Staking and Payouts

Motivation

How do we design a payout system that incentive aligned and resistant against sybil attacks?

The answer is staking.

Numerai wants accurate predictions and is willing to reward it. How much you can earn/burn is a function of your performance and stake. This is also known as having skin in the game.

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

You can start participating in Numerai without staking to learn more about the tournament and about your model(s)' performance. When you feel confident in your model(s), you can attach some stake to it. The minimum stake value is 0.01 NMR.

Managing your stake

You can manage your stake on the Numerai website by clicking 'Manage Stake'. Use this modal to increase or decrease your stake amount, or opt into or out of mmc.

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.

  • Opting into or out of mmc applies next Thursday

  • Increases apply next Thursday

  • Decreases impact your stake amountnext Thursday, but the funds are only released after next Thursday + 4 weeks

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 beginning of the next round on Thursday.

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.

If you have opted into mmc, then you are paid for both correlation and mmc. For example if your correlation = 0.05 and your mmc = 0.01, your payout will be 0.06 * stake_value NMR

Payouts are capped at plus or minus 25% per round.

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.

Track your payouts with the community-built Numerai Payouts app.

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.