Numeraire (NMR) operates an artificial intelligence aggregation model and data science tournament. Specifically, the platform incorporates a hedge fund that crowdsources artificial intelligence to make investments in stock markets. Users can make determinations and then stake their crypto as backing. If their prediction is correct, the user earns rewards, if their prediction is off, their tokens are burnt.
Uniquely, Numeraire (NMR) was the world’s first cryptocurrency issued by a hedge fund. As such, the platform has seen growing popularity since its launch in 2017. Notably, Numeraire entered the market with much fanfare as it was backed by Union Square Ventures, the co-founder of Renaissance, and the co-founder of Coinbase. Today, Numeraire is still a favorite of crypto investors.
What Problems Does Numeraire (NMR) Solve?
Numeraire (NMR) enables users to trade equities on the Ethereum blockchain. The platform removes human emotion from your trading strategy. Instead, users build machine learning models on abstract financial data to predict the stock market.
Onboarding
The developers behind Numeraire went to great lengths to simplify all the core processes of the network. The user interface is laid out in a clean and concise manner that makes it easy to find the most used features. You can stake and predict without any previous experience using the dashboard.
Benefits of Numeraire (NMR)
There are a lot of benefits that Numeraire brings to the market. For one, the platform gathers data from +7,500 coders and then algorithmically trades equities in the stock market based on the AI model. This approach removes human emotion from the equation. Instead, the system operates as sort of a hive mind trading algorithm in that it takes into consideration the predictions of thousands of users.
Selection
Users gain access to an impressive amount of stocks. Numerai’s stock universe includes more than 5000 popular assets. Best of all, these stocks are from markets located across the globe. In this way, you gain access to internationally recognized stocks that may have otherwise been inaccessible to your region.
Flexibility
Advanced users can create AI models using Python and R scripts. This multi-language approach provides more flexibility in terms of features and responsiveness. It also enables more developers to participate in the creation of AI models for the network.
How Does Numeraire (NMR) Work
Numeraire operates on the Ethereum blockchain. Users enjoy full interoperability within the Ethereum ecosystem. You can trade your coins on all ERC-20 DEXs and store your tokens in popular ERC-compatible wallets such as MetaMask. The protocol leverages a system called a Metamodel that incorporates all the predictions it receives from participants in its application network.
The system then automatically reviews the predictions to see who was correct. This approach allows the platform to reward users who have staked their NMR coins to a correct outcome or destroy those who belong to those who made false predictions. If you continually make correct predictions, you can be bumped up to the leaderboard. Here, you gain more rewards and ROI opportunities for your actions.
Two components
There are two main components that make the Numeraire system function – signals and tournaments. Each of these mechanisms plays a vital role in gathering and executing data sets provided by users. Here’s how they work.
Signals
Signals are provided by users who upload stock market strategies that support a specific stock or trading style. These protocols can be based on a variety of technical indicators and are available for other users to monitor and duplicate.
Tournament
The second core component of the platform is Tournaments. Tournaments are held weekly. These competitions allow users to submit trading algorithms for the stock markets. Users submit their predictions pertaining to a dataset through a staking mechanism and the predictions get analyzed and scored based on their accuracy.
Notably, the tournaments occur weekly. However, the scoring and payout period occurs every four weeks. This approach gives the system more time to gather data between payouts for its AI model. In this way, anyone can bet on the most likely outcome of the market and earn NMR tokens for their efforts.
Numeraire (NMR) – Stake
Once you make a prediction or select that of another user, you can then stake your tokens to make the bet official. The more tokens you stake and the higher your risk/reward ratio. If you stake on the right prediction, your awards are automatically disbursed to your wallet at the end of the month. Notably, these rewards come from newly minted NMR tokens.
NMR
NMR is the main utility token for the Numeraire network. User must hold NMR to participate in any Numeraire features or services. For example, you stake NMR on outcomes, conduct payments, and reward tournament participants via the token. You can trade NMR on any ERC-20 compatible DEX including Uniswap and SushiSwap.
Erasure protocol
To ensure the removal of human intervention from the execution of trades, Numeraire relies on the Erasure protocol. This protocol operates as a set of smart contracts on the Ethereum blockchain. These contracts automatically execute upon the completion of pre-set protocols.
Consensus
While NMR lives on the Ethereum blockchain, which operates as a Proof-of-Work network, the system utilizes a Proof-of-Stake consensus mechanism to remain valid. Notably, NMR transactions require 35 network confirmations before they reach finality.
History of Numeraire (NMR)
Numeraire, the firm behind Numeraire, entered service in 2015. The company is based out of San Francisco, CA, and was founded by Richard Craib. Numeraire raised eyebrows across the crypto community when it successfully secured $21.5 million during its crowdsale event that lasted from April 2016 through June 2020. Impressively, the firm secured investments from Union Square Ventures, Paradigm, Placeholder, and Howard Morgan, founder of Renaissance Technologies.
Bottom Line
Numeraire incorporates a variety of advanced AI algorithms, data scientists, and the input of regular users to create a completely new trading experience. The protocol helps to teach new traders varying strategies and techniques. At the same time, it provides experienced traders with a chance to secure higher ROIs. For these reasons, Numeraire is set to see contiued adoption moving forward.
