Numerai Cuts NMR Token Supply By 10 Million In A Bid To Become More Decentralized
The Numeraire token (NMR), launched in 2017, wants to reduce its supply in order to become more decentralized. The information was released by Richard Craib during an interview with CoinDesk. The maximum supply of the token will be reduced from 21 million to 11 million. At the same time, the company will be throwing away the keys to the contract that controls the supply.
According to Craib, this has always been the plan of the team. At the same time, regulators have a better view of virtual currencies that have no control over the supply of tokens. However, Craib did not comment on whether he and the team had contact with the U.S. Securities and Exchange Commission (SEC).
NMR tokens were not distributed via an ICO but instead, airdrops were performed to users of the platform.
Margaret Rosenfeld, the blockchain practice lead at the law firm Smith Anderson, commented about this thing:
“I think from a securities perspective the key question is whether or not the SEC will go after a company that only did an airdrop, rather than an ICO.”
Numerai started offering a marketplace for data that the hedge fund could use to make investments. Later, the team decided that they will open the marketplace to funds that want to incorporate work from other people. The software behind this initiative is called Erasure.
According to the company, there are 25,000 stakes of NMR. This makes the token the most used on the Ethereum platform. Furthermore, Craib mentioned that if Erasure brings new participants, then it is also important to cut off the supply of NMR tokens.
Craib explained that the SEC has been trying to go behind ICOs that went too far, that worked as scams or proposing fraudulent business schemes. Nevertheless, Rosenfeld believes that the SEC will be looking at everything the company has done with the token and not only what it did once it became decentralized.
Using Erasure, users will have the possibility to prove that they have made good predictions and express confidence. Buyers can also pay to destroy their stake if they get frustrated with a specific predictor.
Numerai says that there are 7 million NMR in existence and CoinMarketCap shows that there are 2.3 million. The token is the 424 largest with a market capitalization of $4.1 million. Each NMR can be purchased for $3.1. However, Craib does not know where CoinMarketCap gets the information from.