Numeraire (NMR) -- many ways to enrich the world
Numerai is an AI-run, crowd-sourced hedge fund based in San Francisco. South African technologist Richard Craib created it in October 2015. Its primary competitors are other open-source trading platforms mainly QuantConnect, and WorldQuant.
The platform aims to decentralize the data science field where developers can experiment and create more reliable machine learning models and earn rewards in crypto.
Howard Morgan of Renaissance Technologies led Numerai's investment group, and its investors include Naval Ravikant. The company was the world’s first AI hedge fund to create its own cryptocurrency.
Numerai hosts a weekly tournament in which data scientists submit their predictions in exchange for the potential to earn rewards paid in a cryptocurrency called Numeraire.
The Numerai Tournament is where you build machine learning models on abstract financial data to predict the stock market. Your models can be staked with the NMR cryptocurrency to earn rewards based on performance.
The staked models of Numerai are combined to form the Meta Model which controls the capital of the Numerai hedge fund across the global stock market.
Watch this short film to learn how it all fits together:
At Numerai they are ensembling machine intelligence from thousands of data scientists around the world to achieve breakthroughs in stock market prediction accuracy.
Every data scientist on Numerai is solving the same problem using the same underlying features. But every data scientist approaches the problem in their own unique way. With many different solutions to the same problem, Numerai is able to combine each model into a meta-model just like Random Forests combines decision trees into a forest.
No data scientist on Numerai has a machine learning model that is better than all the other models combined. So Numerai is not a search for the ‘best’ model; it is a platform to synthesize many different models with many different characteristics. Although data scientists compete to place on the leaderboard. The competition is designed to collect models. Numerai is not really a competition; it’s an invisible collaboration to build the meta-model.
The benefits of the meta-model extend beyond just increased return. Combining many different models also has remarkable consequences in portfolio theory.
Think of every model on Numerai as a biased coin (with the edge in your favour). To allocate capital in our hedge fund based on just one model would be similar to betting the entire portfolio on just one biased coin.
It is preferable from a risk standpoint to place many simultaneous bets on many independent coin flips. With enough bets, it becomes increasingly probable that the edge in your biased coin will be realised.
Numerai’s meta-model gains simultaneous exposures to every model meaning our hedge fund holds many more independent bets than a portfolio built from just one model. The diversity of models leads to diversification in the portfolio and thereby reduces risk.
As it turns out, having a lower risk is dual with a higher return. In the coin flipping example, the independence of each coin flip implies larger bet sizes from the Kelly criterion. In portfolio theory, a lower-risk portfolio can rationally take on more leverage.
With many orthogonal vectors of edge, Numerai can not only earn higher returns with lower volatility but also rationally take on larger exposures.
Below is the investment process in Numerai:
Beside become an investor you can purchase NMR through these exchanges below:
1. Binance Exchange - you can purchase NMR using your mobile phone or desktop. You only need to follow the step as instructed. You can also receive a 25% discount on trading fees using Binance Coin (BNB). Use the link above for a bonus 10% discount
2. CoinBase - this is one of the most popular platforms because it is easy to use on your phone or tablet and is available in most countries. On CoinBase you will also find many of the top 100 coins. CoinBase will send email confirmations for another layer of security if you are using a PC. CoinBase also can be login using your phone. When you join CoinBase you can get AUD 13.84 in free Bitcoin when you buy or sell AUD 138.41 or more, by using the above link.
3. FTX - Trade NMR and other cryptos with zero fees on FTX. Use referral code “24Boston” or use the link above and get a free coin when you trade $10 worth of coins
4. Crypto.com In this platform, you can earn interest in a wide variety of coins, up to 12%, as well as apply for a crypto debit card. This operates similar to a pre-paid Visa card, where you top up before use either with cash or crypto. We also have rewards up to $50 for new investors when using the above link to create a new account.
5. Kraken Trade NMR and other cryptos and get 10% discount on trading fees.
6. Get free crypto by browsing the internet: use Brave Browser instead of Edge or Chrome, block ads, and earn free crypto by browsing. Click here to start.
7. Get free crypto by paying your bills! Use the prepaid CRO Visa debit card to pay for purchases and receive 3% cash back on purchases, up to 100% rebate for streaming services. No account fees, no interest charges, no credit checks. Use this link to get a free US$25 when you open an account.
8. OKX, you can purchase cryptocurrencies using this link to sign up and get a 10% discount on trading fees.
9. Bitunix you can purchase cryptocurrencies using this link to sign up and get a 10% discount on trading fees.
10. For the Aussies: Coinstash is an Australian crypto exchange based in Brisbane. New users can get $10 free on signup using this link
11. After you purchase any cryptocurrencies, if you would like to store the coins in offline devices for safety, you can use Ledger
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