At least one scammer is reportedly gaming other users on the blockchain-powered event betting platform Augur by creating deliberately invalid markets, according to a Reddit thread published on March 20.

Created by the non-profit Forecast Foundation, Augur is an Ethereum (ETH) mainnet-based predictions platform, which launched in July 2018. The platform allows users to stake tokens to bet on predictions of the outcome of a given event.

The reported scam entails a bad actor creating a predictions market that contains subtle contradictions or inconsistencies in its wording, which will ultimately lead to the market being declared invalid, and all staked funds thus being distributed evenly between betters.

Meanwhile, the creator of the purposefully invalid market bets on outcomes that are unlikely to win, having vouchsafed for him- or herself a guaranteed payout when staked funds are eventually redistributed.

In the discussion thread, a redditor has posted an example of one such ill-intended market — entitled “Ethereum price at the end of March 2019?” Whereas the title and the additional details state that the prediction market expires at “end of day March 31, 2019 UTC,” there is a discrepancy with the actual listed expiration date, which is 1:59 p.m. UTC on March 31 — several hours earlier. This slight discrepancy virtually ensures the market will be flagged as invalid, while the subtle contradiction is unlikely to be picked up by most betters.

David Gerard, author of the crypto- and blockchain-skeptic book, “Attack of the 50 Foot Blockchain,” has tweeted his sardonic response to news of the alleged scam, writing:

“Augur users shocked, shocked to discover that statements in words may have exploitable ambiguities when computerised, and that this opens their system to SCAMMERS!”

In a thread of tweets, Joey Krug — a co-founder of the Forecast Foundation and core developer at Augur — has claimed that the community has exaggerated the scale of the scam, which he argues is not broadly rife across the platform and is largely confined to a single user.

Krug has nonetheless conceded that the existing mechanism by which to safeguard against such exploitative activity is currently malfunctioning, outlining that:

“The system in Augur has a built in way to combat this: a validity bond. The more markets are invalid the higher the bond goes, augur targets 1% of markets as invalid. Right now it’s 10%. Why? There’s a bug on chain in the calculation of this bond which makes it too low.”

Krug has suggested that in forthcoming version 2 of Augur, the issue with validity bonds will be fixed, and that new means to detect such practices will be enforced, so that invalid will be separately tradable and will be used as an auto-triggering filter to identify bad actors.

As previously reported, Augur has sparked controversy before when so-dubbed “assassination markets” surfaced on the platform, in which users placed bets on the deaths of a number of high-profile public figures.

To press time, Augur’s native token REP is trading at $14.95, according to CoinMarketCap.