Augur is an open-source, decentralized, peer-to-peer prediction market platform built on Ethereum. People trading on Augur are rewarded if they bet on the right outcomes. The idea is to use markets in order to predict outcomes.
Augur's crowdsale occurred in August and September 2015 making it one of the first decentralized applications on the Ethereum blockchain.
Reputation (REP) is the tradable token on which the Augur prediction market runs.
Users can place bets on basically anything by creating a market. Once the market is created, trading is initiated and all users can access and freely make use of the market. An algorithm predicts outcomes on Augur based on the investments people made for certain outcomes.