Numeraire is an economic term of French origin that serves as a benchmark in comparing the value of similar products or financial instruments. It is a unit of exchange that people adopt as a benchmark when comparing similar instruments or goods. The term "numeraire" translates to "money," "coinage," or "face value" in English. A numeraire is usually applied to a single good, which becomes the base value for the entire index or market. This good is then used to determine the value of other goods and services in the market, acting as a common denominator for relative prices12.
In the context of finance and economics, numéraire plays a crucial role in facilitating value comparisons when only the relative prices are relevant. It allows for the computation of relative prices across different goods and services, providing a common reference point for assessing their value. For instance, in a monetary economy, money serves as the numéraire, and it is used as the unit of account when determining the value of goods and services24.
In the realm of cryptocurrency, Numeraire (NMR) is an ERC-20 token that powers Numerai, a blockchain-based software that acts as a hedge fund. NMR is used as a means of payment and staking within the Numerai ecosystem, enabling users to participate in its prediction market and algorithmic trading system56.
9/1/2024 05:40am
