“While amateurs go broke by taking large losses, professionals go broke by taking small profits.” William Eckhardt
Grab your coffee or boba. It's time to talk Augur.
I just published my 20 Augur Predictions for 2020, which should be a fun read.
Bringing Non-Crypto Natives Onto Augur
Augur may be one of the first DApps that mainstream, non-crypto "natives" use without realizing that they’re using crypto or even knowing what crypto is.
In the same way that you can drive a car without knowing how an internal combustion engine works, you'll be able to use Augur without knowing the first thing about Ethereum, blockchain, or decentralization. You won’t even need to realize that Augur is decentralized, because the oracle will work about as seamlessly as a central operator.
Censorship resistance/decentralization may be Augur’s most important feature in that it lays the foundation for everything else, for all of its advantages around liquidity and the foundation for devs to build on it but the typical end-user could care less about it. All they care about is odds, limits, and fees.
In fact, the crypto and decentralization part may be a net negative from a messaging, “PR” perspective. A common reaction you get from the more informed PredictIt folks when you mention Augur these days is “you have to use crypto, right?” or “oh that’s the weird crypto thing?” Crypto is alien and untrustworthy to the uninitiated.
V2 will be a big leap forward in abstracting away crypto from end users. First, DAI will let you trade on Augur without being exposed to the volatility of your typical crypto coin. Second, the onboarding flow for first-time users of creating a wallet and obtaining DAI will be little different from the flow of creating an account and transferring USD from your bank in a traditional web app like PredictIt. Third, the top, most visible markets will concern mainstream outcomes, specifically politics, not outcomes purely of interest to crypto folks like the price of Bitcoin next month.
The marketing around Augur is also shifting away from crypto lingo, which I think is a good move. If I didn’t know anything about crypto the word “trustlessness” might scare me away (there’s no trust??), “permissionless” might confuse me, and “peer-to-peer” might make me concerned, “so there’s nobody managing this thing!?”
I think the v2 UI eventually can and should go even further in concealing anything related to crypto and decentralization from the average user's view. Things like reporting, disputing, and Invalid prices need to be *somewhere* since they are key functions...but only for niche users. For the average user, they likely lead to more confusion than clarity.
Hey reader, if you haven't yet sign up here to get this newsletter and fresh Augur insights each week.
The Bizarre Iowa Caucuses
Maybe one way to get an edge is to do something so boring that few others will bother. One reason I've been slogging through the Iowa 2020 Delegate Selection Plan, the 74 page doc detailing how the state's caucuses work. Honestly, I don't recommend reading this unless you're hardcore into politics and/or betting on politics.
I didn’t realize how bizarre, complex, and arbitrary the process is. And also how *social* it is. You basically have roomfuls of people breaking off into groups according to their favorite candidates and than trying to persuade others to join their group. In most districts, a candidate must get support from at least 15% of caucus-goers to lock in delegates. If a candidate doesn't hit 15%, then his or her supporters can try to win over folks from other camps or disband and shift their support to other candidates.
What's the most popular second choice of caucus-goers whose first choice is unlikely to hit 15%? Which campaign has the most persuasive supporters? How will the weather on February 3rd affect turnout for different candidates' supporters? What effect will the new changes in Iowa, including the introduction of virtual caucuses, have on all this?
These are just a few questions that start to hint at the crazy complexity here and are the sort of factors that a mature prediction market would (attempt to) price in.
In the meantime, you can check out Guesser's new Augur market on the Iowa caucuses.
Thanks for reading, guys. Feel free to say hi with any thoughts or questions, and I hope you have a great rest of the week.