Numeraire Price

Machine learning competitions are susceptible to intentional overfitting. Numerai proposes Numeraire, a new cryptographic token that can be used in a novel auction mechanism to make overfitting economically irrational. The auction mechanism leads to equilibrium bidding behavior that reveals rational data scientists¡¯ confi- dence in their models¡¯ ability to perform well on new data. The auction mechanism also yields natural arguments for the economic value of a Numeraire token.