Forecast market under pressure: Scam on Augur?

the Reddit users speculate about a Augur Scam. Joey Krug, the CEO of the decentralized market forecast platform, is defending himself on Twitter, admits but also weaknesses in the System.

Polina Khubbeeva
On the 25. March 2019BTC$3.977,60 -0.31%part Facebook Twitter LinkedIn xing mail

"Augur is being gamed!" (in English: "In the case of Augur something is not right!") This is the title of a Reddit thread from the 19. March 2019. Therein, a user of the Social News platform speculate about a Scam on the Ethereum-based decentralized market platform, Augur.

On the so-called "Prediction markets", i.e., prediction markets, can use a User Token, which you on the outcome of certain events betting. Such platforms, meeting with the collected competence of the Online swarm intelligence is often more accurate predictions about events in the future as a classic market - and opinion research institutes.

The special feature of Augur is the fact that it works decentralized by the Blockchain, and no state regulations subject to. In the past, governments have provided again and again for the deactivation of prediction markets, such as 2013 in the case of intrade.com. This is in the case of Augur by the independence that the Blockchain offers, very unlikely.

Augur was founded in 2014 by Jack Peterson, and Joey pitcher. 2018, the platform went to a Crowdfunding campaign with an amount of 1,6 million dollars online.

Fake markets enable profits

The recently reported fraud is based on contradictions or minor inconsistencies in the wording of a prediction market. The fraudsters opened deliberately, such a flawed market, which will inevitably be declared invalid. This leads to the fact that the System pays for which the allocated funds equally to all wagering participants and, therefore, also to the scammers themselves.

the Creator of The invalid market is betting on a deliberately improbable events. Since he has secured his payment in advance, he gets the result of its operations plus the Profit.

An example of the Scam, according to Reddit user "Singlefin 12222" the market "Ethereum-rate until the end of March 2019?", the is a discrepancy between the two specified expiration dates. Users to overlook the contradiction and use their Token, the Trick of the swindler.

CEO Joey pitcher reacts

On Twitter refers to Augur CEO Joey pitcher to the speculation: "Almost all of these intended in the misleading of markets were created by a single Person, any group of people. The activity in these markets is also in one address per Person.“

Although Krug considers the Problem to be exaggerated, expresses concerns regarding the current functionality of security mechanisms to prevent such Scams. Augur identify only one percent instead of ten percent of the markets to be invalid, suggesting a Bug on the Chain. Krug announces a correction of the errors in the Version 2 of the Augur.

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