The following is not to be considered Financial Advice and should be considered for entertainment purposes only. As always. Duh.
It’s easy to be bullish about Zed.Run…
You may have noticed that Zed Guru is an entire website & podcast dedicated to the topic.
However, that positive excitement doesn’t have to cloud your thoughts when it comes to the investment side of Zed.Run.
Often in our articles and discussion we talk about “investing responsibly”. That’s a great phrase and it’s smart; but what does it really mean?
Of course, you should never put money that you ‘need’ into Zed.Run. That’s (hopefully) obvious considering we are purchasing digital NFT’s that simulate physical world horse racing; a risky endeavor in and of itself.
But today we are introducing the idea of a “Break-Even Day” and trying to give you an idea of what realistic profits might look like in Zed.Run.
We’ll also emphasize some important ideas that do not seem to be represented enough in the Discord and Twitter conversations that we see on a day-to-day basis.
First Things First: How to Track Your Spending & Revenues
Personally, I deposit USD and withdraw USD through Coinbase.
(PayPal > Coinbase > Metamask > ETH to WETH)
I track what I put into Coinbase and what comes out of Coinbase via my PayPal account.
I don’t worry too much about individual transactions or count a singular stud fee as revenue until it comes all the way out of that withdrawal chain … you should use more in-depth personal tracking if you’re not sure if specific activities are profitable: Using KnowYourHorses.com with a specific date filter (when you bought a horse) is also quite helpful.
Do I Need a Break-Even Day?
No, not really.
Some people don’t want or need one. Many people play Zed.Run for fun and have no intention of needing to get back their initial “spend” into the game.
Personally, I think it’s really fun to be a part of the Zed Community; but I am more interested in my stable as an investment than anything else.
This is how I am choosing to personally play the game.
Here’s why I think having a “Break-Even Day” in the near future is a good financial practice:
- Bred Horses will continue to be created (supply increase)
- Bred Horses could potentially continue to get stronger (potential reduction of current assets)
- Interest may fall off in Zed.Run at any time (reduction in market prices)
- Regulation (or other outside catastrophe) could come to Zed.Run at any time (full out closure of the game)
In my opinion, it’s not that great of an idea to keep kicking the can down the road, so to speak.
Sure, it sounds great to continue buying up horses and breeding and growing your stable. Right now, you might be starting with 10 horses. And you could hypothetically build that out to 100 horses without really spending too much more into the game if you are managing things correctly.
But if your initial spend was $5,000 USD – the question becomes will the 100 horses be worth more in 2 years (picking numbers out of the air here for an example)
To be clear: they definitely COULD be.
Or…. One of the scenarios above plays out and they could NOT be.
We don’t really know.
There are potential situations where VHS runs into more issues than expected running Zed. Maybe government regulations cut the game’s availability, Polygon has issues, or quite simply 10 other games come along with some sort of technology that squashes Zed.Run. It could happen.
To be VERY clear – I do not expect any of these things to happen and I have a ton of faith and respect for the team.
But the chance of these things happening is not Zero. Small? Maybe. Zero? No way.
Personally, I’d much rather have my initial investment covered and have a stable of maybe 10-20 horses from that original 10 and be completely able to profit no matter what happens to the ecosystem.
Whatever you decide, just be sure that you are making a conscious decision and be intentional about what potential gains would make you happy and what potential losses you are okay with as you move forward.
I’ll be moving towards my “Break-Even Day”, target date: 10/31/21.
Where is the Biggest Earning Opportunity in Zed.Run?
In my opinion: Breeding.
This is definitely the case if you can get Stud Fees reliably.
Sure, the racing profit is AMAZING if you have a top 100 or maybe a Top 1000 horse out of the entire population of 60,000+… but it’s not all that sustainable or worth the time for most of us to be considered our “main” source of income from Zed.Run if we don’t have a beast in our stables.
Keep in mind – the rake is an absolute killer when it comes to Zed. (Rake means how much % Zed takes from the Paid Racing Pool for each Race)
This is something that has been said is subject to change, but in the current environment… it’s pretty tough to beat. The current rake is 10% – and it’s something to watch for as to whether that will change or not.
What is the Most Incorrect Theory Regarding Making Money with Zed.Run?
The following statement is a major Red Flag that someone is thinking about the Zed.Run ecosystem incorrectly:
“We gotta find some more new players mannnn – the floor keeps going down”
Of course it does.
It’s highly unlikely you’ll be able to print ETH forever without much strategy.
Right now, a player who owns a Z9 Genesis Male and a Z9 Genesis Female (in two separate stables to minimize Breeding Cost) can create a Z18 Legendary for .0158 ETH or roughly $50 USD as of this writing.
Basically, these 2 assets could crank out that Z18 Legendary for $50 every 28 days.
As of this writing (8/12/21) the cheapest raced Legendary on the market is worth .0368 ETH ($110) and unraced is .06 ETH ($185)
Now, I would argue that it’s absolutely possible for these Z16-Z20 Legendary Horses to be worth more than that .0158 ETH – even far into the future when there’s thousands and thousands of them.
It is reasonable that Genesis will get bred with other Breed types and even be held for other reasons… but there will still probably be thousands of Legendary horses being created each month, requiring massive demand to keep the floor steady.
It’s certainly not a guarantee that the worst Legendary will be worth more than 2x (4x unraced) Breed Cost.
Keep in mind, that’s for Legendary — the rarest Breed Type available as a bred horse which hypothetically has a lot more Breeding Potential than that of a lower Breed like Cross or Pacer.
The worst Cross and Pacer horses that have been proven to be Bad Racers, Bad Breeders, and have a weird name…. what value will the Community give to them?
As far as the utility of the NFT goes — It should be very close to $0.00.
Key Takeaway: Be careful when making projections for sales and hypothetical profits you can make 6 months from now with data and Listings/Sales Data from Present Day.
My Personal Break-Even Target Date / Genesis Male Theory
If you’re a regular reader here or listen to the Zed Guru Podcast at all, you’re probably sick of two words that we love to talk about most on ZedGuru.com…. Say it with me: Genesis! Males!
These Genesis Males fit in nicely with the idea of a “Break-Even Day” and it’s why I’ve built my stable around them.
The (CURRENT) minimum Breeding price for a Genesis Male is .036 ETH.
You multiply this by .56 (7 day placement in Stud Farm) to get .02016.
So for simplicity’s sake, let’s call it .02 ETH that I get any time someone selects my Genesis Male to breed with in the Stud Farm.
These Genesis Male horses (currently) can make 3 offspring per 28 days, so with some simple math we can come up with an “earning potential” from a Genesis Male:
.036 ETH * .56 = .02 ETH received per Stud Fee
.02 ETH * 3 = .06 ETH received per 28 days if 3 covers used
.06 ETH * 13 (28 day periods in a year) = .78 ETH
At current ETH prices of roughly $3,000 – that means that a Genesis Male has a rough earning potential of .78 ETH or $2,400 per year.
That’s a pretty cool asset!
But wait you ignorant ZedGuru.com website…. I can’t even get ONE cover on my Genesis Buterin let alone 39 in a year. What are you smoking you moron?
There are 2 factors that everyone needs to be aware of when it comes to the current ecosystem and Genesis Buterin Males failing to pick up many stud covers.
- The Correct Breeding Minimums as given to us by Zed.Run have been broken since June 29th, 2021 when Breeding opened. There has been no communication about why these minimums are still broken after 6 weeks or when they will be fixed; other than that they are a ‘priority’. This error is allowing Genesis Naka, Szabo, and Finney ALL breed at the same price of Genesis Buterin – inflating supply in a massive way.
- Zed.Run Breeding was closed for months until June 29th, 2021. This means that Exclusive Females (whose Owners we believe will want to breed with Genesis Males to hold their Breed Type) will only be eligible starting on August 24th, 2021.
Elite Females, who we believe will want to breed with Genesis Males for the same reason, will be born on August 24th and will be eligible to breed starting on September 21st, 2021.
It stands to reason that both after August 24th and September 21st (and potentially each 28 day period after) we will see more and more demand for Genesis Males in the Stud Farm (especially applying to the cheapest Buterins if we can get the Minimums fixed)
These two reasons are why we believe Genesis Males are extremely undervalued and why many could truly reach that maximum earning potential of .78 ETH in the next year.
It should be noted that the “.036 ETH” is only a minimum Breeding Fee so some Genesis Males who show strong offspring could even go higher than that .78 ETH figure. Bad breeding Genesis Males could struggle to fill Studs. Your profits are only as strong or as week as the market decides your horse is.
It should ALSO be noted – that ALL of this is subject to change if Zed.Run decides to mess around with the Breeding Minimums.
Finally, all of this brings me to my personal stable.
I’m not a whale by any means and my Stable consists of 8 Genesis Males who are Z8 (2), Z9 (2), and Z10 (4) that have been purchased for a rough average of .2 ETH each from April 2021 – July 2021.
After receiving some initial Stud Fees so far, I now have a “Break-Even” Target Date of October 31st, 2021.
If that projection is hit successfully, I’ll have 8 assets capable of producing .06 ETH (or more!) per 28 days that have been completely paid for.
I can choose to re-invest, although I think we’ll see Genesis’ prices start to shoot up by that point. I could leave the money in ETH as another form of investment, or withdraw to USD to take the gains.
This set-up works for me. You have to choose the path that works for you and your financial situation!
There are tons of other strategies to be used in the game.
The Genesis Male Theory can have drawbacks – the biggest 2 being that your Stallion may make poor Offspring and Bred Horses may excel far beyond the runners that were initially created as Genesis.
The best news here is that you get to determine your own personal strategy about how you want to proceed.
Be sure to do it intentionally and come up with a plan that works for you and your finances.
Most importantly, come up with a timeline about when your funds you put into the game will actually be available for withdrawal.
Have you calculated what you think your Zed.Run “Break-Even Day” is? Is this a brand new idea for you?
The best way to grow is to exchange ideas with the Community — share your plan or ask a Question below!