Photo Finish LIVE — $CROWN
*Disclaimer*
It is important to emphasize that the ensuing discourse should not be misconstrued as financial advice, but rather as an articulation of the Commish’s perspective. Readers will encounter objective assessments commingled with subjective speculation, therefore, do not consider any highlighted topic as a financial recommendation. Ultimately, you are responsible for your own decisions so please obtain information from trusted professionals before executing any financial strategy.
Disclosure: The Commish owns a considerable amount of PFPs, race horses and $CROWN, all opinions in this article are biased.
Introduction
Did you know that the gaming industry generated a staggering $200+ billion of revenue by the close of 2022? What’s even more notable is that 100% of those profits flowed solely into the coffers of the game creators.
But now, brace yourself for a game-changing upheaval driven by the revolutionary potential of Web3 technology.
Are you on the hunt for an avant-garde gaming experience that’s set to redefine the gaming future and offer the generational opportunity of being early to a budding powerhouse brand?
Look no further than Photo Finish Live (PFL).
Harnessing the power of blockchain and decentralized networks, PFL transcends traditional gaming boundaries, offering players an unprecedented level of ownership, interaction, and engagement. Get ready to dive into a virtual universe where every decision you make, from owning racetracks, to racing thoroughbreds, to buying and selling horses on the marketplace can be completely monetized by the players!
PFL isn’t just another game; it’s a glimpse into the future of gaming.
At its heart, PFL isn’t just about races; it’s about creating a vibrant and diverse community of passionate gamers, investors, collectors, speculators and wagerers. The decentralized nature of web3 technology ensures that decisions regarding the game’s evolution are made collectively, fostering an environment where player feedback and engagement drive continuous improvement. As the game evolves, so do your opportunities — whether you’re an aspiring racer, a savvy trader, racetrack owning tycoon or a dedicated breeder. The potential for innovation is boundless, setting the stage for a new era of gaming where players truly shape their destinies.
So, Commish, can people capitalize on this generational opportunity?
How do I obtain exposure to something I believe in?
I don’t have time to invest in a game, but I still want in, is there a place for me?
What’s the best way to get started?
Yes! Easy! Absolutely! Keep Reading…
There are multiple economies in the PFL ecosystem (read the economic overview by Third Time (TT)), but we are only going to focus on one of them today and that is the $CROWN economy. This economic rail underpins the features of racetrack ownership, a cornerstone to the ethos of Web3. Whether your desire to compete against other stables inside the oval is your primary pursuit, or not, this article will be relevant to anyone with the intellectual capacity to recognize an asymmetric opportunity.
This is the furthest thing from your run of the mill token that gets rugged within a 3 week period. STOP gambling on garbage and elevate your positions into actual revenue generating businesses.
Let’s get down to business… what is the sales pitch for owning a racetrack and/or owning this $CROWN token?
Yield. Yield. And… more yield!
This is a 13 minute article… TLDR:
- Accumulate and Stake $CROWN, the token used to claim ownership
- As long as races are running, you will earn yield in perpetuity
- Promote the game so the frequency of races increases, thus more ROI
- Racing and learning about the complexity of horses is NOT required
- Can participate in Photo Finish Live in a variety of ways
That’s it. All incentives are aligned. Win/win/win/win/win for everyone.
What is $CROWN
The official Third Time $CROWN explanation can be read here. It includes tokenomics, philosophy, purpose and projections.
In our words, $CROWN is the utility token used within the PFL ecosystem to claim a percentage of ownership on the racetracks being offered.
It is a fungible token that currently transacts on the Solana blockchain.
Owners of this token will stake (lock up) the token in-game for a defined period of time (3–4 weeks). Once the lock up period is complete, token owners will receive payments in proportion to their ownership of that track. If you are responsible for staking 5% of the total allocated amount on any racetrack, then you will secure 5% of all the fees earned by that racetrack.
Example:
There is no limit (well 250,000,000 — maximum token supply) how much can be staked on any individual track, so it is a purely free market for participants to determine where and how much they want to stake on any track.
If you stake 50,000 tokens on a track with 250,000 in total stake, you would secure 50,000 / 250,000 = 20% of the total fees generated on that track. This is identifiable where it says ‘Your Season Payout’ and this payout accumulates the fees throughout the season so you know exactly where your ROI stands.
So where does this yield come from?
Every race has a 20% race rake on entry fees and, currently (subject to change), 100% of those fees accumulate for the racing season (4 weeks) and are distributed into your account at the conclusion of each racing season.
The rake comes out of the winning purse, so only the winners are being ‘taxed.’ If a stable did not place in the money, you lost that money anyway.
Bit of a Robin Hood approach. Only the ‘rich’ have to pay.
So if a race track generated $1,000 in total fees and you owned 20% of the stake… yes it’s that simple… you just earned $200 for that season. And to clarify, every season in PFL is 4 weeks. So 52 weeks in a year, 4 weeks per season, 13 payouts per year. No gimmicks.
100% of the racing population is currently rewarded with $CROWN as a racing incentive (will discuss in greater detail later in the article), so the race rake goes back into the hands of racers every season for an influx of liquidity to continue racing and breeding.
Brilliant design, in the Commish’s opinion.
Just recently, the team announced that the ecosystem has plowed over $1,000,000+ USD into race entries ALREADY!
YES, that means that $CROWN stakers were distributed $200,000 already!
Not joking. This is real… AND most importantly… sustainable.
Why is it sustainable? Because the game delivers fun entertainment and it can attract non-crypto native people as the team has done before. Total addressable market is every horse racing fan around the world.
Why else is it sustainable? Because of the lore. We have Big Brain with 3 massive stables, we have rivalries and shit-talking, community led auctions, wagering on your favorite horse, multiple content creators, leaderboards to flex on, a resident race caller, we have all different types of races for the $5 degens all the way through dozens of horses being sold for $10,000+. There is a place for everyone and because of that, the game is sticky and people LOVE TO PLAY it.
They love to play it so much that the team reminded us that their retention rate is off the charts!
Tokenomics & Emissions
Total supply: 250M
Supply mechanics: Finite quantity, no inflation
2 Year emission schedule
For more in-depth details, David @ Horse Racing Capital has scribed a thorough overview of $CROWN tokenomics which has inspired the Commish to memorialize his own perspective on this topic.
If you do not want to read that article here are the emissions TLDR:
- 125M (50%) to holders of PFPs who stake them over 26 seasons
- 53M for the team with a 6 month cliff, 2 year vesting schedule
- 18M for early investors with a one year vesting schedule
- 55M to juice race purses at 4.2M per season for 13 seasons
Looking for Price History?
Real-Time On-Chain Decentralized Exchange Data
Can view the $CROWN/USDC token chart here: CoinMarketCap
How to acquire $CROWN
There are 4 legitimate ways to accumulate this token.
- Profile Picture (PFP) Staking
- Converting Crypto via an On-Chain Exchange
- Racing Gifts
- Buying Over-The-Counter (OTC)
PFP Staking
The original NFTs — Stylish Studs & Marvelous Mares (formerly Fine Fillies) possess the ability to stake and earn $CROWN.
Each PFP was assigned a unique amount of $CROWN to emit based upon the rarity of the traits in the PFP itself.
Any $CROWN that was/is not captured via staking is considered ‘lost’ and goes into a reserve pool. Stake and earn, or it goes into the TT kitty.
You can use this link to find the best deals on the PFPs. You will want to acquire the most $CROWN for every penny you spend so purchasing the lowest USD / $CROWN ask is the way. The column on the far right illustrates how much $CROWN is left to capture as of that moment in time.
Once you have your PFPs in possession and are staked, the $CROWN token earnings are generated every minute of every day.
PFP Staking will be live on the PFL main website in the near future as their staking partner, Cardinal Labs, has ceased operations. Stay tuned.
Converting Crypto via an On-Chain Exchange
At the time of this writing, the only way to acquire $CROWN on-chain is by utilizing a decentralized exchange (DEX). The one preferred by the community is the Jupiter Aggregator which sources all of the major DEXs for the best possible price.
You can swap USDC-SPL or SOL (and other SPL tokens) for $CROWN.
Pay attention to ‘on-chain slippage’ if you utilize this method. On-chain slippage refers to the phenomenon that occurs within a decentralized blockchain network, particularly in the context of DEXs or automated market makers (AMMs), when the execution price of a token swap deviates unfavorably from the expected price at the time the token swap is initiated.
This can happen due to the dynamic nature of cryptocurrency markets, where prices can change rapidly between the moment a trade is initiated and when it is actually executed on the blockchain. On-chain slippage can lead to receiving less favorable prices than anticipated. Low liquidity environments are usually the drivers of slippage. This is true for both buyers (price can go up) and sellers (price can go down).
Hopefully, by the time this article is reread in the future, there are more options to acquire, optimistically, via a centralized exchange like Coinbase.
Racing Gifts
You get paid $CROWN to play. How about that.
Every race has a $CROWN Gift attached to it and size of the gift is determined by the number of horses and entry fees for that race. This method of emission is to incentivize racers in the early stages of growth by rewarding them with $CROWN. This bootstraps the economy by offering, essentially partnership with TT, racers the ability to earn yield every time a race concludes, exactly how Third Time will earn an income.
Web3… where we are all on the same team. Remarkable.
Buying OTC
Occasionally, you will interact with racetrack owning moguls looking to offload $CROWN in bulk. Buying OTC may help you avoid on-chain slippage while an on-chain exchange will not be able to accomplish the same feat. This means that the price you are asked to pay per $CROWN token is the price you will actually pay to the seller. This is typically the only reason sellers engage in OTC deals, to juke slippage.
Pricing in this arena will be determined and agreed upon by both parties, buyers negotiating with motivated sellers will unlock the best prices.
Should you engage in this behavior, please be extremely alert as OTC deals are ripe for fraud.
Tricksters and gangsters will take advantage of anyone. Including you.
Which of the 4 methods gives you the best entry?
This is a fluid answer because the entry for $CROWN in any of the previously identified avenues could change instantaneously, so the response will likely be malleable depending on the circumstances.
Could an OTC deal for 80% below market value be the best entry? Yes.
What if Third Time increases $CROWN Gifts, could that be best? Yes.
What if the market experiences a crash, could that be best? Yes.
If everyone floored their PFP, could that be best? Yes.
So, there is no right answer, but without going through every single scenario which could arise, the Commish has determined that by utilizing a statistically significant data model, you can posit that PFP staking provides the best entry on average, the most flexibility and predictability on average as well as offering inflation protection against the PFP emission schedule. With that being said, the DEX option is not far behind, instant liquidity is undefeated as a perk, a benefit you do not possess with PFP staking.
Best entry on average (at time of writing):
PFPs: USD/$CROWN floor — $0.0331 USD
DEX: $CROWN/USDC pair — $0.0527 USD (59% premium to PFP)
Racing Gifts: Roughly $0.05 USD per $CROWN token (based on entry fee)
— But if you win the race, you got paid to earn $CROWN
OTC: Likely only a slim discount to EX price, depends on seller
Flexibility & Predictability:
PFPs: The allocation & price is fixed, PFP market is fairly liquid to exit
DEX: Slippage risk buying and exiting in bulk
Racing Gifts: Depends on # of horses in a race & at risk of TT controls
OTC: Not always available, fraud risk
Inflation Protection:
PFPs: Yes, seasonal rewards protect your proportion to PFP emissions
DEX: No, your purchase amount is locked regardless of emission schedule
Racing Gifts: As long as you continue racing, you will receive $CROWN
OTC: No, your OTC amount is locked regardless of emission schedule
Downsides of Each Option:
PFPs: Slow drip on emissions, opportunity cost of compounding vs yield
DEX: Slippage, low liquidity
Racing Gifts: Can only race so often, takes time to build a stack
OTC: Fraud risk, limited availability
Hypothetical example: $1,000 USD to acquire $CROWN
PFPs: $1,000 will get you about 30,000 $CROWN over 1.5 more years
DEX: $1,000 will get you about 18,000 $CROWN immediately
Racing Gifts: $1,000 will get you about 18,000 $CROWN over time
OTC: Depends on the offer
Not only does the PFP route offer strong $CROWN value, but it also comes with in-game benefits that will be in demand, especially if the racing population grows substantially.
Your time horizon is really the fundamental threshold of which option to utilize. If you want to get your feet wet, certainly try the DEX method, you can pop in and out of ownership without friction, but if you have a longer term outlook, then the PFP route becomes even more attractive.
Ranked (in terms of max value with least amount of capital and risk):
- PFP Staking
- DEX purchase
- Racing Gifts
- OTC
Now that you have $CROWN, How to stake it
This is the easy part.
When you log-in, click on Tracks and then ‘Go To Crown Staking’
Here is where you can determine how much $CROWN you would like to allocate across the various race tracks.
The goal is to optimize your ownership shares on the tracks that produce the most races and generate the highest amount of yield, not necessarily the most amount of fees. This is a relative exercise, not an absolute one.
There are an infinite amount of strategies one can ponder on how to obtain as much yield as possible. So let’s discuss a few…
Game Theory
This is the fun part!
Playing a game within the game: Maximize your ROI on racetrack staking
There are multiple ways to do this and it is impossible to discuss every avenue, but here are 2 of the baselines that we use:
- Beat the topline average yield — Total $CROWN staked / Total Fees earned will give you an average ROI per $CROWN token staked
- Beat the ROI of best yielding track — beating the strategy of putting all your eggs in 1 basket (racetrack), even if you picked the top ROI producing track correctly
The first goal should be to outperform the average.
Calculate the total economic impact for the season and compare against your results. If there is 50M crown staked and total fees were $1M USD (hypothetical fictitious example), topline yield would be 2% for that season or a 24% APY. However, that topline yield is the weighted average of all 5 tracks, so if you staked at a higher yield producing racetrack, you likely improved your odds of earning more fees than the average $CROWN stake.
Now, the average result is not calculated by putting 20% of your allocation on each of the 5 tracks, because the tracks are not producing equal returns! You have to weight the track’s performance, therefore, taking a topline baseline is the easiest method.
Maybe you try a 30/10/50/0/10 approach, or a 50/50/0/0/0 approach, or 20/20/20/20/20, there is no incorrect philosophy. Based on the season’s schedule, who do you believe will run the most races with the highest purses? The fun part here is… every season renders a new schedule, a new opportunity to correct the mistakes of before. Different tracks will ‘win’ every season.
Game theory in its purest form.
Another test is to try and out earn the best performing track.
The next one is comparing yourself against the efficiency of just selecting one racetrack to ‘bet’ on, the top yield producing racetrack. This one is trickier because the yield changes based on the number of tokens staked, so the Commish created a spreadsheet that illustrates both of these 2 baseline performances (vs avg and vs top track) and is sharing for the purposes of this article.
You are welcome.
Before we jump into the spreadsheet, keep in mind that the highest fee generating track is NOT NECESSARILY the highest ROI yielding track. It comes down how many hands are in that cookie jar (tokens staked). Victoria produced the least amount of absolute fees, but because there weren’t many stakers, those who did pick Victoria earned more per $CROWN than any other racetrack. 12% of all staked tokens against 16% of all earnings.
This spreadsheet highlights the very first season of staking, you can see the Commish did not allocate any tokens to Golden Empire, which was the 4th best yielding track at the deadline, but ended up being the worst performing track of the 5. A brilliant decision.
However, TTRaceway was the top producing track at the deadline and ended up finishing as the 4th best, the Commish’s largest allocation. Not such a brilliant decision. Thought the big races at TTR would generate the most fees, but this action ended up being incorrect.
Easiest way to calculate efficiency is looking at E/S Ratio, Earnings Penetrations to Stake Penetrations, greater than 1 is the goal, less than 1 is suboptimal. This is the #1 metric that determines ROI upside. Victoria finished with 1.27 E/S and therefore finished as the highest yielding track in the first season.
The Commish’s ROI finished at 85% of someone who placed all their bets on Victoria (just comparing yield (relative), not total fees earned (absolute)). That difference was 10,091 $DERBY missed. The Commish’s yield finished at 2% better than the average staker. Extrapolating that over 13 more season is a 26% improvement in APY over the average Joe/Jane.
Ultimately, a strong performance against the average PLF’er, but weak against the best track. Again, these are just 2 of the many ways to assess your skills.
Keep in mind, one can achieve 100%+ efficiency if you can beat the ROI of the best track. How is that possible? Well, hypothetically, if the top 2 tracks generate similar yields, if you dump all your tokens into one track, it actually reduces the ROI of that track, because there are more tokens staked. So there is absolutely a diversified allocation approach that can outperform a single track bet.
Lots of fun here. Important to hindsight your performance and learn lessons so you can properly minimize your risk and maximize your ROI going forward. ‘Adapt or die’ — The Commish.
My Opinion Only… Not Financial Advice… Do Your Own Research!
What sold the Commish on $CROWN (but more so PFL) was the economic model and the potential upside to be a part of something truly special.
Third Time has created three horse racing games now, totaling over 15M app store downloads… they have proven they can produce a fun game with longevity and staying power. As long as users are engaged, there is no limit to the upside this platform can offer.
All incentives are aligned… TT makes money from breeding and races running, racetrack owners want races running because breeders are breeding. So racetrack owning moguls should be promoting the game to the masses, ensuring that races always go off, its in everyone’s best interest.
In theory, you will never have to sell $CROWN ever… as long as races are running for the next 10–20+ years… why would you sell? Just sit back and collect rent checks. What other crypto token is generating USDC yield? This is mirroring IRL commerce, on the blockchain. If this game does not represent the ethos of web3, then no game ever will.
Here’s a bullish caveat… all the mechanics and examples above are based on a 4,000 horse population… if you are familiar with ‘the other horse racing game’, they just eclipsed 600,000 horses (this isn’t bullish for that game, FYI). The yield opportunities of the future are only limited by your imagination. So imagine the upside with a population who loves the game they play and with an ever expanding horse population. What happens when we hit $1M race fees in a single season? Racetrack owners will be very, very, very, very happy. Very happy.
Most people think (and even for simplicity) we mentioned it above, but higher yields is not just achievable as a result of more horses running, but is also a beneficiary from higher entry fee races. We don’t have the data, but first season average entry fee was probably in the $20 range… what happens if that goes 2.5x and becomes $50 and the race volume goes 10x? Zooma zoom zoom on your compounding APY.
Don’t forget about the Virtual Kentucky Derby (VKD) exposure… talk about upside on wagering, visibility, users, etc. The Commish envisions a world where the PFL VKD is the co main event for the Kentucky Derby, and now every kid/parent/degenerate wants their own stable.
Owning part of a racetrack, even with just a few $CROWN tokens to get your feet wet, is the easiest way to onboard newcomers in the Commish’s opinion. Once you are in the ecosystem, it’s then less daunting and overwhelming to learn how the racing ecosystem works.
It’s too easy, the risk is minimal, the game is fun. Not sure why anyone in crypto/web3 space wouldn’t want some exposure to this game as it checks almost every single box. Where else can you collect USDC yield in crypto?
Wishing you success on your $CROWN journey.
Thanks for reading, hope it was helpful. Have questions? Fire away…
-The Commish
