Hyped Crypto Prediction Market Augur Isn’t Looking So Hot

When the decentralized betting market Augur finally launched in July, after a two-year beta period, there was no shortage of hype surrounding it. Users would be incentivized by cold hard crypto to forecast the correct outcomes of everything under the sun. Would France win the World Cup? Would Ethereum co-founder Vitalik Buterin get a girlfriend by the end of 2018? Pressing questions demanded crowdsourced answers!

Augur saw around $400K in betting on its first day, leading some to conclude that it might be the new CryptoKitty on the block. (CryptoKitties, the collectable cat game, is considered to be the Ethereum dapp to beat. It’s generally been the market leader since December.)

Recently though, things are looking less rosy, with The Next Web reporting yesterday that a serious vulnerability was discovered in Augur. The bug meant that a specific type of attack known as “frame-jacking” could be carried out, allowing a malicious hacker to feed a user misleading information. Augur paid $5,000 to the security researcher who identified the bug, and the vulnerability has been patched, but the news is just the latest in a series of dispiriting reports about the platform.

The first wave of panic occurred when people realized that a market where you can bet on anything really means that users will indeed bet about everything. It didn’t take long for individuals to start wagering on the deaths of various public figures, from Donald Trump to Jeff Bezos.

To be fair, hardcore crypto folks weren’t surprised by this:

Obviously this becomes problematic if someone is incentivized to take out a hit on someone because she wants the crypto rewards of the betting pool. Right now, however, it seems unlikely that anyone will actually do such a thing. Why? Because of the other unfortunate reason that Augur’s been making headlines: Very few people are actually using it.  

Augur had a whopping 30 users over the past 24 hours, according to DappRadar. All dapps have a tiny userbase, but the numbers are especially unfortunate for a platform that is intended to harness the intelligence of the crowd to make predictions.

There are a number of reasons for this problem including liquidity and the fact that you have to understand crypto to use Augur. That’s not to say that users won’t eventually come. Augur’s co-founder Joey Krug told CoinDesk that he is optimistic. “I imagine lots of people tried it and decided they’d come back in six months to a year when it’s more mature.”