Augur is a decentralized oracle and peer-to-peer protocol for prediction markets on Ethereum that lets anyone create a market around the outcome of any real-world event. Augur has a native ERC20 token (REP). Users don’t need REP to trade (ETH is used for that). But, market creators need REP to post no-show bonds. Also, REP is used to dispute market outcomes or buy participation tokens (redeemable for a portion of ETH reporting fees collected during fee windows).
Users trade on an event’s outcome by buying and selling shares in the event’s market. Share price reflects the probability of a particular outcome. Users with shares representing a winning outcome can settle with Augur’s smart contracts or sell their shares to other traders.
To create a market, a user must (1) name someone to report the outcome at the appropriate time, (2) post a no-show bond (returned if the designated reporter acts properly and claimable by any reporter if not) and (3) post a validity bond (in ETH), which is refunded if the market is valid. Market creators may also set a creator fee - a percentage of settlement fees (in ETH). Once the event has occurred and outcome has been reported, any person who disagrees with the reported outcome can invoke the dispute process defined by the Augur protocol.
How to use Augur?
The best way to use Augur is by downloading the native Augur app and syncing to the network, or you can try Augur's web app. Both are at augur.net and give you full access to the Augur protocol. To create a market, you'll need some REP and a small amount of ETH.