Crypto project Augur is a recently released decentralized application (dApp) that allows users to essentially bet on anything by creating prediction markets. Recently, so-called assassination markets have shown up on Augur for users to bet on whether certain people will be assassinated, including US President Donald Trump, raising questions about the legality and morality of the platform.
Augur provides users the ability to create prediction markets on just about anything and also allows users to take a financial position in those markets by staking cryptocurrency for a given outcome.
The platform provides an interesting new approach to both gambling by taking positions in markets for sporting events or elections for example, as well as allowing users to hedge investments in markets related to asset prices.
Augur functions as a decentralized Application (dApp) with no particular user in control of the markets being made or the positions being taken which are paid out through smart contracts.
Thus far the majority of markets and volume on Augur have been on predictions crypto-enthusiasts and the general public would be expected to bet on such as the future price of Ethereum or the winner of the World Cup.
According to Predictions.Global, a website that reports statistics on Augur markets, nearly $1.5 million has been staked in markets on the platform at the time of publishing this article and nearly 80% of the total is in the markets for the price of Ether (ETH) and REP (Augur’s own crypto token).
However, recently several markets have been created for predicting the death of celebrities such as US President Donald Trump, Senator John McCain and actress Betty White.
These so-called assassination markets could be seen as a way to incentivize obviously illegal activities given that users can take a bet on the outcome of the market and then go about making the event occur.
It should be noted that there has been little to no activity in these assasination markets to date.
Assassination Markets Test Decentralized Morality
These questionable prediction markets have caused some to question whether there should be an arbiter deciding what can and can’t be predicted on Augur.
In fact some sites that provide information about Augur markets, including Prediction.Global, have decided to censor these assassination markets and not display them to users.
However, Augur touts itself as fully decentralized and the not-for-profit foundation behind Augur, The Forecast Foundation. It lists on the FAQ page that they have “no power to censor, restrict, or curate markets, orders, trades, positions or resolutions” on the platform.
Although there actually was an ‘escape hatch’ in the code of Augur to allow all the funds in the platform to be frozen in cases of a hack, that ‘kill switch’ was disabled two weeks after the launch by transferring ownership of the smart contract to a generic address.
Happy two weeks! ? Ownership of the escape hatch has been transferred to the 0x000..0001 address.
— Augur (@AugurProject) July 24, 2018
So now that the training wheels have come off, it will be interesting to see if any increased pressure is put on the platform or the Freedom Foundation to police markets that could lead to illegal activities.
The platform itself does have a mechanism for policing contracts by way of users declaring a particular market as “unethical” which negates the opportunity for anyone to gain financially on the market IF that is what the majority of users decide.
— Toni Gemayel (@tonigemayel) July 23, 2018
So, what Augur has done is transfer the responsibility of determining morality of a particular market over to the crowd of users.
This is the benefit AND the risk with fully decentralized platforms; when you remove a trusted authority from the equation of financial decisions, you’re putting trust that the majority of users will do the right thing.
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