ZED Run: Why the Focus on Price?

Rainier Racing Co.
Published in
7 min readMar 18, 2022


Introduction: Price as Risk

A common question that I get in relation to the pricing and valuation material that I publish is some form of “Why so much research just to figure out a price? Isn’t a horse worth what someone is willing to pay? Besides, is a difference of 0.05–0.10 ETH really going to affect my returns?” The answer is that while the model of “value” is equal to “what someone is willing to pay” is easy to understand, it is not a sophisticated enough answer when looking at buying an asset that can return capital (i.e. your money) to you in the form of both cash flows and price appreciation.

Given that ZED Run is an inherently risky game based on probabilities and a mysterious algorithm that we are all trying to crack, you need to be careful in the selection of your digital thoroughbreds, paying particularly close attention to the horse’s ability to provide you a return of capital. The price you pay for a horse, then, becomes the primary means of mitigating the risk of losing a large portion of or all your investment. We cannot control the random throws of the dice when it comes to race performance or how well a horse’s offspring turnout, however, the one thing we can control is price.

Over the next several articles we will look at some common missteps I have seen in the market when it comes to prices paid. I will dissect these errors and show why not paying attention to price could be seriously undermining your stable’s profitability.

If you missed my first article on how to value a horse, I recommend reading that first here.

For those that have been initiated, let’s dive into it!

Error 1: Same Bloodline & Breed = Same Price

One of the most common pricing trends we see in ZED Run is that people are willing to pay the same price for the same bloodline and breed of horse, regardless of its stats. You will hear chatter in the Discord channels about the various “floor” prices broken out by bloodline and breed, the implication being that these horses are worth some minimum value regardless of their ability to make money. This is a serious error, and the most harmful to impacting your returns. Subtle differences in Win/Place/Show percentages can have a dramatic effect on your ability to generate returns.

Let’s assume that you have a set of Z2 Nakamoto Legendary horses that you are considering buying, each one listed at the hypothetical average price of $1,000 (~0.4 ETH) with the following stats:

Average, Median, 75th Percentile, and 45th Percentile Nakamoto Stats (Rounded)

Average Joe has the average stats for this line of horses; Coin Flip has median stats (i.e. flip a coin and a horse will have better or worse stats than this); Better Than Most is in the 80th Percentile of performance; and Worse Than Most is in the 45th Percentile.

Knowing that we only get money when we place 1–3, we need to determine how often we expect to finish in these three positions, as well as how often we will lose, then multiply by the payout for each of these finishes; currently 6x entry fee for 1st, 3x for 2nd, and 2x for 3rd, and nothing for any other position.

To do this, we simply subtract Place % from Show % to get our chances of finishing 3rd; Win % from Place % to get the chances of finishing 2nd; and our chances of finishing 1st are equal to our Win %. Subtracting our Show % from 100% gives us our percent chance of losing.

Show — Place = 3rd %; Place — Win = 2nd %; Win = 1st %; 1 — Show = Lose %

Now, for simplicity’s sake, if we assume a $1.00 entry fee, we know what we will get $6.00 for every 1st, $3.00 for every 2nd, $2.00 for every 3rd, and lose our entry fee for every position below third. Multiplying these payouts by their expected probabilities yields the following expected payouts per race:

Ex: $6 x 10% = $0.6; $3 x 10% = $0.3; $2 x 10% = $0.2; ($1) x 70% = ($0.7)

In the table above we see that each of these horses is projected to provide a return over the long run due to their positive payouts, however, notice the drastic differences in payouts. The there is only a few percentage points difference in each horses’ statistics, but those slight differences lead to huge differences in expected payouts.

Factoring in the cost of the horse at $1,000, plus entry fees required to run the races, we get the following table to determine yield and number of races required to recoup our investment:

Assuming we can run about 10 races per day due to fatigue, we can see the huge difference in time required to get our money back between these . With a $1,000 purchase price, on average, it will take us 250 days (~8 months) to get our initial investment back from the average Z2 Nakamoto Legendary. However, if we are lazy in our evaluation of the horse, it could take us as long as 417 days (67% longer than average) to get our money back out. On the other hand, if we take our time and conduct thorough due diligence on our perspective purchases, we could end up with a better than average horse that will return our investment in half the time compared to the average (40% faster in the example above).

Concluding Thoughts

The example above ought to be enough to make you pause and seriously consider the price points you are willing to pay for any given horse. It is imperative that you really dive into a horse’s statistics and evaluate whether there is a reasonable expectation that you can get your money back out.

To really hammer home how prices are the number one way to control the risk of losing your investment, see the following table that shows the prices you could pay for each horse and still expect to achieve the average numbers of days to recoup your investment:

Price is the #1 way to control for performance risk!

By simply bidding less on Coin Flip and Worse Than Most you could still achieve a monthly yield of just under 10% and get your money out of the horse in the same amount of time as the average horse. Conversely, you could pay up to 67% more for Better Than Most and still achieve a 10% monthly yield and get your money out in 8 months.

Now, for those familiar with ZED Run, we know that this analysis is just the tip of the iceberg when it comes to evaluating how much to pay for a horse. Each horse may have a specific distance or track surface that it prefers where it will outperform its overall statistics. I recommend really diving into a horse’s racing history and evaluating the statistics on a per distance and per “racing funnel” basis by class to figure out how you can achieve the highest return on your investment.

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If you have questions on how to value a horse or are interested in us doing an analysis for you, please contact us at RainierRacingCo@gmail.com and we will get back to you within 24 hours.

Pricing & Valuation Resources

Rainier Racing Co. — Check us out to get market data and read our ZED Run Market Reports.

Hawku — Use to find new listings, screen for similar transactions, and review racing statistics.

Know Your HorsesTHE place to do a deep dive on your horses and other stable owners.

Zed Ranks — Great place to get a rough estimate of a horse’s value.

StackedNaks — See your horses statistics ranked against other in the game.

ZED Run — The game!

Join Coinmonks Telegram Channel and Youtube Channel learn about crypto trading and investing

Also, Read



Rainier Racing Co.

Passionate about using my background in risk management & Tech Banking to help fellow Zed Stable Owners have confidence in the prices they pay for their horses.