Founded in 2015 by Richard Craib, Numerai (NMR) is essentially a decentralised hedge fund. Numerai’s trades are determined by an AI, which is fueled by a network of thousands of anonymous data scientists.
It has to be noted that the brainpower behind Numerai is significant, with the firm stating it is backed by “Union Square Ventures, the co-founder of Renaissance, and the co-founder of Coinbase”.
The term numeraire – French – is ‘face value’, ‘coinage’, or simply ‘money’. In economics, the term refers to a basic standard by which value is measured. It is a tradable economic unit whose price is used to express the relative prices of all other tradables. In a monetary economy, money typically functions as the numéraire by serving as a unit of account, providing a common benchmark for comparing the value of various goods and services.
Numerai’s idea was influenced by Kaggle’s data science competitions, where participants build machine learning models to tackle various AI challenges. This approach allows Numerai to crowdsource high-quality predictive models from a global pool of data scientists, leveraging collective intelligence to improve its performance in financial markets.
Past Performance of Numerai’s Models
A total of $37,203,153 has been paid to data scientists so far, with 4,304 models currently staked. The average 1 year return of the models is a yield of 49.14%
Numerai has been affected by the quant crisis of 2025 (where quant funds have been steadily facing drawdowns since June), which in Bloomberg’s words is due to the ‘Garbage Rally’ or else known as climbing the wall of worry. This is shown in the below graph of Numerai’s highlighted model – numerai_swmm – between June and beginning of August.
JPMorgan’s Half a Yard
On August 26th, Numerai announced it had secured up to $500 million in funding from JPMorgan Asset Management. According to Bloomberg, this investment is expected to more than double Numerai’s AUM, bringing the total close to $1 billion within the next year.
Numerai’s flagship fund returned 25% in 2024, following a 17% decline in the previous year. Since inception, the fund has posted gains in every year except one and has recorded 15 consecutive months of positive performance, according to founder Richard Craib.
JPMorgan’s $500 million investment, its largest allocation to a quantitative fund to date, highlights the strength of Numerai’s appeal to TradFi.
Numerai’s NMR Token, Performance and Risks
NMR is an Ethereum ERC20 token (contract address: 0x1776e1f26f98b1a5df9cd347953a26dd3cb46671). The total supply of NMR is capped at 11 million tokens, all of which have already been created.
NMR achieved an ATL of $93.15 – during the last bull run – in May 2021. The alt token is currently at #411, with a fully diluted market cap of ~$167 million, according to CoinGecko.
Following the announcement regarding JPMorgan, NMR jumped 120% from $8 to $24. It has since retraced somewhat and currently trades at $15. 63.
Read: UMA: the ‘Optimistic’ and Adaptable Oracle
NMR Staking
Unless you are reading this as an institutional investor (in which case you can invest in the Numerai’s actual fund itself), the rest of us will have to make do with purchasing NMR and staking it. But what does staking entail?
Because will be no future minting, rewards for accurate predictions are distributed from the existing supply held in Numerai’s treasury wallets. This fixed supply model creates a deflationary dynamic, meaning that as more tokens are burned or locked through staking, the circulating supply may decrease over time, potentially increasing the value of remaining tokens.
Staking NMR is not a passive activity. It involves submitting accurate market predictions. You earn NMR for correct forecasts, but you forfeit your staked NMR if your predictions are wrong.
For more info on staking NMR by submitting your predictions, head over to Numerai’s website.
Numerai Competitors
Although one could argue that predication markets seem on the surface to be similar, Numerai has no competitors that have replicated their crowd-sourced decentralised hedge fund model of business covering 5,000 equities. Some have attempted to crowd-source a hedge fund (minus the crypto element), such as Quantopian, which failed to gain long-term traction in its attempt.
The Speculatour’s Disclosure: Not financial advice. No guidance is provided for any particular investor, asset prices can fall as well as rise. The Speculatour is not a licensed securities dealer, broker, investment bank or advisor.
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