Augur: A New Financial Primitive

Shares in Augur markets represent exposure to or insurance against any future state of reality. They are a new financial primitive.

These shares are transferrable, borderless, programmable, and uncensorable. Anyone, anywhere, at anytime can buy, sell, exchange, or even gift these shares to anyone else.

Just as lending, exchange, and stablecoins are essential building blocks for a new, open financial system, so too are outcome shares.

These shares may concern any verifiable outcome: an election, next quarter’s GDP, the future price of a financial asset etc. They may pay out all or nothing or in a scalar fashion to allow the creation of financial synthetics.

Other protocols and apps may use outcome shares as “lego pieces”, as they live on Ethereum. For instance, you could use them to create a liquidity pair on Uniswap or to compose a Set on TokenSets.

Markets that trade outcome shares, sometimes called “prediction markets,” have three primary powers:

Predict the future: the price that outcome shares trade at signals the perceived probability of an event occurring.

Prepare for the future: traders may buy or sell outcome shares to hedge risk or insure against adverse outcomes.

Persuade” the future: market actors may buy or sell outcome shares to incentivize future actions via bounty creation.

In the years to come, builders will use this novel financial primitive to make things we cannot even yet imagine.

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Augur shares are a new financial primitive
A glimpse at Augur v2