Launched in 2015 by Richard Craib, Numeraire is part of the Numerai hedge fund, which crowdsources predictions from data scientists around the world, using the NMR token as an incentive.
Today, we will cover the following topics:
- About NMR Protocol
- How does Numeraire work?
- Key Features
- Technical Analysis
- Why is NMR The Coin of the Week?
About Numeraire (NMR)
What is Numeraire?
Numeraire (NMR) is an Ethereum-based token that powers the Numerai platform, a cutting-edge hedge fund utilizing artificial intelligence and blockchain technology to forecast stock market trends.
This platform enables a global network of data scientists to create and stake predictions using advanced machine learning models.
Users can participate in two main applications:
Numerai Signals, which allows the submission of stock market strategies tailored to specific stocks or trading styles, and Numerai Tournament, a weekly competition where participants submit trading algorithms and stake NMR on their predictions.
The Erasure protocol ensures that correct predictions are rewarded with NMR, while incorrect ones lead to the forfeiture of staked tokens, thereby incentivizing accuracy and reliability.
Dig deeper into Numeraire whitepaper.
NMR Token
Numeraire (NMR) is a versatile digital asset that serves as the backbone of the Numeraire platform, driving its innovative approach to finance and data science. This ERC-20 token is integral to various functions within the ecosystem, particularly in staking, governance, and trading.
Key Functions of Numeraire (NMR):
Staking for Prediction
NMR tokens are staked by participants who contribute predictive models to the Numeraire platform. This staking mechanism ensures that only high-quality predictions, backed by a track record of success, are submitted.
Accurate predictions are rewarded with additional NMR, while incorrect predictions result in the loss of staked tokens, thereby maintaining the integrity of the platform.
Governance Rights
Holders of NMR have the ability to influence the future of the Numerai platform by participating in governance decisions.
This includes voting on protocol upgrades, parameter adjustments, and other critical changes that shape the ecosystem.
Trading and External Value
Beyond its use within Numerai, NMR is also actively traded on various centralized and decentralized exchanges.
The token's fluctuating value offers opportunities for traders to buy low and sell high, making it a potentially lucrative investment.
Supply and Distribution
NMR has a capped supply of 11 million tokens, with 5.7 million currently in circulation. The initial distribution of NMR was unique in that 1 million tokens were freely given to 12,000 participants with the highest activity.
An additional 3 million tokens are locked for future platform development, ensuring a controlled release and maintaining the token's value over time.
A token burn mechanism is also in place to further limit supply, rewarding the most successful predictors with a greater share of the remaining NMR.
Payment and Transfer
NMR can be easily sent to others for various purposes, including donations, payments, or transfers between users.
This versatility makes NMR not just a tool for finance professionals but also a practical digital currency for everyday transactions.
Deflationary Mechanism
NMR is burned when a prediction is wrong, reducing the total supply over time. This deflationary aspect increases the scarcity of the token, potentially driving up its value.
How does Numeraire work?
Numeraire (NMR) is integral to Numerai, a hedge fund that combines data science, AI, and blockchain to refine stock market trading strategies. The platform encourages data scientists to create predictive models through Numerai Signals and Numerai Tournament.
Numerai Signals allows users to submit stock market predictions based on various data points. These predictions are evaluated by an algorithm, rewarding accurate predictions with NMR tokens, while incorrect ones result in the burning of staked tokens. This continuous feedback loop incentivizes valuable market insights.
Numerai Tournament is a competitive environment where participants stake NMR tokens on the accuracy of their models predicting stock market trends. Correct predictions earn rewards, while incorrect ones lead to token loss. The tournament operates weekly, with payouts and scoring every four weeks.
The core of Numerai's strategy is the "Meta Model," an aggregate of the best-performing predictions submitted by users. This evolving model is used by Numerai's hedge fund to trade equities, adapting dynamically as new data comes in.
Numerai’s decentralized structure ensures secure, encrypted data submissions using Ethereum’s blockchain for transparency and fairness. Unlike traditional hedge funds, Numerai offers an open, collaborative environment where data scientists globally can contribute to and benefit from the fund’s success.
Key Features
Collective Intelligence and Decentralized Finance
Numeraire harnesses the global expertise of data scientists, inviting them to contribute predictive models that enhance Numerai’s trading strategies. This approach brings diverse perspectives, leading to a robust set of models that drive the hedge fund's success, seamlessly integrating data science into financial markets.
Deflationary Mechanism for Value Preservation
NMR tokenomics feature a deflationary model, with tokens regularly removed from circulation. This scarcity can increase the token's value over time, aligning ecosystem participants' interests and rewarding effective contributors.
Secure and Transparent Data Handling
Numeraire employs advanced cryptographic methods to ensure the security and privacy of contributed data and models. This fosters a trustworthy environment where data scientists can confidently share their work.
Global Market Access and Flexibility
Numerai provides access to over 5,000 globally recognized stocks, offering opportunities beyond local markets. The platform supports Python and R, enabling developers to create AI models tailored to their needs, encouraging broader participation.
Pioneering Decentralized Data Collaboration
Numeraire enables data scientists to contribute insights without revealing their data, fostering a collaborative yet private environment. Regular competitions promote innovation, rewarding models that enhance the hedge fund’s performance.
Technical Analysis
As per our latest altcoins outlook, NMR has surged by over 50% after rejecting the weekly support at the round number of $10.
This week, NMR has broken above the last major high at $15 and is currently retesting it.
As long as the $15 structure holds, we will be looking for trend-following buy setups to catch the next impulsive movement.
Why is NMR The Coin of the Week?
Numeraire (NMR) stands out as the Coin of the Week for its unique blend of data science and decentralized finance.
By incentivizing global data scientists to create predictive models for financial markets, NMR not only drives innovation but also offers strong deflationary tokenomics, ensuring long-term value.
Its secure, collaborative platform makes it a leader in decentralized finance.
From a technical perspective, NMR is retesting a previous major high, giving us an opportunity to capitalize on the next bullish wave.
Also read more Coin of the Week articles.
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