My DEFI diary — day 5: an unexpected bonus
This series is a look back at the last few months as I’ve made my way into the crypto space, and particularly into the DEFI space, as a complete newbie. I aim to catalogue the moves I’ve made, the tech I’ve experimented with, and the mistakes I’ve made along the way. I include some details around fees and logistics, hopefully to be useful to others wanting to follow in my footsteps.
28 April 2021 15:00 ETH @ $2750.91 Gas Price: 73 Gwei
I know I promised to discuss liquidity pools in this post, but before we get there I need to tell you about another part of this story. Ever since I’d started exploring the worlds of blockchain, crypto, and DEFI, I’d loved this idea of possibly stumbling across a small fortune in Bitcoin that I didn’t know I had. I would rack my brain trying to think of some payment in Bitcoin that I might have received at some point in time and then forgotten about, but nothing came to me.
Then, one day, on a Wednesday afternoon in April to be precise, I was sitting at my laptop doing some work, and something reminded me of the Numerai project. This is a fascinating project that I’d had some interaction with back in 2017. They are an AI -run, crowd-sourced hedge fund based in San Francisco that was created by (coincidentally) South African technologist Richard Craib in October 2015.
In 2017 I was working on building various algorithmic trading models and portfolio construction models, so I was playing around with financial data and trying to find ways to extract meaningful signals from that data. Numerai were doing a similar thing, but on a much bigger, more ambitious canvas.
Part of what they were doing (the crowd-sourcing part) involved creating a contest and getting data scientists (and amateur data scientists like myself) to try our hand at extracting meaningful signals from their data. They had also created their own cryptocurrency, Numeraire (NMR), and participants could stake this currency to receive rewards for how well they did in the contests.
So, by competing (briefly) in these contests, I had been rewarded with a small amount of NMR — 328.89 NMR to be exact, on the 20th June 2017 at 2.44PM — see the transaction here. At that point in time ETH was worth $350.53. NMR had started off at a high of just over $100, but then had dropped to the mid-teens, and for a long time during the crypto winter of 2018 was trading in the low single digits (see price chart here).
The truth is, I never gave these Numeraire a second thought. Back then cryptocurrencies were not a part of the public discourse the way they are now, and I had no idea that they had any real value at all. So I promptly forgot about them (I also stopped competing on the Numerai contests, something I now regret as I could have potentially earned even more Numerai!)
So, back to this Wednesday afternoon in April this year — I log in to the Numerai website to discover that my 328.89 NMR are now worth just over $21,000! I actually did several double-takes, and had to double and triple check that I wasn’t making a mistake. But they were real. I quickly realised that this unexpected windfall would do really nicely as a small fund to start ramping up my experimentation in the DEFI space, and to see if I could earn myself some meaningful returns.
So that’s what I did — I transferred the NMR from my Numerai wallet to my Metamask wallet, and have been working at earning a return on this amount ever since. More detail on that journey (and on liquidity pools, I promise) in the posts to come!
Got any questions or comments? Pls post below — keen for this to be a two way conversation!