Staking and Payouts

Motivation

How do we design a payout system that is open, fair, and resistant against sybil attacks?

The answer is staking.

Staking allows Numerai to trust the predictions submitted by users because Numerai knows that it can burn the user's stake if the predictions are junk. In other words, users have "skin in the game".

Staking also gives Numerai a fair way to allocate payouts. Since payouts are a percentage of your stake value, you cannot cheat the payout system by simply creating duplicate accounts.

What would the internet look like if every interaction was staked? Read more at erasure.world‚Äč

Managing your stake

You can increase or decrease your stake on the Numerai website by opening the staking modal.

Increasing your stake will take NMR from your wallet and put it into the stake. Decreasing will take NMR from the stake and back into your wallet.

Changes to your stake do not apply immediately, instead they apply on the effective_date as shown on the right.

  • Increases apply to the next Thursday

  • Decreases apply to the next Thursday + 4 weeks

the staking modal

Payouts

The payout for each round is based on your stake_value as of the first Thursday after the submission deadline. Payouts are rolled back into your stake value at the end of each round on Wednesday.

For example, if your stake_value on round N is 100, and your correlation = 0.05, then your payout will be + 5NMR, which will be applied to your stake value in round N+4.

Decreasing your stake will lower your stake_value in the immediate next round, even though the decrease will only happen 4 weeks later.

If you decide to cancel your decrease request, your stake value will go back up to the original value in the immediate next round.

Compounding

Since there is a new round every week and each round lasts 4 weeks, stake values compound with a 4 week delay.

For example, the stake value of week 6 is based on the previous stake value of week 5 (110 NMR) + the payout from week 2 (-5 NMR) = 105 NMR.

stake compounding

Abuse

We reserve the right to refund your stake and void all earnings and burns if we believe that you are actively abusing or exploiting the payout rules.

We will rarely ever exercise this right, as our payout systems are designed to be attack resistant, and we want users to try new ideas without fear of punishment.

If we do detect abuse, we will inform the community about it and explain the actions we take against it. Here is one example.