Numeraire: Crowd Sourcing Machine Learning to Make Stock Market Predictions! But is it Worth Buying?

in LeoFinance6 months ago

Numeraire (NMR) is the token which powers the Numerai Platform, which incentivises data scientists to upload algorithms which predict stock market performance.

Anyone who uploads a model is entered into a league table and the better the model correlates with stock market performance the more NMR the model's creator earns.

Numerai is actually a Hedge Fund and it uses NMR as an incentive to crowdsource the most accurate AI, which it uses to inform its stock market investment decisions.

That's the basics, at least, for more details see below.

NMR is currently ranked 161st on CoinMarket Cap with a Market Cap of $193 Million and a token value of $38.60.

What is Numerai: how does it work?

While you can buy NMR on Binance, the utility aspect of NMR is purely aimed at data scientists, those capable of making predictive AI models the Numerai Hedge Fund can use. The soul use for NMR is to reward data scientists for taking part in Numerai's 'AI tournament'.....

Screenshot 2021-06-18 at 18.35.58.png

Data scientists can sign up to Numerai with just an email and then they can either upload their own predictive stock AIs or download and tweak standard or existing models to improve them.

Their models are then judged according to two metrics:

  1. How accurately their models correlate with stock market performance ('rounds are over four week periods).
  2. How useful the model is in contributing to Numerai's 'MetaModel' .

The MetaModel is the BIG THING for Numerai - it combines the best aspects of the best models - one model might be excellent at predicting tech stocks, for example, another at utilities stocks, so the company is effectively crowdsourcing individual models to create this 'metamodel'.

And I guess the idea behind rewarding for both correlation and contribution is that it encourages modellers to focus on uploading AI focused on the most profitable stocks, rather than the stable easier stocks.

Staking options

Those who upload predictive models can also stake NMR to 'bet' on it being the most accurate to predict stock market performance.

Screenshot 2021-06-18 at 18.36.22.png

The performance of the models is then ranked and modellers receive a portion of the total NMR staked, proportionate to how accurate their modelling is, capped at 25% of stake value.

Modellers can tweak how much they want to earn according to accuracy or utility to the metamodel, the two payout metrics mentioned above.

NB - the least accurate performers have part of the NMR stake burned, which incentivises accurate predictions.

Final Thoughts: Is Numeraire Worth Buying?

I REALLY like the idea of this Hedge Fund crowdsourcing AI by incentivising with crypto, there's little else out there that says 'potential BOOM'.

However, I'm not buying yet, for me it's a NO ATM. Based on the fact that only $12 M out of $193 Million is staked, and there's still 55% of the supply to be printed.

What would tip it for me is the functionality to be able to stake to other people's models, rather than having to stake to the one you upload. Utility here is limited to Data Scientists (and their clique-investors).

I wouldn't have a clue how to create a predictive AI model for the stock market, but I wouldn't mind a punt on someone else who did!

If the ability to have third party staking to other people's AI was released, it could see a huge amount of NMR staked, and potentially a lot more getting burned as some models staked to prove to be less effective, that could really be explosive for the token growth.

Something else I can't find is any information on how the fund is actually doing? It's a private equity fund so there's no publicly available data, which is off-putting. So I've no way of assessing how good those models actually are!?!

AND what's more - one other thing I'd like to see before I buy any NMR is some kind of buy-back and burn loop between the Hedge Fund's profits (if there are any?) and NMR.

So I like the idea, but there are too many unknowns about this one for me to invest in

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Thanks for sharing. I see NMR just like any other Expert Advisor that we use in forex that helps to give signals on when to buy and when to sell in forex and in my own opinion i will say it worth buying due to the fact that it will help someone to get a good prediction on the market price of crypto currency. But it efficiency is what i think we really need to consider before buying it. But once it can guarantee a good efficacy. One can go ahead and buy it.

The problem is you've no idea how good the models are as there's no public data on the hedge fund's performance!

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Nice ;))