Reputation security model

[zack]

"Rep" or "Reputation" is the currency that is owned by the members of the oracle. If you want to participate in the oracle, you have to buy rep from someone who already has it.

Augur's security model says that the rep owned by the oracle has to be worth more than all the outstanding shares in all the markets that the oracle judges over.

As Paul Sztorc talks about in this essay: http://www.truthcoin.info/blog/pow-cheapest/
The cost of locking up 1/2 of all the coins is very expensive. It is as expensive as the interest rate applied to the locked up coins.

My hope is that it is possible to use rep worth 1 to judge over markets worth 100. A > 1/100 ratio.
Is my dream impossible?

Here is the reasoning Augur is using the justify their > 1/2 ratio:
If the oracle lies, the value of rep will drop to zero.
The oracle will only lie if the profit exceeds how much they lose in rep.
The maximum profit is smaller than the value of all the outstanding shares.
You can only steal one side of a bet, bets that are very unequally probable are most profitable to attack.