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Augur [REP]: Prediction market opens up about defeating its largest attack




Augur [REP]: Prediction market opens up about defeating its largest attack
Source: Unsplash

Augur, one of the leading prediction markets in the cryptocurrency space, has often been on the list of the most popular dApps on Ethereum. Notably, even well-known influencers such as Vitalik Buterin, creator of Ethereum, Arianna Simpson, Founder and Managing Director of Autonomous Partners, and Benjamin Roberts, CEO of Ether Capital Corp, have spoken highly of the project.

Nevertheless, the project launched in 2018 was in the limelight earlier this year because of a flaw that was reportedly being exploited. Now, the developer team behind the project has released an official blog titled, ‘Defeating Augur’s Largest Attack,’ detailing the exploit and the fix for it.

The blog post stated,

“[….] [Augur V1] has faced one pressing attack vector: invalid market scams. Bad actors, or at least one prominent trader, have gamed the system to deliberately create and profit off of invalid markets at the expense of other traders. This attack vector was known before V1, but due to a technical issue, it was successfully exploited by scammers.”

The post then expanded on the attack in the prediction market. The post stated that in the Yes/No market of Augur, a user had the option of either buying into the Yes side of the prediction market or the No side of the prediction market.

Usually, when the event the market is betting on occurs, then the individuals who chose Yes would end up with one Ether, and the people who placed their bet against the event from occurring by choosing No would end up with no payout. But, if the event the market is betting on does not occur, then the people who chose No would end up with 0.50 Ether, and the ones that bet on its occurrence would end up with nothing.

Interestingly, if the event the market bets on turns out to be “ambiguous or unverifiable,” then it would be considered an “Invalid” market, thereby resulting in both sides of the bets being paid 0.50 Ether. The blog stated that “Invalid scam involves creating markets that appear valid on the first glance, but are actually Invalid.” This includes closing the market before the outcome is revealed. Notably, this attack could be applied to other markets as well, such as categorical markets and scalar markets.

The team stated,

“The market creator (or other traders) then place orders for cheap YES and/or NO shares for under .50 Ether a pop. Traders who do not realize the market is Invalid or do not understand how Invalid markets work then buy these shares, and the scammers net a profit when the market resolves.”

In order to counter this issue, the team released a new version of Augur App, which includes three main updates, new market sort and incentivization of liquid and valid contracts, invalid filter, tradable invalid, and invalidity bond. The post added,

“We expect that these improvements will not just solve this issue for good but also make Augur a more reliable and robust protocol in general”

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Priya is a full-time member of the reporting team at AMBCrypto. She is a finance major with one year of writing experience. She has not held any value in Bitcoin or other currencies.


Facebook’s Libra is a double edged-sword, but will benefit Bitcoin, says Caitlin Long





Facebook's cryptocurrency Libra is a double edged-sword, but will benefit Bitcoin [BTC], says Caitlin Long
Source: Unsplash

On 18 June, the world’s biggest social media platform, Facebook, introduced its new cryptocurrency, Libra, set to launch in the first half of 2020. The coin that would have its own blockchain will be backed by several sovereign currencies, and these reserves would be managed by the Libra Association. The association will also be engaged in several other key activities, which would focus solely on the development of the Libra ecosystem.

Notably, the coin has brought together major players in both the financial and technology industry including, MasterCard, Paypal, and Coinbase. Despite such strong backing however, the concept of the coin was soon shot down by several influencers and government authorities.

The French Minister of Finance and Economy, Bruno Le Maire, released a statement asserting that Facebook’s digital currency becoming a sovereign currency was “out of question,” adding that “it can’t and must not happen.” Along with this statement, the Finance Minister also raised concerns about money laundering and terrorism funding and urged G-7 countries Central Bank Governors to draft a report on the new “global currency” for their meeting in July.

Further, Facebook’s cryptocurrency is also facing hurdles in its native country. Maxine Waters, Chair of the House Financial Services, has requested the social media giant to hit the pause button on the development of Libra, until Congress and regulatory authorities hold a discussion on the digital currency. This request was put forth mainly because of the firm’s “troubled past.”

In an interview with WhatBitcoinDid, Caitlin Long, Co-founder of the Wyoming Blockchain Coalition, stated that Libra had its pros and cons, adding that it was a “double-edged sword.” However, the blockchain evangelist continued to assert that this was going to benefit Bitcoin, stating that the social networking platform was “making cryptocurrency a mainstream word.” She added that Facebook would introduce the concept of digitally scarce money to people and that these people would look for the best cryptos that would retain the most value over time. That crypto was going to be Bitcoin, she said.

Long stated,

“This is a detour kind of like Andreas analogy, it’s the intranet before internet. We’ve even seen it in this industry, it’s blockchain not Bitcoin but people are coming full circle back around to Bitcoin. These are detours that are ultimately helpful to gaining adoption and wider support, but they’re not where we end up and I think we will end up in Bitcoin.”

Further, Long was asked whether Libra was going to be its own currency, considering it will not be pegged to a specific currency, but several fiat currencies. To this, she stated that Libra was indeed going to be a currency of its own, similar to Bitcoin. She stated that it was going to function like a “central bank,” remarking that it would be a “private version of a central bank.” Long went on to add,

“They’re going to be managing reserves against the liability. For them it will be the people who own the coins and they will be managing the reserves against that […] they are going to be marketing this in the developing world, this is going to be a developing world concept probably more than a developed world concepts […] so my guess is this is mostly an emerging market phenomenon secondarily a European phenomenon and lastly a U.S. phenomenon.”

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