DeRace Deep Dive

Michail Palierakis

Feb. 15, 2023

Investment Highlights

Currently, the floor price of a Racehorse NFT is $47.40.
Putting your horses to race is the main in-game activity.
To race, you will need to spend $DERC, and the first three places earn a portion of the total prize pool.
“Learning” your horse is important to maximize winnings, as each horse has hidden stats that affect the race’s outcome based on the type of hippodrome.

Source

Introduction

The DeRace platform connects millions of Racehorse fans in a community where you can buy, breed, and race your horses, as well as stage races in your own hippodromes. All horses are NFTs that you can trade with other players. You receive $DERC, the game’s utility and reward token when you race with your NFT horse. Winning chances are calculated based on various parameters, such as reaction time, speed, and stamina. Each horse has its preferred race track surface, which affects those parameters.

Tech/Infrastructure

DeRace runs on the Polygon blockchain, an Ethereum L-2. To play the game, you will need to install a compatible wallet such as Metamask, connect it to the Polygon Network, and buy an NFT Racehorse through a secondary market, such as Opensea. You will need some $DERC for your in-game needs, and some $MATIC for transaction fees.

History

The GameStarter platform was the first to introduce DeRace NFTs in June 2021, with Mintable following next. In September 2021 DeRace launched on the Polygon Network as it was first released on the Ethereum network and this caused some implications in the user’s experience due to high transaction fees and low transaction speed.

After the oversubscribed presale round which raised $1.7M, DeRace continued with a successful IDO on DAOmaker and an IEO on Gate.io. Soon, UniSwap and PancakeSwap introduced $DERC. In addition, DeRace NFTs were the first to launch an IGO on the Binance NFT Launchpad. Crypto.com was the first exchange to list $DERC.

In August 2021, DeRace integrated Chainlink VRF for fair randomness within Its NFT Racehorse platform.

Other partnerships include GameFi, OpenOcean, Unicrypt, Charged Particles, Alex Becker, Michael Owen, and KManuS88.

In November 2021, Quickswap introduced $DERC LP Staking.

In the past, the team has also partnered with CoinMarketCap to reward users with Racehorse NFTs in exchange for Diamonds earned through the tech giant’s platform.

The DeRace beta was released in December 2021. In January 2023, DeRace launched NFT Starter packs on the BNB Chain.

Management Team

CEO & Co-founder: Adomas Juodišius

Adomas is a skilled system architect with more than 10 years of project development experience. He also has a solid background in software as a service (SAAS) project development, cybersecurity, and online gambling. In Lithuania, he founded and serves as CEO of Media Bubbles, a business that offers digital marketing and software development services.

CMO & Co-founder: Adelaida S.

Adelaida graduated from Vilnius University with a Master’s in digital marketing. She has been working in the sector for more than seven years, developing several market entry strategies that have won awards while collaborating with several influential people across the world. Adelaida and Adomas co-founded Media Bubbles, and she has held positions as head of digital at the top Baltic advertising agency and marketing director for a major global extreme sports company.

CTO: Kristijonas Sendrauskas

Kristijonas has years of experience managing both internal and external development teams. He has expertise in developing Node.js-based applications as a full-stack developer. Along with DeRace, Kristijonas founded Ivejas, a digital agency located in Vilnius that develops mobile and online apps for customers throughout the world.

Investors (VCs)

In a private investment round that was oversubscribed, the DeRace team raised $1.7 million in July 2021. In a future IDO on DAOmaker, the team raised another $360K and $40K through an IEO on Gate.io Startup. The DeRace team received funding from well-known companies such as Animoca Brands and DAO Maker. The following VCs make the full list of DeRace investors:

CMS Holdings
Wings Ventures
AU21 Capital
MGNR
Hillrise Ventures
X21 Digital
AC Capital
UG Ventures
Dweb3Capital
Evangelion Capital
LD Capital
ReBlock
Raptor Capital
DWeb3 Capital
Kyros Ventures
Metrix.Capital

The game features a strong community with 184.5K Twitter followers and 78.6K Discord members. A total of 7,295 horses make up the DeRace NFT collection. 10,687 unique users hold $DERC.

Market Stats / Tokenomics

$DERC has a total supply of 120M and a circulating supply of 96M, resulting in a $23.5M market cap. $DERC has a 24h volume of $253K. More specifically, you can read the token metrics below:

In the following graphs, you can see the token emission schedule, starting from August 3rd, 2021, and lasting until February 1st, 2024:

Price Charts

The price of $DERC has increased in the past month from $0.16 to $0.26, following the market trend.

Revenue

DeRace business model is monetized in a variety of ways:

NFT sales: On the DeRace platform, there will be drops where you can buy assets like horses and hippodromes.
In-game ads: As a hippodrome owner, you can use our platform to advertise your hippodrome and attract more players to race on it.
Transaction fees: Every transaction on the site, including NFT horse sales, races, bets, breeding, deposits, etc, will be subject to a minor charge.

Game Mechanics

Game Loop

A balanced game loop features $DERC as the main utility and reward token, as most in-game activities require $DERC, such as racing and breeding (fees), and buying sugar cubes and NFTs. $DERC is earned through racing, selling Equipment and Racehorse NFTS, and by referral programs, bug reporting, and race hosting. In the future, ad watching and selling racing analysis and predictions will also allow you to earn.

Racehorses

Racehorses are the primary NFTs and in-game assets. They are necessary to start playing the game, participate in the races and earn payouts. As with most gaming NFTs, they come with specific attributes that make up their rarity.

In DeRace, the tier (Olympian, Demi-God, Alfa, Beta, and Omega) determines the rarity of DeRace horses (Olympian being the rarest, while Omega is the most common).

You can buy a horse from OpenSea. You will also need $MATIC for transaction fees and $DERC for your in-game needs. Additional in-game NFTs such as Horse Equipment and Liquid Love (breeding) unlock more opportunities.

Your $DERC tokens will appear visible next to your profile picture and under the “My Wallet” page. Once you have deposited all the required in-game assets, they can be found under the “Stables” tab.

Racing

Go to the “Races” page to join any race that is currently running. Choose races based on the hippodrome, the length of the racetrack, the surface, the entrance fee, the tier, and the equipment needs.

Select your preferred race from the list and click “Register for race.”
Pick a horse for the competition.
Cover the admission cost
The winners are displayed on the “Results” tab after the race, and $DERC awards are automatically added to the winners’ wallets.
The horse racing cool-down begins after the race.

DeRace NFT horses perform differently on each hippodrome. You can choose between dirt, turf, and synthetic surface. Each horse will have at least one “preferred” surface that it will be more likely to excel on than other surfaces.

Each DeRace NFT horse has unique hidden factors that have an impact on the horse’s overall performance. These characteristics are stamina, speed, and reaction time.

Reaction time: How quickly your horse leaves the starting gate and enters the race.
Speed: Determines the top possible speed at which your horse may compete.
Stamina: The time a horse can maintain a particular pace. Stamina has an impact on the speed parameter.

Although they increase a horse’s chances of winning the race, the horses’ hidden parameters do not ensure it.

An NFT race may have up to 12 horses. A percentage of all entry fees are distributed among the first three horses

Hippodromes

There are currently five hippodromes in the DeRace metaverse: Greenfield (dirt surface), Paradise Hills, Nordic Lights (both synthetic surface), Emerald Gardens, and Sakura Path (both turf surface).

Greenfield

Track length: 8 furlongs
Track surface: Dirt
Races: 2–15 furlongs
Stamina consumption: High

This hippodrome consumes the most stamina when compared to other surfaces. Low-endurance horses sometimes do badly in Greenfield, but they still have a chance to place high on the leaderboard.

Paradise Hills

Track length: 12 furlongs
Track surface: Synthetic
Races: 2–8 furlongs
Stamina consumption: Medium

The Paradise Hills and Nordic Lights Hippodromes have a medium stamina requirement, making them ideal for horses with average to high stamina. On the synthetic surface, all horses may run their best races over shorter distances. The ideal hippodromes for testing stamina are these since their consumption continually decreases during the race.

Nordic Lights

Track length: 12 furlongs
Track surface: Synthetic
Races: 9-15 furlongs
Stamina consumption: Medium

Emerald Gardens

Track length: 16 furlongs
Track surface: Turf
Races: 9–15 furlongs
Stamina consumption: Low

Turf is the least stamina-demanding surface, making the Emerald Gardens Hippodrome a good choice for horses of all stats. Long races at Emerald Gardens are ideal for horses with moderate to high levels of stamina. Speed is the major factor that affects the horse’s performance in this hippodrome.

Sakura Path

Track length: 16 furlongs
Track surface: Turf
Races: 2–8 furlongs
Stamina consumption: Low

Turf-surfaced Sakura Path Hippodrome is a good choice for horses of all stats because it has the lowest stamina requirement. Similar to the Emerald Gardens Hippodrome, speed is the key factor affecting the NFT horse’s success here.

Future Hippodrome Plans

Hippodrome ownership will soon be transferred to the community and set in NFT hippodrome tokens. Each NFT token in a hippodrome is worth 10,000 tokens, therefore you may own a portion of the entire hippodrome.

You become the owner of the hippodrome if you possess more than 50% of all tokens, which gives you the authority to oversee races and run the hippodrome. You set the race’s entry costs, prize money, and other requirements. Each hippodrome owner receives a portion of the entrance fees. Additionally, you may plan the banner placements and negotiate sponsorship partnerships with other initiatives and businesses.

NFT Horse Equipment

Ten different categories of NFT horse equipment exist. The hidden parameters are buffed or debuffed accordingly, based on the horse’s wearables. You can buy Equipment through OpenSea or by opening an NFT Chest with a matching NFT Key.

Depending on the type of equipment, its rarity level, and the horse’s level that it may be attached to, NFT horse equipment has varying stats.

However, only in races where equipment is allowed do equipment buffs and debuffs affect how well a horse performs (marked with a pink horseshoe symbol under the race requirements). Your NFT Racehorse will instantly lose all NFT wearables for that particular race if you sign up for races with No Equipment. This means that in races with no equipment, NFT equipment won’t have any effect on a horse’s performance.

Breeding

You will need a mare and a stallion with no breeding cool-down to breed a new horse, along with a Liquid Love NFT (which can be purchased on OpenSea), 50 $DERC as a breeding fee, and two horses. You may also rent horses for breeding. Currently, breeding is only available for Gen0 Racehorses.

When breeding is finished, the parent horses and the newly bred NFT horse return to your in-game wallet and are available for racing.

Additionally, the horse breeding cool-down will then begin and will last from two weeks to two months, based on the horse’s breeding cooldown time. If you equip an NFT blanket before breeding, you can shorten the breeding cool-down for the horse using it.

You can breed horses by going to the Inventory section, selecting the first horse, then selecting Breed, and selecting the second horse.

Sugar Cubes

Sugar Cubes are the primary in-game currency that you can convert into useful NFTs like NFT Chests and NFT Keys of different levels. To collect Sugar Cubes, you have to complete daily, weekly, and monthly missions, unlock achievements or buy them with $DERC from the Sugar Store.

XP & Levels

You can level up your NFT racehorse by accumulating experience points (XP) with in-game actions. The main way to earn XPs is via competing in races. Your XP from each race will be doubled if you finish in first, second, or third place. With each level, more XP is needed to level up.

There are a total of 80 horse levels. You can choose to equip horses of higher levels with more items.

Missions & Achievements

By completing missions and achievements, you can earn distinct rewards, XP, and Sugar Cubes.

Specifically, the NFT horse’s owner has more chances to win rewards in the Spin-The-Wheel minigames when the horse’s achievements, such as total distance run, races competed in, best/worst time record attained, and other categories are unlocked.

ROI Scenarios

Let’s take a scenario where races have an entry fee of 1 $DERC and a prize pool of $11.40 (1st place earns 6 $DERC, 2nd place earns 3.60 $DERC, and 3rd place earns 1.8 $DERC). You compete in 10 races daily, of which you place 1st, 2nd, 3rd place twice, and six times you are off the podium. The total entry fee you spent is 10 $DERC and your total earnings are 14.2 $DERC. This means you earned 4.2 $DERC in a day ($1.08). You bought the racehorse from Opensea for 52 $USD, which is close to the floor price. This implies an ROI of 48 days or an annual return of 660%.

Roadmap

The next feature that is scheduled on the roadmap is the Renting feature, which will allow you to rent other players’ horses for racing and breeding. Next, an option to buy $DERC with fiat currency will be implemented. Other additions to the game in the future are:

Q2 2023:

New NFTs with unique mechanics (Jockey NFTs)
An in-game marketplace
Leaderboards
User achievements
Challenge races
Race streaming & Discord integration
Community owned hippodromes

Q3 2023:

Teams & clubs
Guild Management System
Onboarding guilds
Solution for Racehorse racing streaming platforms
Overall improvement of the game platform

Q4 2023:

DeRace Layer 2 cross-chain solution
DeRace mobile app for iOS and Android
Integrations with external platforms
3rd party wagering solution integration
Ads services integration

Key Takeaways / Recommendations

The team has managed to initiate and maintain strong partnerships with big names in the tech industry, such as CoinMarketCap, Unicrypt, DAO Maker, Binance NFT, Binance Custody, and Engines of Fury.
The game has one of the largest communities in Web3 gaming based on their numbers.
Based on CoinMarketCap, $DERC holds the 33rd place amongst Play-to-Earn coins.
The team has continually shipped updates on their roadmap.

Key Risks

If the burning mechanisms can’t keep up with the earning ratio, the coin’s value could significantly drop due to inflation.
The sustainability of the in-game economy is a key risk.