With our new tournament design, payouts are made weekly based on live performance over a month. This new design sets us up well for the launch of Numeraire (which will be June 20th 2017) because the payouts of the Numeraire staking auction is also based on live performance over a month.
Because performance over a one month period is volatile, data scientists in our Slack have proposed we make the payouts smoother.
Payouts have been aggressively skewed on Numerai (first place is $1000 second place is $435, third place is $267, etc). We don’t think this formula captures the right relative contribution of the data scientists under the new tournament design. We have decided to change this payout scheme to be $400 for first place, $353, and $312 for third place. Although the first and second place prize amounts are lower, positions 3 to 29 will earn significantly more. Coming 10th in our tournament now earns you more than twice as much as it did ($134 vs $63). Overall, the total payouts are slightly higher too. We think this gives a better incentive for data scientists to build robust models that reliably place high. As usual, Numeraire is also earned at a rate of 4x the dollars earned. See the new payout schedule.
With the launch of staking on June 20th, additional money can be earned by staking Numeraire. The total prize pool for staking will be set at $1000 per week to start with. The auction mechanism described in our white paper will be used to allocate the $1000. Numeraire is not earned in the auction; Numeraire is only earned in the regular tournament.
We will have $3675 per week allocated to the main tournament and $1000 per week allocated to the staking tournament. Our intention and expectation is that the staking tournament will become more and more important, and that Numeraire will become a more and more valuable to our data scientists. The interaction of speculators, exchanges, the price of Numeraire and data scientists is hard to predict at this point so we will change the mechanisms as we learn from you.
Overall these changes are a 28% increase in the amount of money paid out by Numerai (which is now almost $250 000 per year), and this excludes the value of the Numeraire payouts.
Looking forward to your feedback.
Founder of Numerai