Since the emerging crypto asset class is much like venture capital with liquidity, performing a quick market size analysis can provide insights into potential fundamental asset value.
Augur is a decentralized platform for prediction markets. On the Augur network, users can bet on future outcomes and be rewarded financially when correct. REP is the native crypto asset on the Augur network. REP is required to create a prediction market on the platform and to validate event outcomes. REP holders are rewarded with market fees when participating. There are penalties for falsely reporting outcomes (validating incorrectly).
Yes, live product as of today…positive
Strong, as a decentralized platform Augur is truly global in a way that centralized platforms cannot be (not subject to one jurisdiction) …positive
Strong, there are other decentralized prediction markets under development and centralized markets already exist…negative
Augur (REP) is a decentralized prediction market platform and therefore is similar to a derivatives market. REP can be valued based on a share of the global gross derivatives market value ($12.7 Trillion). At .5% share, gross transactions on the Augur network would be $63.50 billion by 2021. Charging a 1% fee to users would leave $635 million in total fees. We then take the yearly fees collected by REP holders ($57.72) and multiply by the average Price to Cash Flow ratio (P/CF) of the Casino and Gaming Industry (most recent figure is 5.48). We feel Casino and Gaming Industry investors and potential REP investors share a similar risk appetite when making investment decisions, and therefore would exhibit similar pricing/valuation behaviors.
Given the assumptions (above) the 3-year Augur (REP) price target is given below:
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