Updated: Apr 8
Numeraire utilizes their token as an incentive for data scientists to create real-time prediction models. The firm created an incentive to have others do work for them - to modernize their predictions models for their own benefit. It is built on Ethereum in accordance with the ERC20 standard for tokens.
Numeraire is an Ethereum token that powers Numerai, a San Francisco-based hedge fund that crowdsources artificial intelligence to make investments in major stock markets around the world. Numeraire (NMR) holders can stake their NMR tokens every week on specific predictions. Successful predictions are rewarded with more NMR.
With data scientists in high-demand ($NMR) - has organized an intelligent system to incentivize 'data scientists' to work for them via freelance incentive through token revenue. This will help the organization decrease overall costs - while increasing their revenues through more accurate predictions models for their own investments.
With a key partnerships with Coinbase, located in San Francisco, Numeraire gains access to retail investors capital from the United States. This capital goes into the Numeraire token, increasing its value, with a more direct correlation to the $BTC price. As $NMR token value goes up, the incentives increase, for data scientists globally to engage in these tournaments, which help their other prediction accuracy in the stock market, which increases revenue and gain through that channel as well.
This business model as proven successful thus far, can pave the way for how hedge-funds work in the future. A true intersection between financial technology, blockchain, and game theoretic incentives to continuously improve their own prediction models. Risks to this model include, like many projects in the decentralized space, is the replication of similar tokens set up to compete. If multiple firms set up this type of incentivized tournaments - then the value of $NMR may decrease. First mover advantage is highly important however, which $NMR has in this type of model.
How much Numeraire ($NMR) is there?
The maximum supply of NMR is 11 million, and all tokens have already been minted. No new minting will occur. For successful predictions, NMR will be rewarded from the minted NMR stored in Numerai Treasury Wallets.
This total supply will gradually reduce as a result of token burns on unsuccessful predictions based on the Erasure protocol and the weekly Numerai tournaments. Numbers in real-time here.
The numéraire (or numeraire) is a basic standard by which value is computed. In mathematical economics it is a tradable economic entity in terms of whose price the relative prices of all other tradables are expressed. In a monetary economy, acting as the numéraire is one of the functions of money, to serve as a unit of account: to provide a common benchmark relative to which the worths of various goods and services are measured.
Using a numeraire, whether monetary or some consumable good, facilitates value comparisons when only the relative prices are relevant, as in general equilibrium theory.
When economic analysis refers to a particular good as the numéraire, one says that all other prices are normalized by the price of that good. For example, if a unit of good g has twice the market value of a unit of the numeraire, then the (relative) price of g is 2. Since the value of one unit of the numeraire relative to one unit of itself is 1, the price of the numeraire is always 1.
What is Erasure?
Erasure was launched in 2019 by Numerai as a broader ecosystem to expand the use cases of Numeraire (NMR). Based on the Ethereum network, Erasure is a protocol that elevates the staking incentives used in Numerai to the wider community to be used for any platform.
There are 3 use cases on Erasure:
Numerai: the hedge fund that performs investments based on aggregation of thousands of predictive models created by data scientists globally
Erasure Bay: a marketplace to trade information, such as predictions, valuations, and recommendations. Information providers will place a stake as a sign of confidence in their contributions
Numerai Signals: a tournament to crowdsource data on Russell 3000 stock predictions
How to get Numeraire (NMR) ?