The Erasure Protocol

Some crypto projects are developed from scratch. Bitcoin, Ethereum, and our portfolio company Algorand are examples of this. The developers have a vision and they go out and build it.

Other crypto projects evolve from something else. Kin and Props, both created by USV portfolio companies, are examples of that.

A particularly interesting example of the latter model is Numerai>Numeraire>Erasure. USV is an investor in Numerai which is a hedge fund that sits on top of the “The hardest data science tournament on the planet”.

Numerai initially developed the crypto token called Numeraire to allow data scientists to stake their predictions in the Numerai tournament and earn more compensation.

But as the Numerai tournament gained scale and the adoption of Numeraire grew, the Numerai team “realized that the primitives Numerai has built could have a wide range of applications beyond the tournament”.

And so they built the Erasure protocol which allows anyone to publish data and stake capital based on the accuracy of that information. This post explains some of the ideas behind the Erasure protocol.

The Erasure protocol is now live on the Ethereum Mainnet and you can build things on it. The Numerai team has already built two applications on Erasure:

Erasure Quantis a tournament used to crowdsource data on the Russell 3000 index. Participants submit daily price predictions on US stocks and are rewarded for contributing while building an immutable track record. Erasure Quant is a template that can be used by others to build their own tournaments.
ErasureBay is an open marketplace for information of any kind. It can be used to create credible signals over possession of local knowledge and attract a buyer willing to pay for it.

These crypto projects that evolve from something else are more focused and benefit from a real use case and market need. That does not make them more likely to succeed or more valuable. In the current market, almost all of the most valuable crypto projects are ones that started from scratch.

But I don’t think that will always be the case. Many of the most important technologies evolved from something else and I think that will be the case in crypto as well.


Comments (Archived):

  1. kenberger

    Duolingo should release a Crypto-speak to English language learning module ! (going by lack of comments on today’s post)

    1. Mike

      A lot to wrap your head around. The idea of using blockchain techniques to measure and reward predictions is interesting. Vegas odds makers, fantasy sports leagues might take note. The devil is in the details and there are a lot of details to consider.

  2. jason wright

    “The Erasure protocol is now live on the Ethereum Mainnet…”The Facebook model of distribution?

  3. Kerim Baran

    Does anyone know just how fast (in CAGR) the crypto-economy circulation is growing in the past 5 yrs or so? Or sub-segments like Bitcoin? Ethereum? Or other blockchain based segments? Are some dying, slowing and re-birthing, re-accelerating? Is there a good resource that shows all those trends?

    1. jason wright

      What metrics would you suggest? Number of wallets? Transaction volumes?

  4. Richard

    Posting an incoherent release bitching about Facebook and quoting George Soros (see it’s first two paragraphs) on a paid message (charges its readers) platform like Medium is soo ironic. Let’s get up speed with the goals of the internet.

  5. Asim Aslam

    Very similar to how every company became an internet company and then a technology company and mobile first and… it keeps going. The things that fundamentally reshape the foundations of the world cannot be ignored. Inevitably our ability to transact digitally without intermediaries drives forth a new online economy in an explosive way.