Why A Crowdsale Is Necessary For Augur To Work & Some U...

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Why A Crowdsale Is Necessary For Augur To Work & Some Updates

by Tony Sakich

We would like to emphasize why we are using a crowdsale to distribute the Reputation Tokens necessary for Augur to work. Ideally we would have used a different distribution method besides a crowdsale but a crowdsale is needed for the decentralized oracle system used by Augur to ensure proper event reporting.

Those who purchase Reputation (REP) will also be given the responsibility of accurately reporting event outcomes to Augur. To ensure these outcomes are reported accurately, truthful reporting is rewarded with more reputation and failing to report or dishonest reporting is punished by causing the holder to lose reputation. If these Reputation were given away, it would provide less assurance that holders are reporting accurate event outcomes into the system, therefore making Augur prone to manipulation and essentially unusable. Basically, people tend to value more what they pay for.

The economic incentive for reporting the truth is the basis of decentralization within Augur and requiring reporters to purchase Reputation ensures they already have a financial interest in reporting and will report honesty to increase Reputation value.

Regarding the proceeds of the crowdsale, we wanted to express that Augur is a non-profit organization, therefore the funds collected in the crowdsale will go to the further development and maintenance of the platform. Further details on this can be found in our crowdsale blog post. We encourage everyone to be skeptical about any purchases they make. We felt it was important to highlight why a crowdsale was absolutely necessary and the vital function it serves to enable Augur to work. 

We have also received questions regarding public bookkeeping and it's important for us to provide transparency and show what funds are used for. We intend to make public our annual report at the end of each year and make our burn rate + current amount of funds public. as well If people want more specific than that, we can publish a csv of all of our expenses each quarter.

We also want to reassure those who are interested in creating markets and placing wagers in Augur that it will be open to absolutely anyone, Reputation tokens are only used by those who are responsible to report event outcomes. Anyone (with or without REP tokens) can create markets and trade in all markets.

It's important to us that the community is crystal clear with what we are doing and why we are doing it, so please contact us with any questions you might have and also consult our FAQ section.

In the spirit of full disclosure, the people who bought in early to the sale as noted in our previous post were Vitalik Buterin, Bo Shen, and Erik Voorhees.

Crowdsale Signups Open

Signups for Augur crowdsale accounts are now open at sale.augur.net if you'd like to signup prior to the sale start on the 17th. 

Referral Bonus Cancelled

After almost universal dislike of the referral bonus (as well as the fact that it essentially just adds an unnecessary barrier to entry to get a fair rep distribution by requiring practically everyone to just grab a link) we've decided to remove it.  The early buy-in bonuses will still stand; the referral bonus will not.  We're fans of the wisdom of crowds; the crowd didn't seem to like this one, and we think they're right. 

Early Buy-In Bonuses Adjustment

In accordance with the above, we've decided to change the early buy in bonuses to the following:
True Augur (15%): August 17- August 22, 12:00pm (EST)
Prophet (10%): August 22-  August 27, 12:00pm (EST)
Nate Silver (5%): August 27 - September 5, 12:00pm (EST)
Nostradamus (0%): September 5- October 1, 12:00pm (EST)
The early buy-in is a bit more fair method of distributing things to reward early purchasers, and doesn't require them to share referral links around to get a bonus.  The removal of the referral bonus also means early buy-ins aren't penalized unfairly from referrals.  

How to Generate an Ethereum Address

You can enter an Ethereum address to receive your rep anytime between now and the final launch of Augur.  You can change it anytime before then as well if you get a new address you want to use instead.

Note: Before the sale start on Monday it'll be possible to generate Ethereum addresses using the Augur sale site and client.  You can wait for that or follow the instructions below to generate an Ethereum address now.

1). Follow the steps under Geth for your respective operating system
2). Either in the terminal (OS X/Linux) or command prompt (Windows) type geth account new
3). Enter in a passphrase - make sure you don't forget this, write it down and save it somewhere safe!
4). Then it will output your address in the terminal or command prompt.  You can then copy paste that into the augur sale app at your convenience up until our live launch.
5). Next backup your key.  If on OS X go to ~/Library/Ethereum (Finder -> go -> go to folder or search), if on Linux go to ~/.ethereum, and if on Windows go to ~/AppData/Roaming/Ethereum.  Then copy the keystore directory somewhere safe and save the copy (maybe on Dropbox or a flash drive).  The keystore is encrypted with the passphrase you chose in step 3.  Now if your computer crashes and you lose all your data, your rep will still be safe!

Our sale address to monitor funds raised

Note: Do not send any funds to this (you cannot receive rep by sending directly to this address).  To buy into the sale make sure you do it from sale.augur.net starting at noon EST on August 17.  

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