Numeraire (NMR) is a cryptocurrency token associated with Numerai, an Ethereum-based platform that encourages data scientists and developers to create and experiment with machine learning models. The primary objective of Numerai is to introduce decentralization into the field of data science, fostering competition in the creation of effective machine learning prediction models. Unlike traditional hedge funds, Numerai utilizes data and predictions generated by participants in a tournament to engage in stock market activities. The platform seeks to utilize machine learning in its strategies.

Numeraire operates by rewarding data scientists with NMR tokens when their models perform well in the Numerai tournament. As more individuals participate in the tournament and compete, the value of the NMR token may increase. The models submitted for the tournament enable Numerai to actively engage in stock market trading based on the results revealed by the participating projects. This approach to stock trading is one of the ways Numerai differentiates itself. NMR tokens are burned on a weekly basis, as participants who submit losing models and predictions forfeit their stake in the competition.

The primary use case for Numeraire is as a potential reward mechanism for data scientists who participate in the Numerai tournament. The more accurate their machine learning models are in predicting stock market movements, the more NMR tokens they may receive. This encourages data scientists to continually improve their models and contribute to the platform. Additionally, the NMR token can be staked by participants in the tournament, indicating their confidence in their models. If their models perform well, they retain their stake and may receive additional rewards. If their models perform poorly, their staked NMR tokens are burned.

Numeraire was founded in late 2015 in San Francisco by Richard Craib, a graduate of the University of Cape Town and Cornell University. Numerai is known for introducing a cryptocurrency to the market. The platform has since grown to host a global data science tournament. The maximum supply of NMR was initially set at 21 million tokens, but this was reduced to 11 million tokens in 2019. Three million NMR tokens were locked to be released as potential rewards for tournament participants. The Numeraire token did not undergo an initial coin offering (ICO). Instead, Numerai distributed 1 million NMR tokens among platform users with the highest activity statistics.

Numeraire (NMR) differs from other cryptocurrencies in its approach to decentralized governance, which is closely associated with its function as a blockchain-powered, AI-enabled hedge fund. The platform involves a global community of data scientists who are encouraged to submit accurate and original market predictions. Participants receive NMR, Numerai's native cryptocurrency, as a non-monetary token of recognition for their contributions. The platform's governance model incorporates the use of the Erasure Protocol, which allows anyone to upload information and stake on it with NMR, thereby expressing their confidence in the accuracy of their information. This combination of AI, blockchain, and crowdsourcing, along with a system of non-financial incentives, characterizes Numerai's decentralized governance model.

The NumeraireNMR platform hosts a data science tournament every week. These tournaments are part of the platform's unique approach to stock market forecasting. They invite participants from around the world to submit their predictive models based on the platform's encrypted financial data. Models that perform well are then considered for incorporation into Numerai's meta model, which is used in the stock market. The platform strives to maintain a constant influx of fresh predictive models, contributing to its distinctive method for financial forecasting.

Numerai Signals is a platform that enables users to upload stock market signals and evaluate their uniqueness in comparison to other signals on Numerai. The platform uses the NMR cryptocurrency for staking on signals, with the potential to receive non-monetary incentives. Unique and effective signals are incorporated into Numerai's hedge fund. Numerai Signals is part of Numerai's plan to develop a hedge fund. The platform provides performance, risk, and diagnostics over the historical portion of your signal. It facilitates the automation of daily signal uploads, with the aim to enhance the effectiveness of your participation. The platform accepts a variety of stock market signals, including fundamental signals, technical signals, alternative data signals, and blended signals. Numerai Signals neutralizes every signal uploaded before scoring to isolate the unique component of the signal that isn't already present in known signals.

NMR plays a role in the Numerai ecosystem, serving multiple purposes. NMR token holders can stake their coins to participate in the platform's Numerai Tournament. The staked NMR crypto is used as a commitment to the quality of the submitted models, indicating that participants are actively involved in the process. NMR token holders may participate in governance-related activities, contributing to decisions regarding platform improvements, protocol upgrades, and parameter changes. The NMR crypto coin is recognized within the cryptocurrency community and on various platforms within the cryptocurrency industry.

Numerai aims to maintain data privacy and confidentiality for contributors on its platform through a combination of data anonymization and data handling practices. The platform anonymizes data to ensure that no proprietary information is exposed to the data scientists, which helps to address concerns about data privacy. When contributors register and post, Numerai records the IP address that the post originated from and intends to retain server logs, which include the IP address of every request to their server, for a limited period. The IP addresses associated with registered users and their posts are also retained for a limited period. Numerai uses cookies to understand and save user preferences for future visits and to compile aggregate data about site traffic and site interaction. They do not sell, trade, or otherwise transfer personally identifiable information to outside parties. This non-personally identifiable visitor information may be shared with other parties under certain conditions.

The Numeraire (NMR) ecosystem utilizes a specific approach to aim for the accuracy and reliability of predictions. It operates on a system of incentives and penalties, facilitated by its native cryptocurrency, NMR. Contributors within the ecosystem may receive non-monetary incentives for submitting market predictions that align with outcomes. Selected submissions are combined into a meta model for further analysis. To participate in the prediction tournament, participants stake their NMR tokens on their predictions. If their predictions align with the outcome, they may receive non-monetary rewards. However, if their predictions do not meet the benchmark, a portion of their staked NMR is burned, resulting in a decrease in the total number of NMR tokens. This system of incentives and penalties aims to encourage contributors to submit predictions that align with outcomes, thereby striving to maintain the integrity of the predictions within the Numeraire ecosystem.

Numeraire (NMR) addresses the challenge of overfitting in its predictive models by implementing a distinct auction mechanism that seeks to make overfitting economically irrational. This mechanism is based on the use of the Numeraire token, a cryptographic token that data scientists stake on their predictions. If their models perform well on new data, they receive non-monetary incentives and their staked Numeraire is returned. However, if their models do not perform well, their staked Numeraire is destroyed. This system incentivizes data scientists to create models that perform well on new data, rather than overfitting to historical data. By making overfitting economically disadvantageous, Numeraire seeks to foster the development of more accurate and robust predictive models.

The Erasure protocol is a key component of the Numeraire (NMR) network, aiming to establish a decentralized and verifiable marketplace for predictions. It permits anyone to upload information, stake it with NMR tokens, and build a track record that everyone can verify. This protocol is designed to address the issue of information credibility in the prediction market. By utilizing the blockchain, the Erasure protocol ensures that every prediction is timestamped, making it impossible to alter predictions later. This aims to create a transparent and reliable track record for each user. The protocol employs a "commit and reveal" scheme, allowing users to conceal their predictions while committing to them, thus protecting the value of their information. The Erasure protocol introduces a staking mechanism, where users stake NMR tokens on their predictions, aiming to improve the quality of predictions. This protocol, therefore, aims to contribute to the network's functionality by increasing the reliability and credibility of the information shared, fostering trust among users, and encouraging the utilization of NMR tokens.

Numeraire (NMR) utilizes Ethereum's smart contract technology with the intention of improving the security and transparency of the Numerai platform. The smart contract governs the distribution of NMR tokens, aiming to ensure a fair and transparent system for data scientists participating in Numerai's machine learning competitions. It also dictates that there will never be more than 21 million Numeraire minted, which intends to act as a safeguard against inflation. When data scientists stake their NMR tokens on their predictions, these tokens are held in the smart contract for a certain period. If their predictions perform well on new data, their tokens are returned and they receive non-monetary incentives. If their predictions do not perform well, their staked NMR tokens are irreversibly destroyed, a process verifiable on the Ethereum blockchain. This mechanism discourages overfitting and seeks to promote the creation of models that perform well on new data, thereby aiming to improve the performance and security aspects of the Numerai platform.