Augur's market value is halved, and decentralized application coins are facing severe tests

The trading market did not respond well to the launch of the digital asset Augur.

Last week, the Ethereum-based prediction platform was officially launched, and its token (REP) was soon listed on popular digital currency exchanges such as Poloniex, Bittrex, and Kraken. However, the value of Augur tokens has been declining since it was launched, and many investors who are unaware of the truth have become "buyers".

Since then, some market observers have expressed their concerns about the viability of the Augur blockchain token and the viability of “app coins” in general.

Augur raised about 530万美元last year by selling its REP tokens. Augur launched its beta software in March, but investors were not able to freely trade REP until last week.

While some advocates say the ICO model represents a new way for startups to raise funds, some critics believe that so-called application coins are just a new name for "snake oil" (scam).

As for how traders view REP, the answer is less clear, but Augur still provides a valuable data point.

Soon after it went online, the price of REP began to fall sharply, opening at $13 on October 4 and falling to $6 on October 6. As of press time, the average price of REP is around $6.50.

Initial transactions

According to data provided by CoinMarketCap.com, Augur quickly entered the top 10 of the digital currency market rankings after it went online for trading.

Although the current REP market value is approximately $62.8 million, this figure has fallen significantly from its all-time high of $119.7 million on October 5.

Arthur Hayes from BitMEX believes that despite the decline in the value of the Augur token, its launch has been largely a success.

“I don’t think it’s a setback,” he told CoinDesk. “The token is still above what it was at the ICO.”

Looking ahead

The future of the REP token will largely depend on two factors: adoption and regulatory scrutiny.

Some believe that Augur may face tough regulation, such as the prediction market Intrade, which was forced to shut down in 2013 due to pressure from the US government.

Eliosoff said:

“Any prediction market that takes off could potentially attract trouble and draw regulatory attention to betting activity.”

He went on to argue that even if the Augur platform avoids this regulatory risk through its decentralized governance model, Augur’s decision to abandon Ether and enable its own application coin could weaken its security.

Of course, there are different opinions in the market. Olaf Carlson-Wee, founder of digital asset hedge fund Polychain Capital, said:

“REP is the first Ethereum token to gain traction on exchanges, but it won’t be the last.”