The early prediction market’s fork will force inactive REP holders to migrate their tokens or lose access, testing the protocol’s dispute system.
Augur, one of the earliest decentralized prediction market protocols, is set to undergo what it is calling “crypto’s first algorithmic fork,” following a community effort to test the protocol’s built-in dispute system.
Ethereum ecosystem developer and Augur contributor Micah Zoltu has collected 200,000 REP — Augur’s governance token — to fund the Augur v2 fork through a crowdsourcing contract, according to an Oct. 24 X post from Augur’s official account.
In Zoltu’s blog post describing the initiative, published in June, the collected REP will be used to trigger a fork of the Ethereum-based prediction market platform. The process mimics an attack on the protocol, which costs approximately 200,000 REP, with the end goal of filtering out passive REP holders, the post explains. Zoltu also notes that participants will lose their deposited REP in the process.
Amid news that the fork will go forward, REP surged more than 50% over the past week, reaching multi-month highs, per The Defiant’s price tracking page. However, the token is still down over 99% from its 2016 all-time high above $340.
Once the fork is triggered, a 60-day migration window opens for holders to move their tokens to the version they believe reflects reality. Those who fail to migrate within that period will have their REP permanently stuck in the “old universe.”
Migration Timeline
Speaking with The Defiant, Zoltu said that users “don’t have to take any action right now” as the fork process hasn’t begun yet.
“The old Augur UI doesn’t load properly anymore, so we are currently embarking on building some new bare-minimum UIs that will allow people to do things necessary to participate in the fork,” Zoltu said, adding that this “will not be a full-featured prediction market UI, just enough so people can report, migrate, etc.”
According to Zoltu, the rollout will “tentatively start next week and will take some time to ensure it is robust enough to handle people’s money.”
Once the code is written, audited, and deployed to mainnet, the team will create a market to kick off the dispute process, expected to last 12 to 20 weeks, followed by a two-month forking window. “The critical thing is that REP holders show up during that last 2 month window,” Zoltu said.
REP Not Meant for Passive Holding
In their June post, Zoltu said the goal of the crowdfunding campaign is to “get the set of REP holders back down to the set of people who are actually paying attention.” They described the effort as a way to “filter out” inactive token holders and restore Augur’s core principle that REP is an active, not passive, token.
The Lituus Foundation, which oversees ongoing Augur development, said it supports the idea of testing the system’s economic security but won’t take part in the fork itself.
“Augur is a permissionless system — anyone can build on it, test it, or run experiments like this,” the foundation said in a blog post from Aug. 21.
When the 2.5% REP dispute threshold is reached, Augur’s system automatically splits into two “universes,” each containing identical markets and contracts. No new platform or token will be created in the process.
Instead, existing REP holders would have to migrate their tokens to the version they consider truthful. In practice, the truthful universe is expected to remain active, while the other — tied to the losing outcome — will likely see no trading and its REP will effectively become worthless.
Commenting on the initiative, Augur said in its Friday X post that the community “has spoken,” repeating that REP tokens aren’t “meant to be passive” as every token holder “must sometimes participate or be left behind.”
‘New Developments Under Way’
When asked why now, Zoltu emphasized that the timing was deliberate. “Anyone could do this at any time because Augur is permissionless,” Zoltu told The Defiant, pointing out that it is “generally not profitable to do so though (by design) so no one has. This means we have never had an opportunity to actually see it working in the real world.” The blockchain developer added:
“We have some new developments under way and there isn’t activity on Augur at the moment, so it seemed like a good idea to try to do it before those new developments come to fruition. Having no active markets at the moment also means it is minimally disruptive to actual users.”
Founded in 2014 by Joey Krug, Jack Peterson and Jeremy Gardner, Augur is widely known as one of the first initial coin offerings (ICO) on Ethereum, conducting the REP ICO in 2015 to fund development. The platform went live in 2018 with a native REP token and an oracle system for reporting outcomes.
Although it promised permissionless markets, in practice it struggled to deliver on that vision as early UIs and third-party node services were unreliable, blockchain sync issues caused delays, and high Ethereum gas fees further slowed activity, as The Defiant previously reported.
