Machine learning competitions are prone to deliberate overfitting. Numerai proposes a new crypto token, Numeraire (NMR), that can be used for a new auction mechanism that makes overfitting economically unjustifiable. The auction mechanism results in equilibrium bidding behavior, indicating that rational data scientists are confident in the ability of their models to perform well on new data. The auction mechanism also provides a natural argument for the economic value of Numeraire tokens.

NMR is the token used for staking in the Numerai Data Science tournament and the Erasure marketplace.