Blockchain Prediction Startup Numerai Raises $11M USD In Private Token Salebr>
Numerai, a crowd-sourced hedge fund and predictions market startup based in San Francisco, has raised $11 million in a private sale of its NMR tokens. The token sale was led by Paradigm and Placeholder.
Numerai, created by South African technologist Richard Craib in October 2015, provides a blockchain and cryptographic token-based ecosystem for incentivizing anonymous data scientists to create predictive models. The technological innovation Numerai provides is in its use of structure-preserving encryption that they apply on their data feeds. Its aim is to prevent biases and overfitting, it also makes possible for Numerai to share their data feed for free with its users.
Numerai founder Richard Craib said that the funds from the recent private token sale will go toward hiring engineers to help launch Erasure, a new decentralized data marketplace where anybody would be able to upload predictions, stake them with cryptocurrency, build a track record that everyone can verify, and earn money. The marketplace is reportedly scheduled to launch later in 2019.
Erasure, built on the ethereum blockchain, works by allowing members to essentially bet on their predictions. A user can stake a number of the company’s tokens on a specific outcome. If the prediction comes true, the user wins the staked tokens. However, if they are proven false, they lose them.
Paradigm co-founder Fred Ehrsam said in a statement that they invested in Numerai because of the company’s existing track record of enabling people to directly monetize data.
“Most proposals to do this are abstract and complex,” Ehrsam said. “We are interested in Erasure because it is concrete (it has a first use case and customer, Numerai) and simple (the mechanism is just writing encrypted predictions to the chain with the ability to sell them).”