Numerai to Cut Token Supply by 10 Million to Become ‘Decentralized as F*ck’
Numerai has never sold tokens, but people have and use tokens.
The numeraire (NMR) began with an early departure from the Early Coin Offering (ICO) template in June 2017. Now the final upgrade to the company's commercial contract will reduce the maximum token supply from 21 million to 11 million so the company will give up the key to the contract to control the supply.
Numerai founder Richard Craib said in an interview with CoinDesk: "We will be decentralized into fucking.
Craib has always responded to comments that this was always a plan, but the US regulators proposed widely used tokens that no one controls.
When CoinDesk asked Craib whether he had contacted the Securities and Exchange Commission (SEC) about the business model, he did not comment. Nonetheless, Craib reassured that the company decided not to conduct ICO. Rather, the NMR tokens were distributed via air drop and paid to platform users.
"From a securities standpoint, I think it's important for the SEC to chase after the company that drove the air drop, not the ICO," said Margaret Rosenfeld, chief executive of block and chain practice at law firm Smith Anderson.
How it Works
Craib does not argue that Numerai has so far been centralized.
Numerai started out as a data marketplace where hedge funds can invest. With the complete debut of Erasure and Etherereum software, Numerai will open its market to funds that want to integrate the work of others.
Numerai goes back to 2015. The data has been established as a hedge fund that wants to provide a better way for analysts to sell good data analysis. Currently, Numerai uses software to allow data scientists to calculate figures for the benefit of Numerai, but Erasure allows predictors to prove their performance.
Today, only one customer estimates that there are 25,000 stakes in NMR.
But what is remarkable in recent decentralization announcements is that it not only delivers the software to the NMR holder, but also provides far fewer tokens than originally planned.
According to Craib, if the eraser is to bring in a lot of new entrants, it is important to block the new supply of NMR.
"We should be able to be sure that they will not make the whole token to Numerai."
But there is a slow question: why are you moving so fast?
Craib told CoinDesk: "What we do now is not reactionary, he added, the SEC's priority is to take over ICOs.
In other words, we already have a single project, Stream decided to adopt our ICO because we did not think the company could legally do it, and we ended it completely when we did not believe we could do Airdrop.
Nonetheless, Craib is confident that switching the protocol to an NMR holder is sufficient.
Rosenfeld, Smith Anderson Lawyer was not so sure. She said she will review everything the company has done with tokens, as well as what happened after the SEC was fully dispersed. "Security concerns" are not disappearing before the SEC, she said.
Still, she added: "[U.S. regulators] I have not followed a company that has yet to air."
To date, NMR payments have been issued to users through weekly analysis tournaments. Competitive analysts had to work with NMR. It was a way of expressing confidence in their models. If their analysis turns out to be correct, the larger stakes will get larger NMR compensation.
If their research was bad enough, scientists could lose their stakes, but the lost steak did not turn to Numerai. Craib explained. The lost steak just got on.
By clearing, you will be able to prove that you have made good predictions over time for a given set of data, and you can sell those forecasts to someone you think your fund can take advantage of.
Like existing systems, analysts need to steal predictions to express confidence. If the buyer feels frustrated with the predictor, he can pay to break his stake.
Joshua Gans, an economist at the University of Toronto, does not buy a staircase approach to erasers, but the community does not need to stick to it. When erasure starts, NMR becomes a governance token. When a better approach is reached, the holder can vote to approve a better approach to managing spammy data sets.
What they can not do is increase the token supply. Smart contracts will be discontinued for profit.
But wait, there is more.
When Erasure is released, the supply of NMR tokens will increase by almost half.
How can that be a key question for regulators. The company does not disclose how to finally distribute many tokens (more than 50% of the existing supply).
According to Numerai, there are about 7 million NMR now. The number of CoinMarketCap is about 2.3 million. Craib said that in May he locked 3 million tokens in 10 years, but still did not reveal 1.7 million tokens.
"I really do not know where CoinMarketCap gets their information," Craib wrote CoinDesk in the email.
In the early days of Erasure, "Numerai will be one of the biggest buyers of data feeds for the time being," he believes, but he believes it is inevitable for other hedge funds to find it for the forecast.
"It will essentially be a token for users and usage," he said.
Numerical images through Shutterstock
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