Numeraire price and trading volumes spike

Trading volumes in NMR have spiked to $53 million globally in the last 24 hours – with price hitting a weekly high of $61.51 after jumping 52 percent from $40.73 over the course of the day, before falling back slightly to $54. In a confusing tweet, Numerai founder Richard Craib stated "USD staked on Numerai in January $300k, now $8 million." He was then asked by @FUTURE_FUND_ "How do you stake USD on Numerai? Or do you mean people who have purchased Numerai? To which he replied "I mean that’s the dollar value staked (but yes it’s in NMRsss)". NMR has seen a impressive price jump of almost 200% since listing on both Binance and Coinbase earlier in August.

What is Numeraire?

Numeraire (NMR), is the native token of Numerai – a San Francisco based hedge fund founded by Richard Craib in 2015. The Numeraire price has seen a impressive rise since the announcement on August 13th that it would be listed on Coinbase Pro. Coinbase will begin taking inbound transfers of NMR commencing 9AM PST on Monday the 17th of August, with full trading begining the following day if liquidity targets are met. Order books will launch in four phases, transfer-only, post-only, limit-only and full trading. NMR will trade the following pairs – NMR-USD, NMR-BTC, NMR-EUR and NMR-GBP. There is no timeline as yet for when NMR will be available on the Coinbase mobile app or on Coinbase.com

What is Numerai?

The Numerai hedge fund is based around a technology platform that obfusticates the fund’s trading data before sharing it with a vast community of anonymous data scientists. The firm’s trading database uses a form of homomorphic encryption to ensure that the Numerai’s community of data scientists can’t see the details of the company’s proprietary trades, but allows the data to be organized so that these scientists can build machine learning models that analyze it and make trading predictions.

When a data scientist submits predictions, they are able to stake the platform’s native token, Numeraire (NMR), on those predictions. This involves sending Numeraire to Numerai’s smart contract on the Ethereum blockchain. After a period of time, the predictions are analyzed. If the predictions are accurate, the data scientist who staked Numeraire on them will earn money. If the predictions are poor, their Numeraire is permanently destroyed.

Numerai holds a weekly trading competition where data scientists get access to updated data from the firm, which they can then use to create their financial models. Predictions that are uploaded to the Numerai platform are then tested in real-world markets for three weeks, after which the scientists with the top 100 performing models are rewarded for their efforts, and underperforming models lose their stake.

In February 2017, Numerai issued 1,000,000 Numeraire crypto tokens via airdrop to its existing 12,000 data scientists based on their past performance in Numerai tournaments. The token currently has a market capitalization of ~US$147 million and has risen by ~174% following the announcement of the Coinbase listing.

In 2019 Numerai launched Erasure, a public prediction staking platform that is separate from the hedge fund business. Erasure is a decentralized data prediction marketplace similar to platforms like Augur. It allows anybody to upload predictions, stake them with the Numeraire cryptocurrency, build a track record that everyone can verify, and earn money.

The platform is built so that every prediction is submitted using a commit and reveal scheme. Users can commit to predictions and get it timestamped but only have to reveal what the prediction was later, when it is no longer valuable. It is designed so that every user’s historical predictions are revealed but their most recent predictions are concealed, and buyers can verify how good a user’s historical prediction feed has been without ever being able to use those predictions.

On Erasure, buyers can assess which prediction feeds have the highest quality and choose to buy the feed, which gives them a special key to see all the most recent predictions before anyone else and, therefore can trade on that information before anyone else. The platform allows any individual to sell any prediction feed to any hedge fund.

It was suggested by Numerai founder Richard Craib that the Erasure platform was built to help decentralize the Numeraire token. He explained that before the Erasure launch, it was “a token designed just for Numerai. Only Numerai data scientists use NMR for staking, only Numerai can buy predictions and destroy stakes, and all prediction datasets need to be uploaded to Numerai’s servers. In a word, NMR is centralized — and that’s bad because it limits NMRs potential. But today we are announcing that we are decentralizing NMR by making NMR the native token of Erasure.”

The Erasure platform is designed so that applications can be built on top of it that utilize its framework; they include:

• Erasure Quant – a tournament application used to crowdsource data on the Russell 3000 equity index. Participants submit daily price predictions on US stocks and are rewarded for contributing while building an immutable track record. Erasure Quant is built as a template that can be used by others to build their own tournaments.
• ErasureBay – an open marketplace for information of any kind. It can be used to create credible signals using the possession of local knowledge and attract a buyer willing to pay for it.

In June 2020, it was announced that Numerai raised ~US$3 million through a token sale of the native NMR token. The new capital will be used to fund the development of its information staking protocol Erasure. Purchasers of the tokens include Union Square Ventures, Placeholder, CoinFund, Dragonfly Capital, and Numerai founder Richard Craib.