Their platform monetarily rewards you for accurately predicting events. This happens by trading shares for the predicted correct outcome of a real-world situation, such as an election. If you believe a candidate is going to win, you buy shares in that event happening. If that event does occur, proving you right, then the total monetary pool is distributed among all shareholders who predicted the outcome correctly.
Augur believes that this will lead to the platform being able to correctly forecast events based off of group sentiment that can be deduced from the data aggregated on the platform, which can be more accurate than an individuals prediction.
REP (which stands for reputation) is Augur’s token. It is an ERC-20 token built on the Ethereum network. It is intended to be a tool for Augur’s prediction market to work appropriately by securing the network via a variety of incentives.
Not everyone using the prediction market will hold REP. If you do hold REP, you are expected to accurately report randomly selected events every month or so. If you do not accurately report on these events or you lie about the outcome, then your REP is redistributed to accurate reporters during that same cycle.
Therefore, reporters rewards are in REP. So this means that you do not need to hold REP to be able to predict events. Rather REP holders are the reporters of the outcome of those events. You can use stable coins and Ether to place the bets on the prediction of events.
Augur is it’s own platform, but it is built upon the Ethereum blockchain. You can use other crypto-tokens to place bets on the network. Although, it is Augur’s own currency, REP – an ERC20 token- that is the reward and reputation tool.
Augur’s main competition is Gnosis, another prediction market platform, which you can learn more about here!