Augur launches as one of the top Ethereum decentralized apps and it had a lot of daily active users. However, it does not seem that this is the reality anymore. After being released on July 10, Augur had a good audience, so what happened?
This decentralized platform lets the users create and be on market predictions tied to events in the real world like the World Cup games or elections… or even murders, as a murder market has appeared soon after the product was launched.
It took three whole years for Augur to be developed and tested and the users all rushed to try this new technology, which even passed the famous CryptoKitties for a while in number of users. However, it should be noted that the user base of dapps is generally not very high at all. CryptoKitties boasts a “huge” number of around 300 daily users.
Augur Falls In Ranking
Unfortunately, Augur has lost its position over the weeks and slipped in the ranking of the most used Ethereum decentralized apps. At the moment of this report, it had 66 users in the last 24 hours and it ranked 22nd according to DappRadar.
Some users have even raised some uncomfortable questions about the price of the REP tokens that are used by the company. According to the founder and CEO of Epiphyte, Edan Yago, a Bitcoin-based company, which is a user of Augur, their price is overrated.
According to Yago, Augur is good and he likes what the company represents but how can the protocol have a value of $308 million if it only has 64 daily users? That would be $4.8 million per user. This raises some concerns for how useful this type of metric is exactly and, on the official Discord of the project, discussions can be seen on whether the project has failed or not.
The co-founder of the Augur project, Joey Krug, has told the media that he is “not super concerned” about a low number of users and that the markets will eventually be resolved correctly with time. He cites a poor and clunky user experience and the end of the World Cup as the phenomenon that diminished the number of users in the platform.
According to Krug, a lot of users have probably tried the platform, got interested, but did not think that the experience was good enough and thought about coming back in six months or so.
A Problem of Liquidity
Not everybody is as positive as the co-founder of the company. Ryan Berckmans, which co-founded Predictions Global, a site that currently displays data about the Augur markets, believes that the issues are deeper and more troubling.
Berckmans affirms that no one is using Augur because it is difficult to find liquid markets. He compared markets to grocery stores and stated that people go shopping and they expect shelves filled with food, which is only there because the grocery store expects clients. If the shelves are empty or there are no customers, there is no business and that is Augur’s main problem.
The executive believes that there are no users because there are no markets, which do not exist because there are no users. It is a “classic chicken and egg problem”, he affirmed.
Predictions Global has decided to use a new feature to solve this problem, letting the users sort the markets via liquidity. This way, traders will be able to find better markets and will trade more, which will increase the liquidity.
At the moment, there are 33 markets with a liquidity of more than 10 ETH and only four with at least 250 ETH in liquidity. The most liquid market is the one that bets on the price of ETH at the end of 2018.
Krug is patient and believes that it might take two to three years until the project is “usable” from an average user standpoint. However, some critics are harsher and believe that Augur is finished.