A new blockchain token will hit the market today, but you won't be able to buy it in an ICO.

As criticism mounts for so-called initial coin offerings – spurred by those who say the flash fundraising method isn't always the best way to incentivize a distributed economic network – the debut of a token issued by next-generation hedge fund startup Numerai is providing a glimpse at how alternative models could take shape as the market matures.

Announced today

, Numerai has released 1.2 million 'numeraire' tokens, a cryptocurrency it's already begun to allocate to the distributed network of 19,000 data scientists that contribute work and help improve the calculations it uses to make real bets on the stock market.

Launched in 2016 and funded by Union Square Ventures and AngelList founder Naval Ravikant, Numerai has raised $7.5m to offer a solution to what it described to Wired as a lack of coordination and collaboration in the global stock markets.

Originally, Numerai used bitcoin as a way to pay its distributed network of data scientists. However, beginning today, it will now use a combination of ether, the cryptocurrency that powers the ethereum blockchain, and its own ethereum-based token, to incentivize users.

Xander Dunn, software engineer at Numerai, explained:

So, in a sea of competing tokens, what makes numeraire valuable? As Dunn told it, there are several reasons, the first of which is that they are tied directly to the company's core operation: gathering data and predicting stock market outcomes.

When data scientists want to lock in a prediction, they send numeraire to a smart contract which then holds the funds until the performance of the submitted predictions can be judged. Those who issued predictions that performed well earn ether – and have their numeraire returned – while those who didn't have their numeraire destroyed.

"In a sense, numeraire is mined by data mining Numerai's data, and submitting predictions is the proof of work," the company wrote in a February blog post.

It's this integration of the token into the project's economy that may be what sets Numerai's token apart from the wider array of token-issuing blockchain projects. And it has already caught the interest of some of the nascent market's earliest thought leaders.

While largely absent from headline-grabbing ICOs of late, Polychain Capital is among those interested in the Numerai token, even if it was restricted from purchasing it in any pre-sale. (As there was no funding, no early investors were in on the token).

Ryan Zurrer, a principal at the token-focused hedge fund, has been among the more critical of tokens that seek to function like traditional securities.

Zurrer said of the Numerai scheme:

As explained by Dunn, the token aims to promote a virtuous cycle, reinforcing behaviors the network wants (like use of the Numerai token and its issuance and removal from the market) and discouraging those it doesn't (like the hoarding of tokens).

"Data scientists want more numeraire because you can win more money. So the more you stake, the bigger the payout for you," he said.

Of course, positive rewards would only have so much benefit. That's why Numerai also runs a 'staking competition' in which its users can risk losing the digital asset based on their confidence in the performance of their claims.

Still, the specificity with which this economy will function will need to be iterated.

In conversation last week, Dunn remarked that it wasn't even yet decided how many numeraire would be issued on the first day. He also acknowledged the hard cap of 21 million tokens is somewhat arbitrary (necessary only to ensure the number of tokens is finite), and not a scientific or strategic figure.

Overall, the comments indicate the current period of development is likely to persist as startups attempt to determine how best to incentivize distributed networks of users.

Already, Numerai has changed its rewards payouts so that results are less skewed in favor of the best performers. Whereas before, first place may have earned $1,000 in tournaments, on 11th June this figure was reduced to $400 for first place, $353 for second place and $312 for third place as part of a change in strategy.

"We think this gives a better incentive for data scientists to build robust models that reliably place high," CEO Richard Craib wrote in a post at the time.

Still, the company is hoping to keep an open mind and maintain a collaborative dialogue with users as it seeks to expand its model after launch.

"The interaction of speculators, exchanges, the price of Numeraire and data scientists is hard to predict at this point so we will change the mechanisms as we learn from you," Craib continued.

Going forward, the launch of an initial set of digital tokens adds another aspect to an already operational company.

As such, Dunn expressed his optimism that the token will now benefit those it is intended to serve – the data scientists helping to improve the outcome of its trading. Yet, given the recent excessive run-ups in token value, he also commented on situations in which Numerai might become too valuable, though he doesn't believe this is likely.

"That's something we joked about cryptos are so hot right now, these people are going to make so much money. Some would come back even if they were made rich, but a huge majority of the world's data scientists have never used Numerai," he remarked.

For now, it remains to be seen how speculation will impact the secondary market for the token. As for where he predicts the market will debut, Dunn suggested a valuation of $15 per Numerai token, or a $30m market cap.

"I think that's it's completely within the realm of possibility," he said.

Given that some new tokens have debuted to $1bn market caps, that number could well end up being a conservative estimate.

Image via Numerai