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Numeraire

Overview of Numeraire

Numeraire is a cryptocurrency and software designed to facilitate the trading of equities on the Ethereum blockchain. It operates as a hedge fund, incorporating artificial intelligence and data science tournaments to predict stock market trends.

Key Use Cases

• Staking: Users can stake Numeraire on their predictions about stock market trends. Correct predictions are rewarded with additional Numeraire, while incorrect predictions result in the staked tokens being burned.
• Tournaments: Weekly competitions where data scientists submit trading algorithms about the stock markets. Participants stake Numeraire on their predictions, and those who predict correctly earn more Numeraire.
• Signals: Users can upload stock market strategies and stake Numeraire for a chance to earn more tokens. The platform algorithmically decides whether a user's prediction is correct or not, rewarding or penalizing them accordingly.

Ecosystem Integration

• Numerai Platform: Numeraire is the native token of the Numerai platform, which combines AI, machine learning, and crowd-sourced stock market prediction models to revolutionize quantitative finance.
• Erasure Ecosystem: Numeraire is also used for staking and payment within the Erasure ecosystem, a broader project aimed at decentralizing and sharing data.

Incentivization

• Data Scientists: Numeraire incentivizes data scientists to create high-quality prediction models by rewarding them with tokens for accurate predictions.
• Users: Users are incentivized to participate in tournaments and submit signals, as they can earn Numeraire for correct predictions.

Token Mechanics

• Supply: The maximum supply of Numeraire is 11 million tokens.
• Distribution: Initially, 1 million tokens were distributed to active platform users, with 3 million tokens locked until 2028 as rewards.
• Token Burn: A weekly burning mechanism is in place for tokens staked on losing predictions, making Numeraire a deflationary asset.

Pros of Numeraire

• Innovative Platform: Numeraire combines machine learning and blockchain technology to create a unique hedge fund that leverages crowdsourced predictions to make trading decisions.
• Incentivization: The use of NMR tokens incentivizes data scientists to create accurate and effective predictive models, fostering a competitive environment that benefits the hedge fund.
• Deflationary Asset: The burning of NMR tokens for incorrect predictions reduces the token supply, potentially increasing the value of remaining tokens.
• Diverse Applications: Numeraire offers multiple avenues for users to earn NMR, including the Tournament and Signals apps, which allow for active participation in the network.
• Decentralized and Secure: The platform is hosted on the Ethereum network, utilizing smart contracts to ensure public trust and maintain a predetermined total supply of NMR tokens.

Cons of Numeraire

• Complexity: The Numeraire ecosystem, including staking, burning, and tournament mechanisms, can be complex and may limit broader adoption due to its complexity.
• Risk of Token Loss: Staking NMR tokens carries the risk of losing them if predictions are incorrect, which can deter some users.
• Limited Use Cases: While Numeraire has a unique application in the hedge fund space, its use cases are relatively limited compared to other cryptocurrencies.
• Volatility: The price of NMR can be volatile, influenced by both the broader cryptocurrency market and specific factors related to the Numeraire platform.
• Correlation with Cryptocurrency Market: NMR's value can be correlated with the overall cryptocurrency market, which may not be appealing to all users.

Founders of Numeraire

The founder of Numeraire is Richard Craib, a South African technologist with a background in machine learning and quantitative finance. He founded Numerai in San Francisco in 2015.

Investors in Numeraire

Numeraire was founded by Richard Craib in 2015 and has received significant funding through various investment rounds. Here are some key points about the investors:

• Funding Rounds: Numerai, the company behind Numeraire, raised over $21 million in four separate funding rounds from 2016 to 2020.
• Initial Token Distribution: In 2017, Numerai distributed 1 million NMR tokens to 12,000 data scientists who had previously participated in Numerai tournaments.
• Investment Details: Specific investor names are not provided in the available information, but it is clear that the funding was secured through multiple rounds, indicating support from various investors.
• Use of Funds: The funding has been used to develop and enhance the Numerai platform, which utilizes AI and machine learning to generate quality data for investments.

Key Points

• Founding: Richard Craib founded Numerai in 2015.
• Funding: Over $21 million was raised in four funding rounds.
• Token Distribution: 1 million NMR tokens were distributed to data scientists in 2017.
• Platform Development: Funding was used to develop the Numerai platform.

Understanding Numeraire as an Investment

Numeraire is a unique project that combines innovative technologies to enable users to trade equities and submit prediction models. Here are some key points to consider when evaluating Numeraire as an investment:

• Project Purpose: Numeraire is a decentralized hedge fund that incentivizes data scientists and users to submit prediction models and upload signals for market predictions. This system allows users to earn NMR for their participation.
• Value Mechanism: The value of Numeraire is partly derived from its limited supply, which acts as a mechanism against inflation. The finite supply means that no new NMR tokens will be minted once the supply is exhausted.
• Network Participation: Users and data scientists can submit prediction models and stake NMR on the predictions they believe will be most accurate. This participation can lead to earning NMR and other rewards.
• Innovative Technology: Numeraire uses a combination of AI, machine learning, data science, and cryptography to enable users to trade equities based on predictions created with these technologies.
• Earning Potential: Data scientists can earn NMR and Bitcoin (BTC) by submitting accurate prediction models. The top 100 prediction models are rewarded based on their performance in the market.
• Staking and Trading: Users can stake NMR on prediction models and trade NMR on cryptocurrency exchanges to make a profit based on the difference between the buying and selling price.

Key Considerations

• Unique Hedge Fund Model: Numeraire's decentralized hedge fund model provides a unique way for financial advisors and data scientists to generate extra income by submitting trading strategies driven by relevant market data.
• Community Engagement: The project encourages community engagement through the submission of prediction models and staking NMR, which can lead to a more active and involved user base.
• Long-term Potential: The innovative technology and unique model of Numeraire could provide long-term potential for growth and development.

Conclusion

Numeraire offers a unique investment opportunity through its decentralized hedge fund model and innovative technology. The project's focus on community engagement and long-term potential could make it an attractive option for investors looking for something different in the crypto space.

Halal Status of Numeraire

• Halal Status: Yes
• Reason: Numeraire is considered halal because its primary use is as a staking mechanism and incentive system for data scientists contributing to machine learning models for stock market predictions, without involving riba (interest) in its core protocol design. The platform's revenue model is based on the performance of predictions in real-world financial markets, and the staking mechanism serves as a quality control system rather than a lending or interest-bearing product.