Three markets on Augur, a decentralized prediction market, amassed a total of $111,000 following the first U.S. Presidential Election Debate. Joe Biden is the favorite candidate, according to Augur users who are putting real money down to back up their opinions.
Augur Markets Rake in Election Bets
Augur is a prediction market that allows crypto users to create no-limit bets using simple questions about economics, politics, sports, and other sectors.
It has been buzzing with activity since the debate, and the official Augur project went as far as to create YTRUMP and NTRUMP tokens, which some users have taken to trade on Uniswap and Balancer.
— Augur (@AugurProject) September 28, 2020
Anyone can create a prediction market on Augur or bet on the outcome of established questions. The platform leverages incentivized consensus reporting to ensure that outcomes are honest and representative of reality. The reporter must stake a particular amount of REP, the platform’s native token, and DAI to keep them accountable for their observations.
Alternatively, if users suspect that the reporter is misrepresenting the truth, they can call upon the dispute system to absolve the reporter from their stake and enforce the correct outcome.
Prediction markets can be useful tools for determining a community’s sentiment for future outcomes. However, there are issues.
In the 2020 U.S. Presidential election, cryptocurrency users can only represent a small segment of the U.S. voter population. Foreigners, like those in Europe or Asia, can just as easily participate if they are so inclined.
Despite the assortment of nationalities likely participating in the most significant bet this fall, they appear to favor Biden. Cryptocurrency users have sharply lost confidence in Trump, as shown by their bets following the presidential debate.
This sentiment is especially visible on the FTX presidential futures contract, where the price of the TRUMP futures contract sharply dropped after the debate losing 8.11% in value per share.
FTX created six futures contracts for presidential candidates. These contracts default to $1 if the candidate wins, and $0 if they lose the race.
Regardless of the average crypto users’ political stance, as it stands, the upside is much greater if they put their money on the current president’s reelection.