"There are no surprising facts, only models that are surprised by facts.”

-Eliezer Yudkowsky

Grab your coffee or boba, for it's time to talk Augur.



Each Tuesday on The Augur Edge, I share one Tweet, one trade, and a two-minute musing on something I’ve been thinking about Augur.



Let’s plunge in.

Augur vs. PredictIt



I use both Augur and PredictIt, the centralized prediction market. I started using PredictIt (PI) in 2016 and Augur on the first day it was launched in summer, 2018. I believe that Augur is the future, but that PI is still superior for certain use cases.



I think Augur and PI will both be successful in 2020 and shine in different areas, first coexisting as complementary platforms before becoming competitors. It appears PI is already buying search ads for folks who google "Augur" - crazy!



I've never seen a meaningful exploration of the pros and cons of Augur vs. PredictIt. So here's my attempt.



Some of these are big things, some small. Some obvious, some not. The focus is on user experience and growth prospects. Many of the pros and cons of PI apply to other centralized prediction markets, not just PI.



**Starred Items** are what I consider the most underappreciated factors. Not necessarily the biggest ones, but the most overlooked. Advantages of Augur No Limits . Traders on PI can put up to $850 in a market outcome. Augur is limitless.

Lower Fees. PI charges 10% fees on trading profit + a 5% withdrawal fee. Augur has ~1% trading fees and zero withdrawal fees.

**Incentives + ability to build on it** I see this as the most underestimated advantage of Augur. I think the trifecta of Open Equity (anyone can get a stake in Augur's success via REP) + Open Source (anyone can access and build on Augur's code base and API) + Open Data (all transactions visible on Ethereum blockchain), will lead to a renaissance of products and services built atop Augur that will make it easier to use and more powerful. We've already seen some I see this as the most underestimated advantage of Augur. I think the trifecta of Open Equity (anyone can get a stake in Augur's success via REP) + Open Source (anyone can access and build on Augur's code base and API) + Open Data (all transactions visible on Ethereum blockchain), will lead to a renaissance of products and services built atop Augur that will make it easier to use and more powerful. We've already seen some cool things

Censorship Resistance. Markets like PI can only be accessed in some countries and can be shut down at anytime. Many centralized platforms (not PI) are notorious for banning winning bettors or limiting their bet size. Augur has no bookies and can be accessed anywhere by anyone. It is more resilient to regulation.

Custody. PI controls traders' funds. Augur doesn't.

**Affiliates** I think Augur's upcoming I think Augur's upcoming affiliate incentives could create the most powerful decentralized marketing engine the world has ever seen, though I think it will take some time to take off.

Anyone can create markets. On PI, only its operators can.

**Scalars** PI doesn't offer scalar markets. Augur does. I think they will be huge in the long term.

Precision. PI denominates orders by cents, while Augur enables greater precision. For example, on Augur you could sell shares at .2345 but on PI you'd need to round to .23 or .24.

Global Liquidity. This is a property that emerges as a result of all the above. Advantages of PredictIt Speed + Scalability . Transactions on PI are faster and more trades can be processed, quicker. 0x + sidechains will be huge for Augur on this front.

Cheaper for Small Trades. Unless you're trading large quantities, gas fees can be prohibitive on Augur. PI is cheaper for casual trading.

**Market Flexibility** Augur markets have set-in-stone outcomes and set-in-stone end dates. PI markets can have TBD end dates and can add in new outcomes at any point. For example, PI may add in new candidates to the demnom market as they enter the race. The immutability of Augur markets is a double edged sword.

Onboarding. Unlike Augur, you don't need to obtain ETH or DAI to trade on PI.

Market Quality. PI markets have clear terms and trivial risk of ambiguous resolution.

Payout speed. PI markets pay out right away. On Augur v1, you may have to wait weeks or months. This improves in v2.

**Simplicity** Augur has a lot of moving pieces and technical complexity. PI is a Toyota Corolla, while Augur is a rocket ship. The latter is more powerful...but also riskier.

More categories per market. Right now, Augur accommodates up to 8 outcomes per market. PI markets can have more.

**Social** PI has social built in, Augur doesn't...yet. Social ups engagement and drives network effects. There are already over 800,000 comments on PI's 2020 demnom market

First Mover. PI was first to the game and has built a dedicated user base. Whew okay... that turned out longer than expected. Am I missing anything?



Ultimately, I believe that Augur's limitations are all solvable. You can engineer efficiency into a decentralized technology, but you can't engineer trust into a centralized one.

Weekly Tweet







Ryan Berckmans, the creator of predictions.global and a former colleague, is someone whose opinion I hold in high regard. I agree with his bullishness and his long-term focus. I think that 2020 will be a breakthrough for Augur, but that things won't enter full swing until around the next election cycle.



The success of Augur v2 depends on the timing of its launch and how many bumps in the road we encounter. With a timely and smooth-ish launch, I think we could see well above $10M on the 2020 election.



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Weekly Trade You can see my Augur trade history here.



Heading into v2, things are quiet on Augur, so my trading focus is on PredictIt right now. My main positions remain long Bernie and Mayor Pete in demnom markets, but I added a new position this week...



I bought Klobuchar YES shares in the Demnom market at ~3 cents and in the General election market at ~2 cents. This is intended as a hedge for my Mayor Pete position, as well as a short-ish term play. I don't think she's getting the nomination, but I think she will bounce in coming weeks.



Her polling is showing a hint of life lately, especially in Iowa. This Thursday, she'll compete on a debate stage where she has a better shot at standing out, now just one of two women, and facing two moderates, Biden and Buttigieg, both shrouded in electability concerns. Against Buttigieg, she's another midwestern moderate, just with more experience. Against Biden, she's another no-nonsense middle-of-the-roader, but younger and sharper. Of course she has liabilities too, and I don't think she has staying power.



But in the next month, I think she could pick away some educated white voters from Buttigieg, older voters from Biden, and women voters from Warren who prefer a female candidate, just one that's "electable."



She also seems to be running better ads lately.



I also think Yang could get a polling bounce, but he is so overpriced relative to his polling that I'm not buying until he shows more traction (though I do have some Yang shares lying around for Iowa from a while back cause, you know, YOLO).



Note: this isn't trading advice, just a look at what I'm up to. I probably have no idea what I'm talking about here.



Say Hi I love hearing from readers, so shoot me an email if you have any thoughts or questions or just want to say hi. Happy predicting and best from Puerto Escondido Mexico,

Ben