Making the UI work correctly with the underlying smart contracts and blockchain architecture, while being aesthetically pleasing and having a functional orderbook is, I believe, one of their biggest remaining challenges.
The team and community were jointly successful in creating enough interest in the project to merit Augur having its own Stack Exchange listing. In doing so, Augur joins an elite group of crypto projects that have reached this milestone, including Bitcoin, Ethereum, and Monero.
Of note, one significant change that has been made is the fee system. One of Augur’s main premises has been that the fees charged by other gambling sites or other prediction markets have been exorbitantly high, and Augur’s goal has been to offer similar services with very low trading fees. Originally the fees were going to simply be 1–2% of every trade, splite evenly between market creators and reporters. However, the team found that such a system would have some vulnerabilities, and have adjusted accordingly.
In a nutshell, the new system still allows market creators to choose any fee they like, and their fees will be separate from reporting fees. These fees will likely trend downward as the cost to create a market is minimal, and competition will put downward pressure on the rates market creators choose.
The major change is that reporting fees are only charged when traders exit their positions. These fees will be somewhat dynamic, depending on how much open interest there is. The stack exchange has some more detailed discussion of this.
Interestingly, this new structure also allows for a way to valuate Rep. Some discussion (using somewhat outdated numbers for Eth values etc) on the stack exchange. In summary, estimate what you think the open interest (amount of money tied up in bets) will be on Augur at any given time, and multiply that by 5. Then divide that by the 11 million existing tokens to find what the value of a single REP token would be for that level open interest. For example, an aggressive estimate of 1.5 billion open interest, REP would be valued at $681.
I don’t know what the open interest will be; no one does quite yet. I just know that I’m not selling my coin while they are valued in triple digits, and likely not while they are in the low quadruple digits either!
CALL TO ACTION: Buy REP on the Binance, Bittrex, or Kraken, Exchanges at $11.25 or less.
Stay ahead of the masses,
Seth Maniscalco
Founder, Crypto Wealth Coach
Owner, Modern Wealth Management
Founder, Trading Resource Artificial Intelligence Network (T.R.A.I.N.)
CryptoWealthCoach.co
I believe Augur is the shiniest gem in the heap. I’m writing this towards an audience who is generally already familiar with Augur, but in a nutshell Augur is a decentralized prediction market.
Augur is a decentralized prediction market built on the Ethereum blockchain. It allows you to forecast events in a prediction market.
Prediction markets are exactly what they sound like.
Let’s say I want to predict who will win the 2020 U.S. election. Through augur, I can set up a prediction market with odds on who will win. Token holders can stake their tokens on either side of the prediction market, and if their side wins, they receive a bonus or purse relative to the odds.
While Augur itself has gone up in value already, I believe it is just starting its upward movement.
Allow me to explain why:
I. Any good news in the crypto space is good news for Augur.
In general, any increase in the overall market cap of cryptocoins is good news for Augur, regardless of whether its BTC, ETH, LTC, or XMR. Flippening or no Flippening, new fiat in is money that can be used on Augur to predict, gamble, hedge, and whatever other use cases may arise. And the overall market cap itself is going crazy.
II. People who buy cryptocoins are already gamblers to some extent.
And just from the price action we’ve seen over the past year, there are a lot of newly-rich (or newly a-lot-more rich) token holders out there with profits to gamble with. Offer them a functioning decentralized platform on which they can wager on just about anything, with low fees- it’s a recipe for success.
III. It is one of the few tokens that actually offers a return in any way other than pure speculation.
As amazing as the gains have been for both ETH and BTC, holding those tokens offers nothing except price action on the underlying token. Holding REP offers both that and a percentage of the fees that will take place on Augur’s platform. One could argue that the recent gains in ETH are purely speculation that killer Dapps will be developed on the network. I believe Augur will the be tops. Certainly by holding ETH, one tangentially gains exposure to ALL of the underlying projects that will use the Ethereum network, and I would not argue against holding some ETH. But holding the tokens of the projects that succeed will offer much higher gains, and I believe Augur will be one of the hallmark successes.
IV. Scarcity.
There are only 11 million tokens and will only ever be 11 million tokens. The dev team and many of the largest token holders are holding for the long term. Polychain capital (an amazing crypto hedge fund) holds a chunk that they’re not selling. With a small token count and an even smaller number available on the market, it takes much less net buying to really move the needle on the price. To use the overused “moon” analogy, Rep is a rocket with a lit fuse.
V. Expansive use cases.
While gambling will be the primary use, at least in the beginning, there are so many other ways it could be used. It could be used to offer exposure to price action on just about anything, to anyone anywhere. It could be used to hedge against an existing position. And in the long run, it could be used by businesses to offer internal incentives to employees, or to gauge the likelihood of projects being completed on time or on budget. In an interesting discussion on the team’s Slack, one user described how Augur could be used to incentivize weight loss by opening a market based on a target weight and date. The use cases are nearly unlimited, and some of the more interesting ones have likely not yet have even been conceived.
So how much is Rep worth? I’m going to refrain from an analysis where I show you that the world’s gambling market cap is 10 kazillion dollars and that if Augur could capture only 1% of that then Rep holders will all be billionaires. It remains to be seen how widely adopted crypto-currencies will become, and how quickly. But given the pace of innovation we’ve seen thus far, I like the chances that Augur will be a smashing success, and I believe that REP is the token to buy and hold in the long run. I wouldn’t even consider selling until it is at parity with the price of ETH.
New Developments and Challenges
The team has onboarded multiple new employees, including a team to help on the UI which is still a work in progress. Making the UI work correctly with the underlying smart contracts and blockchain architecture, while being aesthetically pleasing and having a functional orderbook is, I believe, one of their biggest remaining challenges.
The team and community were jointly successful in creating enough interest in the project to merit Augur having its own Stack Exchange listing. In doing so, Augur joins an elite group of crypto projects that have reached this milestone, including Bitcoin, Ethereum, and Monero.
Of note, one significant change that has been made is the fee system. One of Augur’s main premises has been that the fees charged by other gambling sites or other prediction markets have been exorbitantly high, and Augur’s goal has been to offer similar services with very low trading fees. Originally the fees were going to simply be 1–2% of every trade, splite evenly between market creators and reporters. However, the team found that such a system would have some vulnerabilities, and have adjusted accordingly.
In a nutshell, the new system still allows market creators to choose any fee they like, and their fees will be separate from reporting fees. These fees will likely trend downward as the cost to create a market is minimal, and competition will put downward pressure on the rates market creators choose.
The major change is that reporting fees are only charged when traders exit their positions. These fees will be somewhat dynamic, depending on how much open interest there is. The stack exchange has some more detailed discussion of this.
Interestingly, this new structure also allows for a way to valuate Rep. Some discussion (using somewhat outdated numbers for Eth values etc) on the stack exchange. In summary, estimate what you think the open interest (amount of money tied up in bets) will be on Augur at any given time, and multiply that by 5. Then divide that by the 11 million existing tokens to find what the value of a single REP token would be for that level open interest. For example, an aggressive estimate of 1.5 billion open interest, REP would be valued at $681.
I don’t know what the open interest will be; no one does quite yet. I just know that I’m not selling my coin while they are valued in triple digits, and likely not while they are in the low quadruple digits either!
CALL TO ACTION: Buy REP on the Binance, Bittrex, or Kraken, Exchanges at $11.25 or less.
Stay ahead of the masses,
Seth Maniscalco
Founder, Crypto Wealth Coach
Owner, Modern Wealth Management
Founder, Trading Resource Artificial Intelligence Network (T.R.A.I.N.)
CryptoWealthCoach.co
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