Binance Research reported on 01 April about non-uniformities found on Augur, a decentralized prediction market platform built on top of Ethereum.
Binance Research commenced by expressing that though Augur had kindled questions about the legality of prediction markets, the platform itself needs investigation. The report further highlighted several issues currently faced by Augur. These include low liquidity and participation rates, plain usability functions, complex voting, settlement, and forking mechanisms.
Binance Research attempted to explain about Augur in simple jargon. Augur is a decentralized prediction market platform that allows an individual to create a prediction market. The user can simulate the outcome of any event, such as a result of a soccer game, the winner of a presidential election, or even the future price of a cryptocurrency.
Binance Research cited on the inherent flaw as –
“An actively traded market – expiring on April 1st – is currently facing an attack – a “design flaw attack” in which a malicious market creator may design a market with the intention of exploiting a purposeful flaw. Even so, several outcomes can occur during such an attack, without risk.”
Binance Research expressed that prediction was one of the best use cases for blockchain. This was backed by the fact that blockchain is trustless and without a mediator. Blockchain-based prediction is also free from the bonds of potential governmental actions and censorship.
Binance Research touched upon the existing issues with Augur. It started off with the general issues in which users must download the Augur app and rely on one of the web user interfaces (UI). The potential issue is that on these websites, the UI offers many sorting and filtering methods which may lead to certain markets receiving more exposure than others.
Binance Research threw light on technical issues faced by Augur. These include user’s preference of markets with low spreads and high volumes. This would lead to a monopoly on the few markets. There was also the problem of creation of bogus markets which could hamper existing features.
Last month, Binance shared news about its partnership with IdentityMind, a risk management and compliance platform. Likewise, Binance announced the launch of Binance Lite Australia. The platform allows a seamless way to buy Bitcoin with cash in the land down under.
Binance Research finally touched upon potential improvements that were in the pipeline for the second version of the platform. Some of these creative approaches include a clear reference in the definition of a market and market validators prior to the formation of any new market.