Project Overview
Numerai encrypts its trading data first, and then shares the encrypted data with data scientists — so scientists don't have the chance to copy the fund's trading strategy. However, the company will carefully design encrypted data, so that scientists can model based on the data, and use this to get more money in the transaction. Numerai began issuing a total of one million Numeraire tokens to 12,000 scientists starting February 21. The more points a scientist has, the more tokens they can get.
Numerai cannot be used as a currency to buy goods in the market, it is only used to motivate scientists to build successful machine learning models and then trade profitably in the real market. If the scientists make a profit from the transaction, they get Numeraire tokens and win a Bitcoin "bonus"; if the transaction is a loss, they can't get a "salary" and the company "destroys" their Numeraire Token.
Project Highlights
Numerai paid out over $200,000 to our users. We use Bitcoin for these payments. The problem with Bitcoin is that it exists on a different blockchain than the Numeraire token. This greatly limits the extent to which Numerai-based decentralized applications can be automated and unstoppable, as these applications cannot accept bitcoin payments, they can only accept and use ether.
The best machine learning model in Numerai builds on the mechanics of staking to create a powerful new dynamic. For thousands of people, Numeraire will be the first time in their lives to interact with an Ethereum smart contract. They can do everything from Numerai's website without having to manage keys or use an Ethereum client. This is not speculative; you can invest in Numeraire now, and the Ethereum transaction will affect the course of the Numerai hedge fund.
Application scenarios
Every user on Numerai has the opportunity to put NMR's token on their predictions to express their confidence in the model. If their predictions are good, they make money and their NMR returns. If their predictions are bad, their NMRs will be destroyed.
For users, the most important usage indicator is whether the biggest gainer of NMR is also the biggest holder, that is, the whale is the user. This is exactly what is happening with Numerai.
If you enter Numerai's leaderboard and sort by NMR career earnings, you can see that 7 of the top 15 NMR harvesters currently hold NMR. As a result, nearly half of the participants with the largest number of NMRs increased their holdings on a weekly basis. I don't know of a single cryptocurrency project where tokens are used so widely and frequently by their largest holders.
Numeraire Effect
Numerai requires data scientists to bet NMR on their models because only good models will benefit and accumulate. This is also happening.
When Numerai users submit predictions, they also submit predictions on the test set. Users get no feedback on their performance on this test set, and they don't even know what our data represents; this ensures that the test results on this test set are rigorous.
