Valuation of MOBOX MOMOs
Simple method based on $MBOX price and hash rate
TLDR: Jump to the formulae. Updated mid August, 2021.
Late August follow-up here: MOBOX MOMO Cycle Top?
Background and basic economics
MOMOs are NFT-powered creatures created by MOBOX, which exist on the Binance Smart Chain. Like with other successful blockchain videogames (e.g. Axie Infinity), MOBOX has managed to create an interesting ecosystem, fun gameplay, and rewarding economic rules (implemented via smart contracts).
To start, you can purchase mystery boxes from the market using BUSD, and open them to mint a random MOMOs, creating supply (an earlier system based on the $KEY token and in-game chests is also available). it’s also posible to sell and buy specific MOMOs from the market. MOMOS you own are automatically staked in the MOMO Farmer system (more DeFi than GameFi if we’re honest), and mine the $MBOX token which is required by many game functions, creating value and demand.
Both KEY and MBOX are BEP-20 tokens which can be traded on independent platforms like Pancake Swap.
See this general MOMO guide for more details.
Market growth
Written in late July, 2021
The MOMO market has been rallying recently. When I first noticed the game, I was able to acquire a level-1 Rare MOMO with 27 hash rate (not bad) for BUSD$174. Similar options are currently listed comfortably north of $400.
Given the explosive growth this market has seen in recent weeks, any reasonable person would be tempted to sell their assets for a 3x + gain. But I’m not selling, in fact I’ve added a couple more MOMOs to my collection during the run.
Not only am I having fun playing the Token Master game (for which you need at least 3 rare MOMOs), but also I’ve developed a simple approach to determine whether these NFTs are cheap or expensive at the present time, which justifies my decision to keep them (at least for now).
Disclaimer: this is not financial advice and I’m not a financial professional.
The ideas expressed here are my personal opinion and many assumptions on the dynamics of this market may overlook severe risks that may cause a total value collapse. It’s possible to loose 100% of your investment.
Valuation formulas and steps
1. Capture the MOMO’s cost and hash rate (HR), e.g. $15 for a Unique MOMO with 3 HR; and current MBOX market price, e.g. $0.90 .
2. Hash Point Cost = MOMO cost / MOMO HR
E.g. $15 / 3 = $5 per hash point
The HPC is an easy metric to shop for when browsing the market. For Rare MOMOS for example, the lowest HPC out there now is around $3.5 .
3. Go to Mining Camp and calculate the
Hash point value = daily distribution / total hash power.
E.g. 200,000 MBOX / 9,000,000 ≈ 0.02 MBOX (roughly)
4. MOMO’s dividend = HPC × hash point value × MBOX price
E.g. $5 x 0.02~ x $0.90 = $0.09~
5. MOMO’s daily ROI = dividend / cost
E.g. 0.09 / 15 ≈ 0.005 or 0.5%
In this simple example, you can estimate around 200 days (1/0.007) to recover the investment— just based on the MOMO’s HR. That’s under 7 months (not horrible but could be better).
This assumes none of the parameters change in the near future, which is of course incorrect. However, as long as the price of MBOX grows at least at the same rate as the total hash power, you can rely on this estimate.
Keep in mind that other profit (or loss) can come from trading MOMOs or from playing the games (MBOX rewards, BOX lotteries, etc.), improving your ROI.
How to find deals!
The first thing to realize is that it won’t be cheap to enter this market now. We’ll have to minimize our HPC (Hash Point Cost) first, and then determine what level of investment is needed. To this end, the most important piece of knowledge is that complete MOMO collections get 300 bonus mining power —that’s a set of 4 MOMOs of the same family, one of each quality.
Since rares are the most expensive by far, let’s look there first by using the filtering and sorting tools of the MOMO market. Browsing through the market pages we need to calculate HPC (= cost / hash rate). For example from the second one seen below we can get an idea of current HPC levels:
$788 / 21 = $37.52 per hash rate point. Seems high, let’s keep looking!
Looking in the 2nd page, we start to find better options. For example the first one below has an HPC of $1166 / 132 = $8.83. Much better! You get the idea. The more some MOMOs cost, it’s possible that you’ll actually be paying much less for each hash power point.
But don’t forget about the MOMO family mining power bonus! Since other MOMO qualities usually have lower and more stable prices, you can easily update your calculations by adding the average cost of the other 3 MOMOS (currently around $60) to the first variable of HPC, and then add 300 to the second one. So for the previous example:
HPC = ($1166 + $60) / (132 + 300) = $1226 / 432 = $2.84
Now that’s a deal!
In my experience, so far the best HPCs out there have ranged between $2.50 and $3.00 pretty consistently, even as MOMO prices have gone up a lot. This is why I haven’t sold any one of them (yet). Sure, it’s more expensive to start investing here now, but the returns are just as good as before the big price boom of July (mining bonus was only 100 back then).
On the other hand, hash rate yield in terms of MBOX is constantly decreasing (due to a growing total hash power of more and more MOMOs staked in the game). But as I mentioned earlier, as long as the price of MBOX keeps up, your actual returns in US dollars are reliable, and so far it has, for the most part!
Open questions
The article is over 😬 These are just some hard-to-predict considerations that could change the market dynamics completely:
- BOX opening rate? Determines supply. Related to the TVL and BOX price
- Binance NFT boxes being dumped into the MOMO market (over 20k were sold while the market usually only has between 400 and 500)
- Total hash rate growth tend? vs. MBOX price cycles (boom & bust)