The day Augur launched it breezed into the rankings of top ethereum dapps by daily active users – but the momentum didn’t last long.

Released on July 10, Augur allows users to create and bet on prediction markets tied to real-world events, such as World Cup games, elections and – unfortunately – murders. Having waited three years for Augur to be developed and tested, users rushed to try it out, briefly pushing it past the most famous dapp, CryptoKitties, in terms of users. It’s worth noting that dapp userbases are uniformly tiny, though, with Augur and CryptoKitties each boasting around 300 users on the day in question.

Over the following weeks, however, Augur has shed users and slipped in the rankings.

At the time of writing, it’s had 66 users over the past 24 hours, putting it in an uninspiring 22nd place, according to data provider DappRadar.

The dwindling userbase has also raised some uncomfortable questions about the valuation of Augur’s native REP tokens, which are used to create markets and challenge reported outcomes (bets are placed and paid out in ether).

“I like Augur and what it represents,” Edan Yago, founder and CEO of the bitcoin-focused software company Epiphyte, tweeted. “BUT,” he continued:

“The protocol is valued at $308 million and has 64 daily users. That’s $4.8 million per user.”

It’s up for debate how useful that metric is (the valuation could reflect expectations of future user growth, or not be directly connected to users at all), but the Augur community plainly has user numbers on its mind. The project’s Discord forum was mulling the topic at the time of writing, and the question of whether Augur has “failed” was broached at least once.

Joey Krug, the project’s co-founder, put on a brave face, telling CoinDesk he’s “not super concerned” about user numbers “as long as markets are getting resolved correctly.”

He cited short-term factors that could have fed the decline, including the end of the World Cup (which dominated betting volumes early on) and the fact that user experience is still clunky.

“I imagine lots of people tried it and decided they’d come back in six months to a year when it’s more mature,” Krug said.

The liquidity problem

However, Ryan Berckmans, co-founder of Predictions.Global, a site that displays Augur markets and data, thinks the issue goes deeper than UX or FIFA’s schedule.

“Pretty much no one is using Augur,” he said bluntly, continuing: “A big reason why is it’s difficult to find markets with liquidity.”

To illustrate what he means, Berckmans compared markets to grocery stores. Customers go shopping at a grocery store because they expect to find shelves full of food. Grocery stores, in turn, stock their shelves with food because they expect shoppers to come buy it. If one or the other is missing, the store is no good to anyone.

It’s the age-old “chicken-and-egg problem,” he said.

As a first step towards solving that problem, Predictions.Global has rolled out a new feature, which lets users sort through open Augur markets by liquidity.

“Traders will be able to discover a short list of desirable markets to trade in,” Berckmans told CoinDesk, which may encourage trading and boost liquidity.

According to the feature – which is based on a closed-sourced algorithm – 33 open Augur prediction markets currently have at least 10 ether in liquidity and four have at least 250 ether in liquidity (the exact liquidity figures for each market are not shown).

The most liquid market at the time of writing deals with the price of ether at the end of the year:

Whatever the current trends in user numbers, Augur has been live for less than a month, and Krug, for one, is willing to be patient.

“I think it’ll be a two-to-three-year process before this is usable from an average user standpoint,” he told CoinDesk.

Desert image via Unsplash