The idea of crowd-sourcing modelling predates AI/Financial prediction firms. In addition, the concept of using models to predict financial prices or market direction came into play. What was missing was putting the two together.
Perhaps the Achilles heel of this problem was data. Data was the glue to combine the two variables. No one with a good dataset would share it with the world as this was proprietary. Data is proprietary because it is difficult and expensive to gather and make useful for production. Without the ability to share proprietary data, there could be no crowd-sourcing. The solution to this problem was the encryption of data. While this was the right solution, another problem emerged. Encryption renders the data unusable; in other words, data loses all predictive structure. Solving the puzzle of keeping the predictive nature of data was the final key. The development of new encryption algorithms helped solve the problem of usability. By solving this problem, finance firms were free to crowd-source their predictions.
Data encryption also solved the issue of bias. If data scientists knew what stock they were predicting for, their bias could lead to overfitting of data, hence the production of poor models. With this issue solved, the untapped programming and data science talent could now access excellent production-ready data.
We now come to CrunchDao. While other firms are offering similar services, CrunchDaos’ offering is unique. It is not a hedge fund but a platform that powers financial institutions like hedge funds. With this, CrunchDao can aggregate different hedge funds, which creates more revenue streams and a robust business. It powers financial institutions via alpha signals its army of data scientists generates.
So, what makes CrunchDao the best quant/ml competition? First, it is a pure DAO. DAOs ensure that every decision receives consent from all members. Any member can submit a proposal for improvements or changes to any matter of concern. Members then vote on the proposal. If they approve, it goes through; if not, put aside. You are certainly not going to get this in a hedge fund. And by the way, its data scientists are called "Crunchers". In addition, CrunchDao is open to all; anyone can join.
Secondly, and perhaps most importantly, the quality of data. CrunchDao has made very clean and well-prepared data for immediate use. As mentioned, a data scientist may use the data immediately or perform exploratory analysis. Gathering data is expensive, but CrunchDao did not spare that expense.
Thirdly, the competition objectives are clear: generate alpha and sell the signals. Having a clear direction means that CrunchDao can now have as many competitions as possible. At the moment, CrunchDao only develops alpha for stocks. CrunchDao can have alpha development for commodities, cryptocurrencies, and derivatives. The options are endless, meaning CrunchDao is agnostic in terms of assets.
Fourth, we talked about compensation, but needs another look. There is also the flexibility of distribution in payment. Crunchers receive payment via the Dao structure in a token known as Crunch. The more competitions there are - the more compensation for the Crunchers. However, there is a contest - ADIA Labs -, which will pay in United States dollars. In addition, CrunchDao is looking at matters of internships, jobs, and other ways to recognise achievement.
Fifth, we come to the matter of learning resources. The community meets on Discord, where ideas are expressed and shared. There are also papers, articles, and book titles on quant finance, machine learning and more. CrunchDao is also a very active participant in the new community of Decentralised Science (DeSci). DeSci is a movement that aims to use blockchain technology to make scientific research more open, transparent, and accessible. CrunchDao has created an environment for all participants of its competitions to submit research proposals and share research. It is worth noting that while DeSci holds promise, this is an emerging concept, and its widespread adoption is ongoing.
No other organisation is providing this level of excitement and development. And there is more to come. We all know we are competing in a weekly tournament, but it does not feel like a tournament. Borrowing the word co-opetition feels more appropriate. One can only give the utmost respect to the men and women of CrunchDao - the crunchers - as they code for alpha. With that said, there is one message for all crunchers - "May thy code crunch and shatter. Long live the crunchers!"
If interested in being part of this competition, please see here for details: https://nosax.me/crunchDao
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