The NFT horse racing platform featuring digital thoroughbreds isn’t just a game — it’s big business.
For well over a century, the Kentucky Derby has been the pinnacle of horse racing. The annual tradition held on the first Saturday in May has persevered through the Great Depression, both World Wars, and most recently – albeit with a brief postponement to September – a worldwide pandemic.
The two-kilometer race at Churchill Downs in Louisville, Kentucky makes up the first leg of the vaunted Triple Crown, but boasts a level of timeless pageantry the Preakness Stakes and Belmont Stakes can’t quite match. The Derby is synonymous with the very idea of horses racing for our entertainment, as well as our monetary gain.
But now, with the 147th Run for the Roses arriving Saturday, the Kentucky Derby may finally have some compelling competition for hearts and minds the form of digital, non-fungible, blockchain-powered horses called Zeds.
Zeds are just one of the many digital assets to experience a breakout amid 2021’s ongoing NFT explosion, but they may be the most intriguing. Consisting of collecting, investing, gaming, and breeding in equal proportion, it’s not a challenge to see why users are showing up in droves to fork over very real cash and race about 1,500 Zed Runs per day.
While the barrier for entry used to be about $30 per horse at Zed Run’s launch back in 2019, a top-flight steed these days can cost you upwards of $10,000, as Yahoo notes.
But this week, with Kentucky Derby buzz in full effect, one sold for a full $125,000.
While that’s still a far cry from what you’d have to pay for a next Derby-worthy stallion from a championship bloodline – that would set you back at least $300,000 in many cases – the combined resale value of the approximately 21,000 Zed Run horses in existence is around $30 million as of this writing.
Among NFT platforms geared toward sports fans, Zed Run has a long way to go before it reaches NBA Top Shot’s rarified air, what with the upwards of $550 million in sales its highlight “Moments” have generated. However, its potential is immense thanks to the gamification of its format beyond simply collecting NFTs for collecting’s sake. From Zed Run’s scientific approach to breeding and developing stables to the competitive edge needed to win races, the platform offers players an uncommonly interactive, human element.
Similar to the digital horses’ real-life counterparts, championship lineage is key to performance – and high market value. Additionally, those fortunate enough to own a Zed from a desirable bloodline will be able to charge higher stud fees for access to all their (virtual) genetic gifts.
All horses are meant to be publicly available to breed in the earliest versions of the program, which is still in beta as of this time, but eventually, private breeding will be available. At that point, those with the most prized Zeds can keep their goods in the stable.
And drive up prices even more.
Zed Run’s money-making opportunities aren’t just limited to buying and selling horses, breeding them, and winning races, however. In the future, players will be able to purchase virtual land and erect their own race tracks as well. They’ll be able to charge entrance fees and even land sponsorship money as crypto-friendly companies consider the unique opportunity to splatter their logos around the glitziest of tracks.
And it must be noted that wherever horse racing goes, gambling follows.
Virtually Human Studio, the company behind Zed Run, says implementing the time-honored hobby of laying dough on the ponies is under consideration. As more and more US states legalize betting and daily fantasy continues to thrive thanks to the ease of competing and playing straight from your phone, such a marriage feels like a natural progression.
“It’s definitely a feature request from our community,” Rob Salha, Virtually Human Studio’s co-founder and COO, told The Athletic this week. “We are researching and investigating and working with some of the brightest minds to see how to get to wagering.”
It’s worth noting that the idea of NFTs that can evolve or breed to create new NFTs isn’t new. Zed Run has simply taken the model a big step further.
CryptoKitties are some of the earliest NFTs, coincidentally developed by Dapper Labs, the company behind NBA Top Shot. As the name implies, those blockchain-backed felines can be bought and bred, creating new digital kitties with unique characteristics based on a complex system of virtual genetics. But the competitive aspect of Zed Run spins this concept into a whole new kind of NFT experience, introducing elements of utility and sport that other platforms haven’t managed to capture.
Whereas it was hard explaining to a Gen X-er the idea of “owning” an NBA highlight that’s viewable on YouTube for free, the enjoyment Zed Run promises is much easier to grasp, making it a better sell to a broader audience. And for a generation that has grown accustomed to paying for all aspects of customization and enhancement in their video games via DLC and loot boxes –the Zed Run audience consists of “mostly younger males,” according to Yahoo – many of the platform’s conventions will already feel familiar.
While the sheer explosiveness NFT boom seems to be leveling off just a tad as celebrities dive in and the space grows more commercialized, Zed Run’s potential for growth still rings true.
An added gambling element is not just logical, but a necessary one that will extend the life of this trend, perhaps indefinitely. After all, gambling on horse racing, as random and infuriating as it is, remains an age-old tradition that will never truly go out of style.
With this in mind, applying the same thinking to NFT horses feels like the most natural of next steps. And that means here and now, Kentucky Derby favorite Essential Quality has some competition from Zed on our screens this weekend.
And perhaps most importantly, in our wallets.