Redditors Call Out Reported Scam on Blockchain-Based Prediction Platform Augur
William Suberg's original article for cointelegraph.com reduced by 76%
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. 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. 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. 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.
"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." 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.
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