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VeradiVerdict - Issue #267
I wanted to highlight Sorare which is bringing NFTs to a larger audience through sports, gaming, and collectibles by further abstracting away crypto and strengthening fanatic communities.
Sorare is a web3 fantasy sports game with 5 million users across 180 countries, and has formed partnerships with major sports leagues like the Premier League, NBA and MLB.
Players collect NFT player cards representing real sports stars, build teams, and earn rewards based on real-life player performance. These cards have different rarities and are traded on Sorare's marketplace.
The game's unique scoring system ties card values to real-life player performance, encouraging fans to engage with actual sports events.
Sorare's success lies in its collectible-first approach, and its future lies in abstracting away the blockchain tech to onboard non-crypto users.
Sorare is one of the most established web3 fantasy sports games, combining the familiar fantasy sports genre with blockchain technology to create a pioneering experience that allows players to realise their dreams of owning and managing their own sports team. In addition to its flagship fantasy football game, Sorare expanded in 2022 to launch games for basketball, through an NBA and NBPA partnership, and baseball, through an MLB and MLBPI partnership.
Within the Sorare game, there are three main components: collecting digital players cards, building team lineups, and competing in tournaments for rewards based on your team’s real-life performance. In this article, we will explore how Sorare leverages the web3 tech stack to create and implement this in-game experience, focusing in particular on its flagship football game. We will then use this case study to discuss Sorare’s significance and the future of fantasy sports and other forms of gameplay on-chain.
Collecting NFT Player Cards
One of the main parts of the Sorare is the ability to collect digital player cards to build up your own card collection and “fantasy teams” as a club “manager”. On Sorare, a real player in a sports league (such as Lionel Messi from the 2022-2023 season) is represented through these digital player cards.
Image Source: Sorare 2023 Media Kit
In addition to a free-to-play “Common” tier meant to get new players used to game mechanics, there are 4 different rarity levels for these digital player cards: Limited (yellow, 1000 cards per player per season), Rare (red, 100 cards), Super Rare (blue, 10 cards) and Unique (black, 1 card). In crypto jargon, the above Unique card is a 1/1 NFT of Lionel Messi stored on Ethereum.
In addition to being more valuable due to the scarcity of the card, the rarity of a player’s lineup will directly affect which game division the player is eligible to play in. The “Rare Pro” division, for example, requires the player to play with either Rare or Super Rare cards.
All of these cards are available for purchase on the Sorare marketplace, through which the player can buy, sell, and trade cards using either Ethereum or fiat currencies. Just like in traditional trading card games, where players can either buy first-hand or second-hand cards, Sorare also makes a distinction between “brand new auctions,” in which new player cards are auctioned over approximately a 24 hour period, as well as “manager sales,” in which players can buy second-hand cards.
Sorare On-Chain Transfers and Minting. Source: Dune Analytics as of September 12, 2023.
From on-chain data, Sorare seems to have a vibrant secondary market, where NFT transfers consistently outpace new NFT mints. To-date, Sorare has more than 330k NFT mints, as well as a mean and median user transfer rate of 48.8 and 12. All of this suggests that Sorare has successfully tapped into the trading card community’s culture of trading second-hand cards within the sports community – something all the more impressive given that general NFT trades have seen dramatic declines to hit a two-year weekend-volume low.
Competition and Gameplay
Perhaps one of the key reasons why Sorare’s player cards retain traction despite the overall NFT market downturn is because Sorare has built a sophisticated gameplay and rewards system around these player NFTs.
After collecting their player cards, managers can assemble lineups consisting of 5 players- one goalkeeper, one defender, one midfielder, one forward, and one extra player, or ‘flex,’ which can be any player except goalkeepers.
These can then be used to compete in various competitions or “tournament leagues”. Each of these tournament leagues are inspired by real-life leagues, and have their own qualification requirements for the player’s collection.
For example, the “Champion Europe” league accepts only players from the top 5 leagues: the Premier League, La Liga, Serie A, Bundesliga & Ligue 1. As mentioned above, each of these tournaments are further divided into different rarity divisions, where each division has different rules on the card rarity that can be filled. There are also several special tournament leagues that have other requirements, such as the U23 tournament, which only accepts players whose real life age is under 23. After the player has assembled their team that “qualifies” for a particular tournament league, the player can then enter the competition, alongside other players and their teams.
Sorare makes its key gameplay innovation at this point, where the behavior and actions of the players in real-life matches are reflected in a scoring algorithm, to give each of the user’s cards a “score”. The score calculation is based on several factors, including the player’s role (eg. forward) and 48 unique stats (eg. interceptions, key passes, goals). Players are also awarded a bonus score according to the card’s rarity. At the end of each game week, users’ scores are then aggregated, and the players that have the highest scores are rewarded with trading cards, ETH or cash rewards - and there’s even a chance at winning match tickets, VIP fan experiences and signed kits from the real-life football stars for the top performing managers.
Lionel Messi’s player profile and score: https://sorare.com/football/players/lionel-andres-messi-cuccittini/
Sorare’s essentially live scoring system means that the value of the user’s player cards are constantly changing, and both the player’s 5 most recent scores and the 15 most recent scores will be listed on the player’s page, attached to the card. For example, as of Sep 12, 2023, Lionel Messi has an average score of 80 for his last 15 games, as displayed above.
Sorare’s Significance and its Implications
As mentioned above, one of Sorare’s key gameplay innovations is its implementation of a scoring algorithm that translates the real-life gameplay actions of sports stars into a real-time “score” for its fantasy sport trading cards. This constantly-changing score is unlike traditional, analog trading card games where the abilities and scores of the players are physically etched onto paper, and therefore remain the same.
Therefore, the value of players is constantly changing. Thus, through having these player trading cards in a digital format as an NFT, this allows the trading cards to be tied in more closely with the actual game itself, thereby creating a new way of connecting players with fans.
Unlike traditional, console fantasy games, such as EA’s FIFA, in which the real-life game is “replaced” with a copycat virtual game, Sorare’s NFT trading card format incentivizes fans to pay attention to the actual physical game itself, since the user’s cards and in-game net worth is directly correlated with the real-life matches taking place. This in-game utility of Sorare’s cards could be a reason why Sorare has managed to successfully partner with a large range of major sports leagues, from the NBA to the Premier League to the MLB, and thus forming a formidable licensing “moat.”
Moreover, although Sorare has a rewards system, the project’s real value proposition is as a novel form of a collectible and trading card game – a form that is far more sustainable, both regulatorily and financially, than traditional play-to-earn models. After all, even if users do not at all engage in the competition gameplay to earn rewards, the trading card NFTs themselves still have value, something well attested to by the large market for secondary sales discussed above.
With Sorare’s recent Sept 5 announcement of its launch of AR-equipped 3D football trading cards and global scavenger hunt, it seems as if Sorare is leaning towards this collectible-first approach, working on enhancing the collectible experience for its users, rather than emphasizing how much users can “earn” with the competition game.
One of the advantages of this collectible-first approach is that it is far easier and intuitive to understand for a non-crypto audience that is familiar with sports trading cards, but unfamiliar with NFTs. Just like many other consumer-facing crypto applications, one of the biggest challenges for Sorare is in expanding beyond a crypto-native base. Despite Sorare boasting a user base of 5 million across 180 countries as of September 2023, over 40 million play fantasy football worldwide. To this end, Sorare has recently been taking several actions to abstract away the crypto knowledge necessary to play the game, including allowing users to use fiat (instead of Ether) to buy the trading card NFTs, as well as the introduction of fiat cashout options through a “Cash Wallet”. These are both important and commendable steps in reducing the barrier of entry to the application.
Overall, Sorare’s journey as a product is a pioneering experiment and arguably a landmark project for consumer-facing crypto applications. It greatly showcases the power of using NFTs to build highly dynamic and interactive digital collectibles that have real world utility, ultimately paving the way for a novel era of tokenized collectible and gameplay experience.
- Paul Veradittakit
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Hi, I’m Paul Veradittakit, a Managing Partner at Pantera Capital, one of the oldest and largest institutional investors focused on investing in blockchain companies and cryptocurrencies. I’ve been in the industry since 2014, and the firm invests in equity, early stage token projects, and liquid cryptocurrencies on exchanges. I focus on early-stage investments and share my thoughts on what’s going on in the industry in this weekly newsletter.
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