Currently FAQ (https://www.augur.net/faq/) explains that

Passive holders of Reputation (REP) that are not using their Reputation (REP) within the Augur protocol to stake on disputes and forks are penalized.

Which appears a bit wrong, because I can hold REP and not staking them without any risk to be penalized (loosing my REPs). Is this right?

The sentence which is now right before the one you quoted says:

If you don’t participate in a fork (when the network has a very large dispute over an outcome), you lose 5% of your REP.

There hasn't been such a very large dispute so far. That's why you haven't lost any REP.

  • Thanks for the answer. How could I be notified that I must take any action? – mihserf Jul 22 at 7:31
  • Also it's not clear what should do those traders who trade their REPs on an exchanges in the case when there is a large dispute. – mihserf Jul 22 at 7:33
  • @mihserf: You should not hold REPs in an exchange! By doing that, you give them power to vote, instead! Edit: Ideally, you should not hold anything in an exchange for any meaningful period. You may lose out on forks a la Bitcoin Cash, the exchange getting hacked, the exchange going bankrupt, and so on. The "trade" is just a database update in the exchange's tables. That is why they offer it so cheap. But the "withdrawal" is the actual transfer of value! – danuker Sep 11 at 6:59
  • I know that holding on an exchange is not safe at all. I meant holding in a cold wallet. – mihserf Sep 12 at 17:35

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