Augur: a Decentralized Oracle and Prediction Market Platform (v2.0)

Contents

• Abstract
• I. HOW AUGUR WORKS
  • A. Market Creation
  • B. Trading
  • C. Reporting
    • 1. Dispute Windows
    • 2. Participation Tokens
    • 3. Market State Progression
    • 4. Pre-reporting
    • 5. Designated Reporting
    • 6. Open Reporting
    • 7. Dispute Round
    • 8. Waiting for Window
    • 9. Fork
    • 10. Finalized
  • D. Market Settlement
    • 1. Settlement Fees
    • 2. Reputation Redistribution
• II. INCENTIVES AND SECURITY
  • A. Integrity of the Forking Protocol
    • 1. Maximum Benefit to an Attacker
    • 2. Parasitic Open Interest is Unknowable
    • 3. Minimum Cost of a Successful Attack
    • 4. Integrity
  • B. Our Assumptions and Their Consequences
  • C. Market Cap Nudges
  • D. Leveraging the Threat of a Fork
• III. POTENTIAL ISSUES & RISKS
  • A. Parasitic Markets
  • B. Volatility of Open Interest
  • C. Inconsistent or Malicious Resolution Sources
  • D. Self-Referential Oracle Queries
  • E. Uncertain Fork Participation
  • F. Responsibility During a Fork
  • G. Ambiguous or Subjective Markets
• ACKNOWLEDGMENTS
• References
• Appendix A: Finalization Time & Redistribution
• Appendix B: Bond Size Adjustments
  • 1. Validity Bond
  • 2. No-Show Bond
  • 3. Designated Reporter Bond