Next-generation hedge fund Numerai announced it is releasing its token on Ethereum to be traded on the open market — all without an ICO.
Numerai Releases Native Token as Full-Fledged Currency
The company made the announcement in a blog post on Wednesday, in which they stated they had released 1.2 million “numeraire” tokens. It’s the project’s native token, used to make predictions on the app.
Breaking with current trends, there will be no ICO associated with this token release. Instead, the initial distribution of the token was allocated “meritocratically” among the platform’s data scientists through a data science tournament hosted by Numerai.
Basically, the tournament was a staking competition where anonymous data scientists from around the globe competed to create new and improved trading algorithms.
These scientists are ranked on a leaderboard and the higher their place the more Numeraire they receive. Previously, they were rewarded in bitcoin, but in the company’s announcement they informed users this would be changing.
Instead, they will be removing bitcoin as a payment option starting 30th September. Until then it will be slowly ratcheted down before being completely phased out. From then on, all payments will be made in either numeraire or ether.
Ethereum’s Stability and the Forsaken ICO
It may be that Numerai’s decision to forgo an ICO was made for a good reason: as it already had raised millions through traditional capital investment, the decision could also end up becoming a good PR move.
The recent Status and Civic token ICOs in particular are being blamed for the so-called “flash crash” of ETH on the GDAX exchange, as a result of one trader “cashing out” on their proceeds.
This flash crash led ETH prices to fall from $320 USD to below $14, with it even dropping all the way down to 10 cents at one point.
As ICOs have begun to slow Ethereum’s network down, a question has arisen regarding its stability and ability to scale. If anything, the very fact that Numerai is built on top of Ethereum may keep people away from it for now until things settle down.
What do you think of Numerai and their decision to release their token without an ICO? Let’s hear your thoughts below.
Images Via Numerai and Ethereum