The Daily: Arguing Over Augur, Regulated Stablecoins Attract Flak
Welcome to the final installment of The Daily for 2018. It seems fitting that the year’s ultimate edition should focus on one of 2018’s overarching themes within the cryptoconomy – stablecoins. We’ve also got space to squeeze in a critique of Augur’s crowdsourced prediction market and to consider yet another bitcoin-based Patreon alternative.
Also read: 1 in 7 Chinese Have Invested in Cryptocurrency
Regulated Stablecoins Attract Ire
Regulated stablecoins such as USDC, PAX, and GUSD have become increasingly popular through the latter half of 2018. These dollar-pegged coins, which are promoted as a more clearly audited take on tether (USDT), require corresponding fiat deposits for each token in circulation. One trader has ran into trouble, however, when trying to redeem his PAX tokens for fiat currency, with the story provoking mixed reactions from the crypto community. CCN first reported on the trader, who was asked a plethora of questions by Paxos, the issuer of the PAX stablecoin, when cashing out.
While such companies are obliged to perform compliance checks, the scope and depth of the questions posed has taken many observers by surprise. Among other things, Paxos sought to determine the owners of the PAX that were being redeemed as well as information about the individual’s trading strategy. As crypto lawyer Stephen Palley pointed out, though, the fact that numerous transactions were set to cash out just under $10,000, in a bid to escape enhanced scrutiny, may have ironically been what triggered Paxos’ interest.
Multiple transactions valued at a few dollars less than $10k on the same day. Yeah. Good luck. https://t.co/O963pIZGhE
— Palley (@stephendpalley) December 31, 2018
Regardless of the merits of Paxos’ investigation into the anonymous trader, the incident has strengthened the case for fully decentralized stablecoins such as dai, which is collateralized against other crypto assets rather than being backed by fiat deposits.
Crowd Wisdom Not as Wise as First Predicted
Augur’s crowdsourced prediction market has run into fresh controversy, this time over the veracity of one of its wagers. The decentralized marketplace, which launched to great fanfare earlier this year, utilizes so-called crowd power to enable bettors to reach consensus on the likelihood of a prediction coming to pass. Augur has just paid out on a wager that queried how many hurricanes would strike the U.S. this year.
Augur is a way for whoever has the most money to claim they are right regardless of facts. https://t.co/pU8wcOfr7U
— David Gerard (@davidgerard) December 29, 2018
The market settled the outcome based on there being two hurricanes that made landfall on American soil, but there’s just one problem – the correct answer is three. While crowd consensus has been shown to be an accurate arbiter, the incorrect resolution of this particular prediction, which should have been set at three to accommodate Hurricane Olivia reaching Hawaii, shows that crowds, like the individuals who comprise them, are still fallible. With only 0.62 ETH resting on the outcome of the hurricane prediction, its errant resolution has at least caused little financial damage.
A Wild Patreon Alternative Appears
Following a year of constant censorship by dominant web platforms, beleaguered users have begun seeking out alternatives that aren’t so hasty to throw down the banhammer. In the last two days, we’ve reported on a brace of bitcoin-based Patreon alternatives that have appeared – Tallycoin and Bitbacker.io. Now there’s a third. Librepatron, backed by BTC Pay server, enables anyone to set up a Patreon-like service with payments collected in BTC. “Most Patreon alternatives don’t implement the full Patreon feature set,” explained developer Jeff Vandrew. “This seeks to change that.”
What are your thoughts on today’s news tidbits as featured in The Daily? Let us know in the comments section below.
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