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How Bullish is Augur on Andrew Yang?

What the World's First Decentralized Prediction Markets Foresee for Crypto Twitter's Most Beloved Candidate...and His Rivals

June 26th, 2019, 10:00 am

Tonight, the most crowded field of presidential candidates in U.S. history will descend upon Miami and square off in the first debate of the 2020 election cycle. Well, at least a slice of it will. The pool of POTUS hopefuls runs so deep that the inaugural showdown is split among two evenings, the second session taking place tomorrow.

Today, we’ll take a peek at what Augur, the world’s first open prediction market protocol, is forecasting for these candidates….and especially for Andrew Yang. He is, after all, a popular figure in the crypto community.

The 44-year-old entrepreneur, philanthropist, and aspiring Dem nominee serves up a broad menu of policy ambitions, centering on Universal Basic Income but extending to the more far-out, like providing free marriage counseling for all Americans, creating a national texting hotline to report robo-calls, and even doing away with the penny, since he believes it “makes no cents.”

Yang has taken a friendlier stance on coins of the crypto variety, however, lauding the transformative potential of decentralized tech and opting to be one of just two candidates so far to accept campaign donations in cryptocurrency, along with Eric Swalwell, the 38 year-old California Congressman.

It’s no surprise that Augur traders have started creating markets and speculating on Andrew Yang and other candidates. Since these are early days for Augur and for the election cycle, these markets’s odds should be taken with a heavy grain of salt. Many Augur markets are lightly traded at this point and thus may not produce robust predictions. They will likely be more liquid and predictive after Augur v2 is released.

We’ll look exclusively at short-term polling markets, rather than election outcomes, since long-term markets expiring after the v1 cutoff may be unreliable to trade in at this point. We look forward though to observing markets on long-term election outcomes after v2 is live.

There are currently several Augur markets on short-term polling outcomes. Guesser, a user-friendly Augur overlay, has a market on whether Yang will be among the top-5 highest polling candidates on July 10th, according to polling aggregator Real Clear Politics. As of this writing on June 25th, Yang is polling in 8th place, and the market last traded at .15, loosely implying 15% odds. Another Augur market concerns the same outcome but for a further out date at the end of July and has higher odds, last traded at .18.

Democratic Candidate Polling on Real Clear Politics
Current polling averages, according to Real Clear Politics.

An Augur market titled “Who will Win the The First Democratic Primary Debate?” predicts which candidate will rise the most in polling between June 27th and July 13th. As of this writing, it gives Elizabeth Warren (.19), Andrew Yang (.17), and Pete Buttigieg (.17) the highest implied odds of listed candidates. However, the“other” bracket, which includes all unlisted candidates, including frontrunners Joe Biden and Bernie Sanders, last traded at .30.

Given that the market concerns the point rather than percentage increase, it is quite bullish for Yang. For instance, if Warren went up 3 points (from 12.8 to 15.8), that would represent a ~23% rise in polling. But since he's starting much lower, if Yang staged a similar 3-point rise (1.3 to 4.3), that would take him up ~230%!

PredictIt, a centralized prediction market, is currently giving Yang a roughly 13% chance of securing the nomination, despite him only polling around 1% nationally. Whether these bullish odds are the product of a YangGanger-skewed trader demographic or the market picking up on something that the wider public can’t see yet…only time will tell.

As the election season heats up, Augur v2 is released, and the UX continues to improve, we expect Augur markets will be a popular venue for trading on political outcomes. The peer-to-peer protocol offers an exciting alternative to centralized sites like PredictIt. It lets anyone create markets on anything, trade as much as they want with no betting limits, and is free of operators taking fees or controlling users’ funds. In the long run, Augur markets have the potential to produce more accurate forecasts and achieve orders of magnitude higher liquidity than existing alternatives.

As the developers of a decentralized protocol, The Forecast Foundation does not operate markets, but we do enjoy observing them. As the election season enters full swing in the coming months, we look forward to sharing what Augur markets foresee on Yang and his rivals. And we might not be the only ones sharing this… Earlier this year, Andrew Yang tweeted about his odds on PredictIt.

Will he soon be tweeting his Augur odds?

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