By Kenny Colin, Marathon Money
Executive Summary
Numeraire, ticker NMR, is the cryptocurrency that powers Numerai, a hedge fund built on crowdsourced machine learning. Independent data scientists from around the world submit prediction models and stake NMR on their own work. Models that perform well earn rewards. Models that underperform lose capital, and those tokens are burned.
That structure matters. It ties incentives, accountability, and capital discipline into one system.
We view NMR as a long-term allocation built around utility, scarcity, and tangible output. This is not a token dependent on future promises. It is part of a functioning financial system that operates today.
Personal Context and Engagement
I did reach out directly to Richard Craib, the founder and CEO of Numerai.
I am hoping to have a direct conversation with him and potentially invite him on the show. I want to understand, in his own words, how he thinks about the evolution of the platform, incentive design, and where this model can go over the next several years.
Founder engagement matters to me. When I allocate capital long term, I want access to the thinking behind the system. Not marketing. Not summaries. Direct reasoning from the person who designed it.
What the Company Does
Numerai operates a hedge fund that uses a meta-model built from thousands of individual machine learning models. These models are created by data scientists who never see the underlying market data directly. Instead, they work on encrypted datasets and submit predictions.
The best signals are combined and deployed in live markets.
This approach replaces a traditional centralized research team with a decentralized global network, all operating under the same rules.
How NMR Fits Into the System
NMR is the enforcement mechanism.
To have influence, participants must stake NMR on their predictions. Confidence without capital means nothing. Over time, only models with repeatable performance survive.
Key characteristics:
- Maximum supply of approximately 11 million tokens
- Tokens are earned for performance
- Tokens are burned for failure
- No inflation used to subsidize participation
This is a closed economic loop tied to outcomes.
Why This Matters From a Capital Allocation Perspective
I focus on systems that:
- Involve people at scale
- Create tangible output
- Reward discipline
- Punish poor decision-making
- Compound over time
I think about what Apple became under Steve Jobs. Not just devices, but an ecosystem that gave people tools, created opportunity, and produced assets that compounded knowledge and productivity.
Numerai fits that mental model.
It creates data.
It creates research.
It creates opportunity for individuals to earn based on skill.
It produces outputs that feed real financial decisions.
That combination is rare in crypto.
Market Context
We are operating in a market environment where:
- The broader crypto market has declined roughly 40–50%
- Equities have gone through a drawdown
- Liquidity has tightened
- Risk assets have been repriced lower
This matters.
I am not chasing momentum. I am building positions selectively when valuations have compressed and narratives have cooled. That is when structure matters more than sentiment.
Our Approach Over the Next Two to Three Years
This is not a one-time buy.
My plan is to slowly accumulate NMR over the next two to three years, building a measured position while the market digests prior excess.
This is how I approach assets with real utility:
- Small initial allocation
- Add on weakness
- Reassess as fundamentals evolve
- Size the position so volatility does not force decisions
I am willing to sit with this through cycles.
Upside and Reward Profile
| Factor | Why It Matters |
|---|---|
| Utility | Required to participate in the system |
| Scarcity | Fixed supply with burn mechanism |
| Tangible output | Data, models, research used in live markets |
| Incentive design | Capital at risk enforces quality |
| Longevity | Built for repeated cycles, not one-off use |
Risks and Downsides
| Risk | Description |
|---|---|
| Ecosystem concentration | Value tied closely to Numerai |
| Volatility | Crypto price swings can be sharp |
| Liquidity | Thin markets during stress |
| Participation risk | Fewer skilled contributors would weaken the system |
| Transparency | Limited visibility into internal fund performance |
These risks are real and should not be ignored. Position sizing matters.
Why We Are Buying
We are buying because this is one of the few crypto assets where:
- Utility is mandatory
- Capital discipline exists
- Supply is constrained
- Outcomes are measurable
- Failure has consequences
This is not about predicting price moves next month.
This is about backing a system that forces correct behavior over time and creates tangible assets tied to real decision-making.
That is how I think about capital.
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