Published 2026-10-14
Skin in the game
Skin in the game means the party making a claim has something to lose if it is wrong — staked capital, a published methodology, or an auditable record. Without it, there is no cost to being wrong.
What it means
Skin in the game means the party making a claim has something to lose if it is wrong.
This is the basis of rule 6 in the standards: credibility requires downside.
Why it is the strongest filter
Most ways of evaluating a claim rely on the claim being checkable. Skin in the game works even when it is not:
- Staked capital — Numerai’s model, where participants stake tokens that are burned if their predictions are wrong.
- A published methodology — a wrong method becomes visible and damaging to the author.
- An auditable record — a claim that can be checked against what actually happened.
Advice sold by subscription, where being wrong costs the seller nothing, is the opposite. A claim that costs nothing to get wrong has no pressure to be right.
How to check
Ask: what does this person lose if they are wrong?
If the answer is “nothing” or “a customer”, apply rule 6.