The Kentucky Derby may be the best-known stakes race happening in the equestrian world this weekend, but it’s hardly the only one.
On Zed Run, a digital horse racing platform, several such events take place every hour, seven days a week. Owners pay modest entry fees — usually between $2 and $15 — to run their steeds against others for prize money.
The horses in these online races are NFTs, or “nonfungible tokens,” meaning they exist only as digital assets. You can’t pet them or feed them carrots by hand. You can’t sit in the stands sipping mint juleps while they sprint by.
But, unlike the vast majority of NFTs — which correspond to GIFs, images and videos that can be kept as collectibles or sold for profit — each digital horse constitutes what Zed Run’s creators call a “breathing NFT.”
“A breathing NFT is one that has its own unique DNA,” said Roman Tirone, the head of partnerships at Virtually Human, the Australian studio that created Zed Run. “It can breed, has a bloodline, has a life of its own. It races, it has genes it passes on, and it lives on an algorithm so no two horses are the same.” (Yes, owners can breed their NFT horses in Zed Run’s “stud farm.”)
People — most of them crypto enthusiasts — are rushing to snap up the digital horses, which arrive on Zed Run’s site as limited-edition drops; some of them have fetched higher sums than living steeds. One player sold a stable full of digital racehorses for $252,000. Another got $125,000 for a single racehorse. So far, more than 11,000 digital horses have been sold on the platform.
Alex Taub, a tech start-up founder in Miami, has purchased 48 of them. “Most NFTs, you buy them and sell them, and that’s how you make money,” Mr. Taub, 33, said. “With Zed, you can earn money on your NFT by racing or breeding.”
His stable is still growing. He recently bred a digital horse for his 5-year-old daughter. “She comes home from school and wants to race it,” he said. “She named her horse Gemstone, and Gemstone had two babies named Rainbows and Sparkles.”
Each race has a 12-horse limit, the lineups of which are based on the qualities and past performance of each horse. The site uses an algorithm that runs 10,000 random outcomes and chooses one as the race’s condition.
The races take place around the clock and are streamed on both Zed Run’s Twitch channel and the company’s website. Zed Run also operates a Discord server, where people can follow race results, trade tips and share third-party tools for analyzing data. Users livestream their own races and repackage clips for YouTube and Twitch.
“There are people who are becoming mini influencers in this ecosystem themselves,” said Yair Altmark, a venture capitalist in New York who has spent over $300,000 on digital horses. “And horses that are getting credibility on these streams and exposure on the Discord are making a name for themselves.”
He anticipates making much of his money back….