Research: Ethereum-based prediction Market Augur is currently facing a draft deficit attack

Ethereum-based (ETH) forecast market Augur is currently facing a design error attack, according to research by cryptocurrency exchange Binance released on April 1.

The aforementioned attack concerns a controversial market described as betting on the ETH price at the end of March, which expired on April 1, 2019, 1:59 am (UTC +8), a few hours outside the actual end of March 31.

Since the contract expires before that tie, it can be considered invalid in what Binance investigators call a draft error attack. The market is said to have been washed washed by a few portfolios, probably to inflate the volume.

Reddit users had already reported this decay issue on March 20, with Augur core developer Joey Krug noting that the crypto community was exaggerating the scam range while admitting that protection against such activities is currently not working and needs to be updated in Augur version 2.

According to Binance research, the attacker also reportedly sent a limit sale order for the more realistic outcome (that the price will be between $ 100 and $ 1,000) "with a quote that is higher than what would be rewarded with an invalid result, but well below that they can regard an unsuspecting participant as a good deal "to lure a newcomer.

If the market is deemed invalid, all users who have contributed will see their shares valued at one third of their initial value.

The report also notes that the market – which is already covered by Cointelegraph – "Which party will check the house after 2018 US mid-term elections (sic)?" Another example of such an attack was. This market, which reportedly had a total volume of more than $ 2 million, contained a market placement date on December 11, 2018, while the change in the US home was in effect from January 3, 2019.

In this case, users did not consider the market invalid and decided to win the Democrats victory. The research also suggests possible solutions to the exploitable nature of Augur's mechanics, such as a price-based reimbursement mechanism, clearer references and market validators with non-trivial interests.

According to the report, forecasting markets seem to be one of the best use cases for blockchain, because they require trustlessness and decentralization to work correctly, and protect themselves against both government action and censorship.

According to Binance, however, Augur presents other substantial shortcomings, including low liquidity, barebones functionality, complex mechanics, an unclear approach to governance and the aforementioned ongoing attack.

Prediction of market regulation is particularly unclear, because a centralized forecasting market can fall under the control of the supervisors of several states. For example, the Markets Intrade and TEN prediction based in Ireland have seen the United States Commodity Futures Trading Commission (CFTC) file a civil complaint about their violation of the prohibition on trading options outside the stock exchange.

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