Augur (REP) Price Analysis – project matures but user count is still low

Augur (REP) was an outstanding player among the Altkouns in 2019, an increase of more than 100% from January 1. Major updates and peripheral applications built on the platform caused some recovery of the market and sales volumes, the activity of active users is not impressive, but the search for liquidity is still a problem for most users and markets.

Augur (REP) is a leading decentralized prediction platform built on the Ethereum blockchain. It is designed to predict and communicate the results of real events based on the principle of majority consensus.

Traders participate in peer-to-peer forecast markets based on real world events. Augur's sophisticated reward and dispute model is designed to create a system in which market chances naturally coincide with the true sentiments of the real world. Augur uses the “wisdom of the crowd” phenomenon, which suggests that the collective forecasts of a group of people will be more accurate than the forecasts made by individual experts.

In a podcast interview with crypto-influential person Anthony Pompiano, Augur co-founder Jeremy Gardner said that Augur's goal was to create a "decentralized, global source of truth and prediction."

The price of the REP Augur native token has decreased by ~ 2% over the last 7 days and by 6% over the last 30, but has grown by ~ 150% since the beginning of the year. ICO Augur / REP was carried out back in 2015, when 2500 investors spent ~ 5,3 million dollars on REP tokens. The REP currently ranks 34 in the Brave New Coin capitalization table.

The REP price fell by ~ 80% from a record high in January 2018. Augur's current iteration of the platform was launched on the Ethereum network in July of 2018.

Augur Mechanics

The Augur platform operates with a smart contract that fits opposite orders. Users who want to make opposite bets on the outcome of specific rates markets are connected and interact with each other.

For example, in the currently open Augur market "Will Donald Trump be re-elected in 2020 year?" There is an open interest of $ 38 352. The market closes 6 December 2020 of the year. He currently has an 57% "Yes", which means that if a trader wants to buy the 100 portion of ETH in Donald Trump's re-election, he will do so with such a probability. They would also require the counterpart to agree to match the percentage with the probability 43% that “No”, Donald Trump would not be re-elected to be filled.

If a user buys a result that ultimately turns out to be truthful (based on oracle reports), he makes a profit depending on his bet. If the selected result is false, the user loses his bet.

Since all markets are open before the oracle finally reports the results, users can cash out their bets; risk hedging, minimizing losses and faster access to profits if they are no longer interested in participating in the market.

Markets can be either binary (yes / no or one / or other markets), categorical (several different fixed results) or scalar (variables, with the ability to open short or long positions).

The above tag cloud indicates the most common tags in the Augur markets for size differences. Markets associated with the terms "cryptocurrency" and "price of ethereum" are still present on the platform due to the demographics of users of cryptocurrencies. Football Terms / Football Associations are also popular with the terms “Football”, “League”, “Champions” and “Europe”.

Interestingly, while the NBA playoffs currently dominate sports coverage in the American media and social channels, terms related to basketball seem to be under-represented in the word cloud. This may indicate that Augur has more European than American users, or that football competitions are easier to speculate than basketball games.

Augur markets with events that speculate on the prices of digital assets on specific dates tended to cause the most open interest in Augur. Some markets around American politics and sports can sometimes become popular.

StateoftheDapps.com tracks Augur's core smart contracts as Ethereum Dapp. This indicates a slight downward trend in both the number of active users and transactions during the last month, with sharp jumps in the middle of the month for both.

The Augur network volume figures are high compared to a number of other Ethereum Dapps. This suggests that, although they have fewer 200 users, each represents a significant amount of ETH. Based on ETH prices on 07 / 05 / 2019, the average daily Ethereum volume on Augur was ~ 60 700 US dollars.

Augur is currently listed on the 25 list of the most popular Dapp in the ecosystem. On average, over the last month he had ~ 118 active users and ~ 424 transactions.

Most of the unique addresses in Augur are stored by trade addresses, and therefore the most commonly used digital asset used in Augur is ETH, and not its own REP marker.

“Yes / No” markets have always been the most popular type of market in August, probably because of how easy it is to create and participate in them. Recently, there has been a slight proportional increase in the number of scalar markets, which it can be assumed that the Augur community is experimenting with a more unusual market design.

While all trading (creating and filling orders) on Augur is currently done using ETH, the network's own REP token represents “reputation”. Users / oracles receive a REP reward if they report an event, and it conforms to the agreed consent of other reporters. They must “work” (report events, participate in dispute resolution) in order to maintain their REP rates, and inactive REP accounts are punished.

It's an incentive based system, if the oracle misreports an event - an objective outcome - then the rest of the market takes note (invisibly through a smart contract) of that bad reporter and they are penalized with a loss of REP.

Potential and supporting infrastructure
Travis Kling, Ikigai Capital Investment Director, said: "Owning Ethereum today is an option for what you think will be online in the future." Similarly, while most REP buyers are likely to expect short-term gains through trading, some buy and hold REPs with anticipation of future use cases as the platform grows and evolves.

The number of users of Augur applications at this early stage is not impressive, but the functioning platform infrastructure is complex and impressive. He is experimenting with the Ethereum network and conquering fans of cryptanalyst and investment communities.

When product usage grows despite mediocre UX, it's usually a good idea to start paying attention if you're an entrepreneur or investor,” says 1confirmation founder Nick Tomaino. It's still pretty early, but it looks like Augur is about to do something."

It is easy to understand the excitement and potential surrounding Augura. It has a unique, diverse value proposition and a high ceiling of future value, because;

  • Users are free to create any market they need and let other users determine if this is a real betting option.
  • Smart calculation of contracts based on blockchains can significantly reduce costs and time to calculate multiple bets on numerous trading platforms.
  • The unconditional nature of Augur (funds and transactions are protected and confirmed on the basis of the Ethereum global account) allows users in any region to participate in previously inaccessible secure trading platforms. That is, ETH Holder in Asia can make speculative bets on US stocks cheaply, with minimal friction, in such a way that this is not possible before markets such as Augur appear.

Augur also has significant potential to support an ecosystem of applications that use the core infrastructure of the forecasting market to create tools and games based on decentralized forecasting.

Predictions.global is an example of the Augur app, and it comes with the words “See what the world thinks”. This is a panel that sorts the various Augur markets into various categories and provides excellent detailed information about each market. Using Forevision.global, it's easy to see what the Augur community thinks about global events, such as the closing price of Uber shares on IPO day, whether Liverpool will win the 2019 Premier League of the year or the price of ETH at the end of May, and possibly make personal decisions based on these tangible data "crowd wisdom."

Another idiosyncratic application that uses Augur's underlying prediction market is PdotIndex, which allows users to invest in people (celebrities) in the same way as companies. The Pdot Index value of a public figure like LeBron is made up of several separate Augur-driven speculative markets (how many points per game he will average, how many games his team will win this season, etc.) which are combined to give weighted score for each public in the figure list.

An individual's score varies based on differences in the outcomes of events related to a public figure, based on ratings made by a crowd of Augur players. Traders can bet ETH to profit from changes in public opinion.

Currently, Pdot works only on the Rinkeby test network and is still in the early stages of development, but the platform gives an idea of ​​what may be built in the Augur ecosystem in the future.

There are also a number of other Augur applications that facilitate interaction with the basic forecasting market (for example, user interaction tools), and also provide Augur data “crowd wisdom” in alternative forms. These include:

  • crystalball.be collects a number of relevant Augur performance metrics and displays dynamic data trends.
  • Veil is a derivative market from Augur that makes trading easier. It was built using 0x
  • Augur Insider calculates volatility for Augur markets
  • Crowdsourcer Augur Dispute allows users to check the end states of various markets

There has already been some excitement and a positive market reaction to a number of these applications. The release of Veil coincided with a period of extremely strong price behavior of REP tokens.

In anticipation of the Veil 15 release in January, REP prices rose sharply, rising by ~ 127% between January 14 and January 20 and from ~ US $ 8,27 to ~ US $ 18,80. Since mid-January, the price has changed and stabilized. It currently costs about $ 21.

As the Augur ecosystem evolves, the release of peripheral applications that improve UX and attract new users can become key short-term speculative price drivers.

Barriers to progress

The main obstacle for Augur access to new users is poor interaction with the platform. For non-technical traders, it is difficult to understand the results of purchases and sales or calculate profits. In addition, the resolution of disputes and the settlement of the market within Augur can take a long period of time, it affects the time required to receive payments.

For example, Veil has features such as instant billing (enabled by third-party market auditing), which pays users after the market expiration date, and a leaderboard showing users' performance across the platform to create an objective way for a user to evaluate their capabilities. predict the events of the real world.

His value proposition is to make the Augur shopping experience more simple and attractive for mainstream consumers. This seems to be related to some traders and stimulates a speculative impulse around product release dates.

Unfortunately, since the release, the actual use of Veil as a derivative solution of Augur has been minimal. Currently, Veil operates all 13 active markets. Based on the displayed volume of trade, most of these markets are inactive, and the number of executed orders is small.

The clear problem with Augur in its current form is liquidity. Of the 327 current markets on Augur, only 37 meet the minimum liquidity threshold set by the gnations.global aggregator. This means that only 10% of Augur's markets are worth trading or will be able to meet the match requirements.

The counter-matching model of the platform led to difficulties in expanding the Augur user base due to the nature of bilateral trading platforms and the problems of chicken and eggs.

With the help of Augur, the number of order creators determines the number of order executors (market makers / counterparties), and without available fillers, traders do not want to create warrants, and without creators who create trading opportunities, screeners refuse. This means that Augur's two-way solution for the market probably ran into problems when it reached its scale in its early form. Augur’s mission to become a “decentralized, global source of truth and forecasting” is limited by the absence of a global forecasters community.

Another problem in the growth of Augur was previously playable and compromised model of market payments.

In the current version of Augur, the market will be considered “invalid” when reporters consider its result ambiguous or unverifiable. Shares in such markets can be leased for equal money. For example, a three-outcome market with outcomes A, B, and C, which resolves to be invalid, will give 0,33 ETH per share of each result.

Some market users / creators, such as @realPoyoPoyo, are clearly aware of their attempts to play the Augur system. By creating a market with a deliberately hidden mistake (deceiving the participants) and relying on results that will not be won, they put the REP on a market that is not valid at low prices. Gamers know that the investment will be distributed equally, so players who bet on the wrong result will make a profit.

This excellent thread tells you how difficult it is to write accurate Augur markets with clear results. A recent example of a market with uncertain outcomes: “Will GRIN / USD be included in CoinMarketCap for 16 in March 2019 of the year?”, Built on Veil. The market was unclear, because GRIN / USD can mean either GRIN, expressed in US dollars (the intention of Weali), or a literal GRIN / USD trading pair. Veil stopped trading in the market, and then decided as YES. It was clear that the subtle ambiguity inherent in this question led to erroneous decisions by traders.

Augur V2

The code for the next major platform update, Augur V2, was released in early April. The update partially solves some of the problems associated with creating ambiguous markets on the platform. The update will allow “False” to become a trading result, like any other, allowing traders to hedge the risk of Incorrect results and assess the likelihood of its occurrence. For example, a trader who views a market with a large amount of money made for an invalid one can refuse to participate in the market.

Another major step built into the V2 update is the DAI denomination markets. Augur V1 only allowed traders to use ETH for trading activities. ETH was a natural choice for the token given that Augur is an Ethereum-based platform. However, ETH is a highly volatile asset subject to frequent price changes affecting the willingness of Augur traders to participate in the markets.

DAI is a stablecoin that aims to maintain a 1:1 peg to the US dollar. With the inclusion of denominations and DAI payments, the Augur markets will become less volatile and more accessible. In the official V2 documentation, Augur specifically refers to the possibility of multilateral DAI. This version of DAI has not yet been released, hinting that Augur V2 may only be released after the launch of multilateral DAI.

Augur V2 will also change some of the basic utilities built into the REP. After starting V2, if the Augur V2 forks market (remains controversial or unresolved after several rounds of dispute resolution), the user has 60 days to participate (deciding on the results of a branched market), or he will lose his REP.

This protocol means that Augur should become more difficult to fork, because more users and more REPs will be motivated to participate in the agreed fork. This means that a bad actor will have to overcome more obstacles in order to be on the right side of the outcome from Augur's wide fork.

This protocol was controversial for many, because many modern REP owners are investors or traders who have accumulated a token for speculative purposes. They are not actively involved in the Augur marketplace and do not track markets that are not allowed or close to branching. Two months of inactivity of the chain will result in the loss of all REP tokens.

Making the right decision on the Augur fork may also require monitoring community discussions on platforms like Reddit or Twitter to determine who might be a bad actor, a process that many current REP owners are not interested in.

Regulation of fees paid to traders (in REP) by traders is one of Augur’s main security mechanisms. The fee is adjusted based on the total open interest (OI) on the platform and the REP price. In V1, Augur used the centralized price oracle to report the REP rep market price so that a commission could be calculated. This price channel oracle often buggy and for some time did not adjust the fees paid to journalists.

V2 corrects the error and introduces a built-in double auction that will act as a price stream. Each week there will be two double auctions in which the DAI and REP pot are sold for each other, and the REP price is calculated on the basis of selling prices. The platform will weekly mint a small amount of REP to compensate for any losses from the auction. This introduces a small amount of inflation to the REP in exchange for a decentralized price stream used to maintain platform security.

Augur, unlike other blockchain projects, can increase the friction associated with storing native tokens in order to create a more reliable platform. Embossing a REP to support an auction of price filing means that individual tokens can lose real value and purchasing power over time due to inflation, which can negatively impact long-term value investors. However, chasing will help improve and develop a new pricing model.

The "don't participate in the giveaway - lose all your tokens" protocol may mean that REP becomes a risky investment for some. 60 days of not seeing what's going on inside the Augur network and marketplaces could mean the user loses all REPs held, but it creates a more robust "if the Augur protocol forks" option and could incentivize more users to semi-actively participate in the Augur ecosystem. ,

It is unclear when Augur V2 will be released, but the development seems to be progressing well, and the code for the update is currently undergoing external audit.

Santiment recently tracked and listed the most active ERC20 token projects for development in April, and Augur (REP) ranked third after Storj (STORJ) and Status (SNT). Augur’s development activities last month were associated with a major update of the user interface, which will strive to significantly improve the Augur trading interface, as well as the backend and intelligent contract solutions needed for V2.

Network activity

Derived from the NVT relationship, the NVT signal is a metric for evaluating an adaptive blockchain developed by Willy Woo and Dmitry Kalichkin. Crypto markets are subject to speculative buying bubbles that are not backed up by basic performance and network activity.

The NVT signal gives some idea of ​​at what stage of this price cycle a token can be located.

A high NVT signal indicates a network that passes through one of these bubble periods and may move to an overbought / revaluation position due to speculative market assessments ending in a momentum.

The REP NVT signal has tested lower high / overbought points for the last year. This is a bullish long-term flag, which assumes that the volume of the REP chain is constantly increasing relative to the value of the token. NVTS, limited to a narrower range, offers a digital asset that matures and receives a solid base from the providers of bulk services within the network.

This model suggests that the disclosure of the price of an REP asset may improve, and “steady growth, despite mediocre UX,” a bullish, long-term narrative suggested by Nick Tomayno may be valid.

Since the end of February, the price has steadily increased and was accompanied by a steadily falling NVTS line, a strong bullish flag. This model means that the volume of the chain is growing faster than prices, and suggests that factors pushing the price forward also create greater demand for REP transactions.

The buzz around Augur V2, which is impossible to use, can create a demand for interaction. REP can also be borrowed in the decentralized financial application Compound and is the third most borrowed asset of the platform and the most borrowed ERC-20 token. The REP amount borrowed through Compound is currently ~ 100 000 USD.

PMR Signal

Metcalf's law is a measure of network connectivity, as established by Robert Metcalf, the founder of Ethernet. Subsequently, it was used to analyze the real value of online financial products such as Facebook and Bitcoin. Comparing it with the price, it can provide a useful tool for assessing whether the token is overvalued or undervalued.

It is also a simpler measure to evaluate compared to the volume of transactions within the network, which can be difficult to accurately measure in US dollars. Addresses are measured as the number of unique sending and receiving addresses participating in transactions daily.

The PMR value for REP has historically been high, ranging from 6 to 8 natural logarithmic points since the launch of the token. This means that the value of the token / market capitalization far exceeds the number of active REP addresses.

This suggests any potential network effects in the REP ecosystem; positive externalities, such as increased liquidity, when organic growth of users creates more counterparties to trade, are minimal.

Thus, it appears that the relationship between price and PMR is not a useful indicator and is due solely to the value of the token, and not the active addresses.

The Augur platform will have to solve liquidity problems and the problems of chicken and eggs that it currently faces. This should increase the demand for oracle services to such an extent that the network effect is created, and the active growth of addresses begins to have a tangible impact on REP prices.

Exchange and trading pairs

The most popular trade option for a REP is BTC, in which a pair processes around 72% of daily trading volumes. The second most popular market is the REP / ETH pair. Together, the top two pairs account for more than 90% of daily trading volume. Fiat's REP operations are also available in US dollars, euros and Korean won. The daily value of the entire REP REP market in US dollars is only ~ 10,5 million USD.

Markets on the LAToken exchange dominate the REP trading ecosystem, processing the top two pairs in the ecosystem. REP can also be traded on large, reliable exchanges such as Coinbase Pro, Binance and Poloniex.

Conclusion- Technical Analysis

Moving averages and momentum prices

On the 1D graph, the REP followed a negative linear price trend with Pearson R correlation between time and price ~ 0,75 (not shown), which allowed the death cross to persist until 5 April 2019. Currently, the gold price cross holds around $ 20,13 and potentially forms another breakout triangle.

In addition, on the 1D chart, the price closely followed the Fibonacci retracement levels and is currently at the Fibonacci 1.618 level. If this level continues, the price is likely to retest the previous resistance in the 23 dollar before testing the Fibonacci 2,618 in the 28,91 dollar.

Finally, on the 1D graph, the volume flow indicator (VFI) is still well above 0, with a positive trend that remains unchanged, despite the recent price weakness. This power of shopping, combined with solid levels of support for the 1.618 Fibonacci level ($ 19.99) and 50-day EMA ($ 18.74) portend good prices.

Ichimoku clouds with relative strength indicator (RSI)

The Ichimoku Cloud uses four metrics to determine if a trend exists; current price in relation to the Cloud, the color of the Cloud (red for bearish, green for bull), cross Tenkan (T) and Kijun (K), Lagging Span (Chiku) and Senkou Span (A and B),

The state of the Cloud's current metrics on a 10D frame with single settings (30/60/30/XNUMX) for faster signals is mixed: the price is above the cloud, the cloud is bullish, the TK cross is bearish, and Lagging Span is a touching price and above the Cloud.

The traditional long entry can occur with a price break above Cloud, known as the Kumo break, with price holding above Cloud. From there, the trader will use either Tenkan, Kijun, or Senkou A as a trailing stop.

The price originally completed the Kumo breakthrough in mid-January 2019. Since then, the price has remained strong, despite periodic repeated protests of Cloud support (arrow). Currently, the cost of re-testing cloud support is $ 19,99.

However, there are several potentially positive factors for a REP:

  1. Cloud support is the same as Fibonacci support.
  2. VFI is still in favor of bulls
  3. The RSI is currently at a decent level of 49.

If the story repeats and the breakout persists, the price is expected to retest the previous resistance in 23 dollars, with possible future targets in 25,47 and 28 dollars. If the break does not take place, the support levels are $ 19, 15.50 and 14.23.

The state of the current Cloud metrics on a one-dimensional timeframe with double settings (20 / 60 / 120 / 30) for more accurate signals is bullish: the price is higher than the Cloud, the Cloud is bullish, the Cross TK is bullish, and the Lag Span is above the cloud and the touching price.

Slower settings give similar results to the price that is currently at the Cloud support level, with similar price targets and support levels.

Conclusion

Despite the fact that a full-fledged product for the core network, released almost a year ago, Augur is still an immature platform, with fewer 500 users running per day, as well as a number of tasks that UX has yet to solve. The lack of users and liquidity in Augur influenced the main usefulness of the REP token, reducing the importance and demand for its oracle services.

However, the growth of basic and peripheral infrastructure was impressive. A number of applications created on the basis of Augur and released last year, significantly increased the usability of the platform. Augur V2 is coming soon, which can help satisfy a number of criticisms regarding the platform and help Augur connect to the new user base.

The latest technical indicators for REP support bulls, but bears should not be considered until key support levels are reached, i.e., 1.618 Fibonacci, cloud support and 50-day EMA. On a 1D chart, both the fast trader (10 / 30 / 60 / 30) and the slow trader (20 / 60 / 120 / 30) trader will expect prices to keep the current Kumo breakthrough above $ 19-20 before than to get into a long position Success will bring target prices 25,47 and 28 dollars. Failure will highlight support levels in 19, 15, 50 and 14,23 dollars.

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