Reputation Token (REP)
A tradable asset numbering 11 million tokens whose possession makes its owners the reporters of Augur’s platform. Each token entitles its owner 1/22-millionth of all market trading fees in return for faithful reporting on market outcomes. Below is a guide to REP tokens.
Anyone that has a Reputation Token. Reporters vote on the outcomes of Augur prediction markets that have reached their expiration dates in order to resolve the market. Reporters lose reputation tokens if they report false results and are paid for their labor with market trading fees. Reporters lose up to 20% of their reputation tokens if their reports conflict with the final consensus.
Augur has an internal digital token called Reputation that traders and market creators don’t need to know about or use. Demand exists for the token because ownership is the only way to obtain half of the fees on the Augur platform. A limited supply exists of 11 million due to mathematical proof of ownership and a consensus of honest transaction validators. Ownership of Augur reputation grants the right to be paid in exchange for providing information to Augur. Ownership of Reputation is conditional and will be confiscated if you fail to show up for work or report information that conflicts with the final consensus. Each reputation token you own grants you a 22 millionth of all fees on Augur.
Reputation comes with a limited scope of work requirements. At the start of a reporting period markets are assigned for you to report on. You are required to report on all markets assigned before these 30 days end. Failing to report on some markets will have a chance of fining you up to 20% of your reputation
Afterwards there will be a 29 day reveal period. To fulfill your obligations for the reveal period you must simply log in once during these 29 days. There are no other work obligations. If you choose to take a vacation, your reputation can be moved to the dormant state. Once dormant your rep cannot report, cannot earn trading fees, and is not subject to redistributions.
Reputation has the following traits:
- Can be sent between anyone’s accounts.
- Balance is independently determined by Augur.
- Total quantity of 11 million created and distributed upon system launch in accordance with the original terms of the 2015 crowdsale.
- Divisible by 10^18.
- Grants owner voting power on market resolutions.
- Power proportional to stake to vote on development decisions of Augur.
Reputation can decrease for the following reasons:
- Committing to an outcome that differs from the final outcome of a market.
- Failing to report on assigned markets while reputation is in an active state.
- Purchasing a fork bond.
- Sending reputation to another address (including, but not limited to, trading it through a cryptocurrency exchange).
Reputation can increase for the following reasons:
- Committing to an outcome that is the same as the final outcome of a market when others did not.
- Reporting on assigned markets when others did not.
- Posting and winning a fork bond.
- Receiving reputation from another address.
The role of a reporter is to report on the outcome of expired markets for the purpose of revaluing the remaining shares. Explained below are the costs benefits and general strategy for reporters.
- Opportunity cost of owning reputation.
- Labor cost of reporting on markets.
- Financial cost of failing to report on assigned markets.
- Financial cost of reporting against the consensus from other reporters.
- Decreases in the market value of Reputation.
- Decreases in the market value of currencies used for fee payout.
- Fees for reporting on markets.
- Financial reward for reporting on markets when others do not.
- Financial reward for reporting in agreement with consensus when others do not.
- Increases in the market value of Reputation.
- Increases in the market value of currencies used for fee payout.
- Quickly make determinations of market outcomes.
- Report on all markets assigned.
- Report in agreement with the consensus of other reporters.
- Support the growth of the Augur customer base.
- Convert income to currencies that do not decrease in value.