Round Economics: Where Does the NMR Go?
Round-level NMR flows in the Numerai tournament — how much is earned, how much is burned, and whether the tournament remains net positive-sum for participants.
Every Numerai round moves NMR between participants and the protocol. Good scores earn extra NMR. Bad scores get burned -- permanently destroyed. The net flow decides whether the tournament is expanding or contracting the NMR supply held by participants.
This post breaks down the round-level economics. For the broader token supply picture, see NMR Token Economics. For how the payout factor modulates these flows, see The Payout Factor. Live numbers sit on the trends page and the rounds list.
Per-Round Flows
Each round produces a specific amount of NMR earned by winners and NMR burned from losers.
The bars show earned (up) and burned (down) NMR for each resolved round, with net flow as a dashed line. Almost all of the large earn and burn activity sits between roughly round 200 and round 500, with peak per-round earnings reaching about 35-40K NMR. From round 600 onward the bars shrink dramatically — both earnings and burns per round are a small fraction of the earlier peaks — yet the net line stays above zero for the vast majority of rounds.
The biggest burns cluster in the rounds 300-500 range, where market regimes punished most models simultaneously. The biggest earning rounds line up with high payout factors and friendly market conditions in that same early window.
The Cumulative Picture
The cumulative view shows the long-term trajectory.
Cumulative earned has consistently outpaced cumulative burned. Lifetime earnings reach roughly 1.6M NMR while lifetime burns sit near 650K NMR, with most of both curves built up between rounds 200 and 500 and only a gentle drift afterward. The dashed net line climbs to around 2.2M NMR and has stayed essentially flat for hundreds of rounds, confirming that the per-round earn/burn activity has become much smaller in absolute terms.
The aggregate view hides enormous individual variation. Net positive flow concentrates in the top-performing models, and many participants have net negative lifetime returns even when the tournament as a whole is positive. See Is Staking Profitable? for the per-model distribution.
Efficiency Metrics
Expressing earned and burned as a percentage of total stake at risk normalizes for the tournament's growth. The round economics view on the trends page tracks payout factor, earned, and burned side by side for every round.
Earn rate and burn rate (as percentages of total stake) show how efficiently the tournament converts stake into payouts or losses. Early rounds swung wildly — earn rate spiked above 12% and burn rate dipped below -4% in the rounds 200-500 range — but from round 600 onward both series collapse toward zero and hug a narrow band within roughly ±1%. When more NMR is staked, each unit of stake generates smaller percentage returns.
The gap between earn rate and burn rate is the tournament's net yield to participants. When the earn rate exceeds the burn rate, participants are collectively profitable. When they converge or invert, the tournament approaches zero-sum territory.
Is This Sustainable?
The rolling net yield -- the 20-round average of (earned - burned) / total stake -- is the key sustainability metric.
The rolling net yield has stayed above zero for the entire resolved history. It peaked near 4.4% around round 260 and again near 2.9% around round 420, then compressed sharply after round 600 to a narrow 0.2-0.5% band that has held through the most recent rounds. The tournament has not spent any sustained stretch below zero on this measure, meaning Numerai has been a consistent net payer to participants — just at a much thinner margin today than in the early stake-weighted era.
Sustainability depends on Numerai's willingness and ability to keep paying out. From Numerai's perspective, the NMR distributed to participants is the cost of acquiring alpha for the hedge fund. As long as the alpha generated exceeds that cost in terms of fund performance, the economics work.
The concern is a persistently negative net yield, where participants systematically lose more than they earn. That would drive participation down, reduce the diversity and quality of the meta-model, and hurt fund performance. The payout factor mechanism is designed to prevent this feedback loop by adjusting incentives dynamically.
Takeaways
The tournament is net positive-sum in aggregate. More NMR has been earned than burned across the tournament's history. Numerai is a net payer to participants.
Individual outcomes vary enormously. Aggregate positive flow concentrates in top performers. Many participants have net negative lifetime returns despite the tournament being positive-sum overall.
Earn and burn rates have compressed over time. As total stake has grown, percentage returns have declined. This is the natural capacity constraint of the tournament.
Sustainability depends on continued alpha generation. Numerai's willingness to pay positive net yield depends on the meta-model delivering value to the hedge fund. The economics are currently favorable but not guaranteed indefinitely.