Erasure Protocol - decentralized data marketplace for predictions
TL;DR; Erasure is a protocol that maintains a data marketplace. NMR is the staking token of the Erasure protocol, with a set amount of 11 million NMR. These will gradually decrease as NMRs are burned.
NMR was initially used in Numerai, the hedge fund. NMR was later extended to be the native token of Erasure protocol. A protocol for building global data marketplaces.
How does it work?
Erasure allows anyone to publish data and stake capital behind the accuracy of that information. Users can build a verifiable track record and stake their predictions with NMR. By staking NMR, the seller of a prediction puts value at risk if the prediction goes wrong.
When a seller stakes behind their prediction they choose a “griefing factor”. Griefing factor = degree (e.g. 1:10) to which the buyer is able to destroy their stake. If the seller stakes 100 NMR, the buyer can destroy both their stakes for 10 NMR.
What is being built?
There are currently three applications built on top of the Erasure Protocol: i) Numerai hedge fund, ii) Erasure Quant, iii) Erasure Bay.
i) Numerai hedge fund
Numerai is a hedge fund that crowdsources its intelligence from a global pool of data scientists. The machine learning models submitted by the users are ranked based on historical data, and eventually used for investment decisions. Participants stake their machine learning models, and get rewarded (or slashed) with NMR.
ii) Erasure Quant
Erasure Quant is a marketplace for stock market data (a stock-picking tournament). All predictions are staked (in NMR) and burned if not accurate. Rewards are paid proportional to the stake (in NMR).
iii) Erasure Bay
Erasure Bay is a marketplace for sourcing ANY kind of information (secrets, predictions etc). Requests for information are matched with a stake by “fulfillers” who get paid if the information meets the set parameters. DAI is used for staking & NMR is burnt in the background.
The Erasure protocol is currently governed by its core team. A defined roadmap for the protocol to become community-owned does currently not exist. Though, Richard Craib hinted at this in December 2018.
NMR is needed for staking and rewards. NMR is valued based on staking demand (projects using Erasure protocol) and a decreasing supply of NMR due to burn-mechanism (~3% of staked tokens are burnt). The supply of NMR is set and new tokens cannot be minted.
A problem we ran into is how dispersed information and terminology is in the Erasure ecosystem (due to Numerai). Simple suggestion: Change the name of Numerai token to Erasure token (similar what to Aave did) to reflect the protocol and not one application.
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The authors of this content, or members, affiliates, or stakeholders of Token Terminal may be participating or are invested in protocols or tokens mentioned herein. The foregoing statement acts as a disclosure of potential conflicts of interest and is not a recommendation to purchase or invest in any token or participate in any protocol. Token Terminal does not recommend any particular course of action in relation to any token or protocol. The content herein is meant purely for educational and informational purposes only, and should not be relied upon as financial, investment, legal, tax or any other professional or other advice. None of the content and information herein is presented to induce or to attempt to induce any reader or other person to buy, sell or hold any token or participate in any protocol or enter into, or offer to enter into, any agreement for or with a view to buying or selling any token or participating in any protocol. Statements made herein (including statements of opinion, if any) are wholly generic and not tailored to take into account the personal needs and unique circumstances of any reader or any other person. Readers are strongly urged to exercise caution and have regard to their own personal needs and circumstances before making any decision to buy or sell any token or participate in any protocol. Observations and views expressed herein may be changed by Token Terminal at any time without notice. Token Terminal accepts no liability whatsoever for any losses or liabilities arising from the use of or reliance on any of this content.
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