• Press Releases
    • Submit a press release
    • Read All
  • Advertise
  • Contact us
Crypto.com Logo Crypto.com Logo
Bitcoinist.com
No Result
View All Result
  • Bitcoin
    • News
    • Price
    • Businesses
    • Acceptance
    • Technology
    • Investment
    • Regulation
    • Reviews
    • All Bitcoin News
  • Altcoins
    • News
    • Price
    • Ethereum
    • Ripple
    • Litecoin
    • EOS
    • NAGA
    • All Altcoin News
  • Tech
    • Blockchain
    • Security
    • FinTech
  • Industry
    • Press releases
  • Price
    • Bitcoin Price
    • Ethereum Price
    • Litecoin Price
    • Binance Coin Price
    • Monero Price
    • MimbleWimbleCoin Price
  • How to
    • Buy gift cards/mobile Top Ups with Cryptos
    • What Is Bitcoin?
    • Best Bitcoin Wallet
    • Bitcoin vs Ethereum
    • Why Use Blockchain Technology?
    • Bitcoin Cash ABC vs. Bitcoin Cash SV
    • How to Buy Cryptocurrency
    • Bitcoin Mining
    • Best Bitcoin Brokers
    • Best Bitcoin Forex Brokers
    • How To Earn Btcoin
    • What is Facebook Libra?
    • Ripple and XRP: The Complete Guide
  • Play Games
  • BET&WIN
  • Bitcoin
    • News
    • Price
    • Businesses
    • Acceptance
    • Technology
    • Investment
    • Regulation
    • Reviews
    • All Bitcoin News
  • Altcoins
    • News
    • Price
    • Ethereum
    • Ripple
    • Litecoin
    • EOS
    • NAGA
    • All Altcoin News
  • Tech
    • Blockchain
    • Security
    • FinTech
  • Industry
    • Press releases
  • Price
    • Bitcoin Price
    • Ethereum Price
    • Litecoin Price
    • Binance Coin Price
    • Monero Price
    • MimbleWimbleCoin Price
  • How to
    • Buy gift cards/mobile Top Ups with Cryptos
    • What Is Bitcoin?
    • Best Bitcoin Wallet
    • Bitcoin vs Ethereum
    • Why Use Blockchain Technology?
    • Bitcoin Cash ABC vs. Bitcoin Cash SV
    • How to Buy Cryptocurrency
    • Bitcoin Mining
    • Best Bitcoin Brokers
    • Best Bitcoin Forex Brokers
    • How To Earn Btcoin
    • What is Facebook Libra?
    • Ripple and XRP: The Complete Guide
  • Play Games
  • BET&WIN
Bitcoinist.com
No Result
View All Result
bitcoin price prediction 2019
Nexo

Augur Prediction Market Platform May Have Design Flaws

Emilio Janus by Emilio Janus
3 years ago
in Emerging Markets, Altcoin News, Blockchain, Ethereum, Markets and Prices
0

An analysis of irregularities discovered in the Augur decentralized prediction market platform has identified a number of design flaws. Namely, it identified a potential attack vector based on discrepancies between a market’s expiry date and its outcome date.


How A Prediction Market Works

A prediction market would seem an ideal use-case for blockchain, harnessing the trustless nature and lack of centralized control. Augur uses the Ethereum blockchain, and allows an individual to create a prediction market based on any definable event.

5 BTC + 300 Free Spins for new players & 15 BTC + 35.000 Free Spins every month, only at mBitcasino. Play Now!

The market creator defines the topic, end date, and potential outcomes, plus an adjudicator if so desired. Trading (denominated in ETH) continues until the event-end, at which point Augur token holders (or designated reporter) determines the outcome. Token holders stake their Reputation (REP) on the outcome and receive settlement fees.

Houston, We Have A Problem (or Two)

Aside from potentially-illegal markets, covering topics such as assassinations and terror attacks, there are some key fundamental issues.

BitStarz Player Lands $2,459,124 Record Win! Could you be next big winner?
Get 110 USDT Futures Bonus for FREE!

Owing to its steep learning curve, many Augur users rely on various web interfaces, which offer non-standard features and are open to manipulation. In particular, many users gravitate towards markets which appear trustworthy to others. This creates a feeding-frenzy around the few markets with reported volume, which the market creator may well have manipulated.

Disputed outcomes go to a voting procedure, with users staking REP, and receiving rewards if they choose the winning outcome. This incentivises users to vote for the most popular outcome, regardless of whether it is the true outcome. On top of this, the validity bond, which is lost if a market is deemed invalid, remains fixed, so bad actors can continual create bogus markets.

Potential Attack Vector

A recent example of how this system can be manipulated, was based on the ‘general price of Ethereum’ at the end of the day on March 31st (UTC). The market expired at 01:59 on April 1st (UTC+8), which is before the outcome date, which could cause this contract to be deemed invalid.

By creating multiple outcomes, one of which was unrealistic (ETH over $1000), and one seemingly easy to achieve (ETH between $100 and $1000), it just required a bit of wash-trading to lure punters in.

The attacker would then send a limit sell order for the ‘easy’ outcome, for a quote which is above the reward for an invalid result, but below that of a supposed ‘good deal’. Thus users will fill the order, unknowingly being potentially stuck in an invalid market.

An invalid market results in an equal amount of ETH going to shares of each outcome. In a three outcome market (the final outcome being ETH < $100), each outcome would be marked at 1/3 value. With the majority of participants backing the ‘easy’ outcome, a disproportion return would go to the ‘unrealistic’ backers.

Fixing A Hole Where The Rain Comes In

Whilst Augur has already identified several of the concerns, there has been no official announcement of improvement implementation. Meanwhile, users are still exposed to this kind of attack.

Indeed, the same creator has already made a new market with the same flaw called ‘Ethereum Price at End of April’. There are also copycat markets springing up to catch users unawares.

Until these flaws are fixed, users should probable consider Augur, ‘buyer beware’.

Will blockchain-based predictions markets realize their potential? Share your thoughts below!


Images via Shutterstock

ShareTweetShareShare

Sign Up for Our Newsletter!

For updates and exclusive offers enter your email.

I consent to my submitted data being collected and stored.
Emilio Janus

Emilio Janus

Related Posts

Terra

Terra Flaw: Ethereum Creator And Binance CEO Slam Terra Via Twitter

3 days ago
Crypto Corner: The Sports Slice

Crypto Corner: The Sports Slice

4 days ago
Crypto & Gaming: A Look At NRG’s Insights Report

Crypto & Gaming: A Look At NRG’s Insights Report

5 days ago
Riot Blockchain

Riot Blockchain’s Texas Expansion Could Use Power To Light 200,000 Homes

5 days ago
Stablecoins

Stablecoins Receive Queen’s Blessings As UK Braces For Landmark Crypto Legislation

5 days ago
Bitcoin

Bitcoin No Longer Rat Poison? Warren Buffett-Backed Nubank Unveils Crypto Trading

6 days ago

Bitcoin news portal providing breaking news, guides, price analysis about decentralized digital money & blockchain technology.

Bitcoin

  • News
  • Price
  • Businesses
  • Acceptance
  • Technology
  • Investment
  • Regulation
  • Reviews

Altcoins

  • News
  • Price
  • Ethereum
  • Ripple
  • Litecoin
  • EOS
  • NAGA

Categories

  • Blockchain
  • Security
  • FinTech
  • Technology
  • Trending
  • Breaking News
  • Press Releases
  • How to

Pages

  • Contact us
  • Editorial Policy
  • Advertise
  • Crypto Prices from Nomics
© 2022 Bitcoinist.com. All Rights Reserved.
  • Bitcoin
    • News
    • Price
    • Businesses
    • Acceptance
    • Technology
    • Investment
    • Regulation
    • Reviews
    • All Bitcoin News
  • Altcoins
    • News
    • Price
    • Ethereum
    • Ripple
    • Litecoin
    • EOS
    • NAGA
    • All Altcoin News
  • Tech
    • Blockchain
    • Security
    • FinTech
  • Industry
    • Press releases
  • Price
    • Bitcoin Price
    • Ethereum Price
    • Litecoin Price
    • Binance Coin Price
    • Monero Price
    • MimbleWimbleCoin Price
  • How to
    • Buy gift cards/mobile Top Ups with Cryptos
    • What Is Bitcoin?
    • Best Bitcoin Wallet
    • Bitcoin vs Ethereum
    • Why Use Blockchain Technology?
    • Bitcoin Cash ABC vs. Bitcoin Cash SV
    • How to Buy Cryptocurrency
    • Bitcoin Mining
    • Best Bitcoin Brokers
    • Best Bitcoin Forex Brokers
    • How To Earn Btcoin
    • What is Facebook Libra?
    • Ripple and XRP: The Complete Guide
  • Play Games
  • BET&WIN

© 2021 Bitcoinist. All Rights Reserved.

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy Center or Cookie Policy.