Investing in Digital Racehorses with ZED RUN

This issue is coupled with a new podcast episode. Last week I had the pleasure of sitting down with Travis Winn from ZED RUN, the blockchain-based game where you own and race digital racehorses to earn real money. We had an awesome chat.

It was pretty tough to get this interview. The Zed Run team is still relatively small, extremely busy, and are suddenly getting bombarded with interview requests — many of which they have to decline for lack of time. So this was very special for me.

I love how this episode turned out. In fact, I think it’s my favorite podcast episode that we’ve ever done. Check it out on iTunes and Spotify.

What is Zed Run?

Zed Run is a new blockchain-based game that lets you own and race digital racehorses.

That’s right, you buy them, breed them, raise them, sell them, and of course race them. All transactions are in Ethereum, and all money earned is real. Each horse has its own unique characteristics, ancestry and stats passed on through blockchain-based genetics. It’s pretty mind-blowing stuff.

If you’ve been following Alternative Assets over the past few months, you may have seen me rave about this. Zed Run’s popularity has recently skyrocketed thanks to a killer community of rabid fans and some huge recent press in the NY Times. We’ve been talking about Zed Run well before it was cool. We first mentioned them as a company to watch back in February, and then highlighted them again last month in our issue on investing in racehorses (physical ones).

But there is nothing physical about this world. Everything about Zed Run is virtual. The horses you buy, the studs you breed, the races you watch. Everything that is, except the money. That’s real.

While still in its infancy, I believe Zed is one of the single most interesting investment opportunities available right now. It’s the intersection of three big trends: NFTs, video games, and gambling. Each of these three trends has huge tailwinds, so when you combine them all together, it makes for something truly special.

Otherworldly design

The first time I saw Zed Run, it absolutely blew my mind. To me, it was like looking through a telescope into another world. I would describe it as Tamagotchi Pets meets Robinhood meets TRON.

Zed Run is like Tamagotchi Pets meets Robinhood meets TRON. Hats off to the designers.

It turns out this is pretty much the look & feel the team was going for. Chris Ebling is the creative force behind the game. Chris is an animator with a background in VR/AR and creative direction, including Hollywood blockbusters such as The LEGO Movie, and fellow Aussie Baz Luhrmann’s The Great Gatsby (which has amazing art direction and won an Oscar for Best Production Design).

With Zed Run, the intention is to create the digital sport of the future; one that takes place in an alternate dimension, on a planet called Novus Earth. The goal is to transport players into a future where digital horse racing has become the biggest sport in the world, and “the beating heart behind everything you do.”

Who owns Zed Run?

Zed Run was founded in Australia in 2019 by Chris Laurent, founder & CEO.

Like many Aussies, Chris was big into horse racing. Let me tell you, Australians are obsessed with horse racing. It’s a big part of the culture here, and the Melbourne Cup offers the 2nd highest purse in the world.

As the story goes, Chris looked at the horse racing events that everyone loves, but realized the accessibility is actually quite low. Through centuries, ownership of a prize racehorse was a privilege for the super-wealthy. So many people love the sport, but only a select few have any sort of ownership in the game.

Now, to be fair, horse racing has been somewhat democratized in recent years. We now have racehorse syndicates, and even fractional racehorse marketplaces like MyRaceHorse, MyHorseDealer, and Commonwealth.

Still, the general lack of accessibility with horse race culture got him thinking: How could this experience be liberated so everyone can feel the victory of having a winning horse? This led to the idea of digital horse ownership and using NFTs and the blockchain as a means of decentralization.

From there, the early team blasted out of the gate, ran with the idea, and essentially willed Zed Run into existence.

Zed Run recently partnered with InBev to create new Stella Artois-inspired horses and tracks. Beer + digital horses: What a killer combo.

Financial and legal considerations

It’s easy to forget that Zed Run is just two years old, and was one of the first companies to successfully adopt the use of NFTs.

In terms of getting off the ground, the team at Virtually Human Studios (Zed’s official parent company) raised a small seed round from early believers. This got the team up & running and gave them the early momentum they needed.

But what about the legal side of things? Despite the explosion of sports betting, some have questioned the legality of Zed Run, claiming it may break interstate gambling laws. Zed Run has made it clear they do not want to be a gambling platform. The team has made it clear that Zed Run is a game of strategy and skill, where users have autonomy and control over their performance and potential outcomes.

It’s quite difficult to keep track of legal requirements across different jurisdictions, as it adds another thick layer of decision-making to their roadmap. But by approaching legal issues with a game-first mindset, they can maintain integrity of the product and not let legal issues hamper development. This makes things more difficult sometimes. But it’s the right thing to do.

A hugely engaged community

You cannot understand what Zed Run is all about without understanding the community. Community is tremendously important to Zed Run. It’s nothing less than the single most important pillar of what they do.

In addition to sizeable Twitter and Instagram accounts, the Zed Run Discord is at over 58,000 members as of this writing, and (by my estimates) growing by close to 10k new members each month. The Discord Channel contains everything you’d expect: rabid fans discussing strategies, asking questions, giving advice, giving product ideas, sharing pics of their horses, live streaming races, showing off a bit, and mainly trying to learn, teach, and help each other navigate this new world.

But what’s most fascinating to me about the Zed Run community are the heaps (<– Aussie word!) of sub-communities that have sprouted up. It’s incredible: There are now entire websites, newsletters, and datasets completely dedicated to Zed Run. These are all completely organic, unofficial, and not funded by the company (though they are almost always encouraged and supported).

How large has this community become?

Here are some examples:

  • The Zed Gazette is one of the first community-led Zed Run news sites delivering free info and tips without a paywall.
  • Award Racing is dedicated to helping beginners find their feet
  • Poseidon Racing is a website and video channel packed with live streaming content led by a Stable Owner called Poseidon Racing
  • KnowYourHorses Analyzes race performance and bloodlines (we’ll get to that later)
  • Pony Plug is a Twitch for Zed Run news, races, and banter (Zed Run of course has their own Twitch. Pony Plug is just the most popular spinoff.)
  • r/zedrun on Reddit. Obviously.
  • Zed Run Insights provides a leaderboard with data
  • Sigma Stables does the same thing, collecting data every hour
  • Uses Power BI to organize and make sense of massive Zed Run data sets
  • has more data & analytics

…And on and on we go. There are at least a few dozen more.

It’s all just getting started.

KnowYourHorses has in-depth detail on thousands of horses, including ancestry and profitability over time. It also links to recordings of recent races.

Zed Run’s sudden media attention

Today, when you search for “Zed Run”, you get hundreds of articles from well-known mainstream publications. But this only started happening very recently.

While the company has been around for roughly two years, it took a long time to get noticed by mainstream media. I follow tech news (and especially Australian tech news) very closely. Up until last month’s NY Times article, Zed Run had essentially zero coverage from any major publication in Australia or anywhere else. It was staggering.

For some reason, there was a massive disconnect between how active, loud, and positive the Zed Run community is, and how ignored it was by the mainstream media.

But why?

Demystifying NFTs

The reason for this could be because, when it came to Zed Run, the media simply didn’t know where to begin.

It’s easy to forget that even three months ago, NFTs were still relatively underground. They weren’t mainstream at all. Celebrities weren’t talking about them, and the media didn’t seem to know (or frankly, seem to care) what they were.

Back then, if someone uttered the phrase, “NFT digital horse racing using Ethereum on the blockchain”, you’d probably think “What in god’s name are you talking about?”

This all changed when NFT sports cards blew up, thanks to NBA Top Shot. (Proud to say that we were early to that trend too!) The fact that the NBA was backing this movement gave it credibility. It attracted celebrities & media coverage, and paved the way for much of the narrative we see today.

But NFTs are still confusing and overwhelming to lots of people, and one thing I love about Zed Run is how much effort they put into simplifying this world. Going through their site, it’s immediately noticeable how accessible they make everything. It’s easy to use. They don’t want to be a platform for early adopter “crypto gods”, they want n00bs, later adopters, and anyone to be able to play the game and have fun.

Yes, it’s all built on top of the blockchain, but much of the noise and confusion has been abstracted away. They understand that while blockchain is at the forefront, it’s not the celebrity. The game itself is the celebrity.

I think this focus on usability is a big part of their success. In fact, I honestly think Zed Run would eventually be just as successful even if NFTs had nothing to do with the game mechanics.

Speaking of the mechanics, it’s time to talk about how it all works.

How Zed Run’s algorithm works

The amount of thought that went into the game structure is pretty incredible.

Each horse has a prowess, which is determined by a few factors; the bloodline, and the genotype. The rarer the horse’s pedigree, the faster the horse — and the more expensive it will be to purchase.


There are four bloodlines, each with a different level of scarcity. The first generation of horses that were released is known as the Genesis breed. Only 38,000 of these horses will ever be put into circulation, and the company has already released about half of them.

Genesis horses are basically the original horses introduced into the game. You cannot create more Genesis horses by breeding them. They are the most scarce horses in the game.

Selling horses to the market — particularly these ultra-valuable Genesis horses — is the primary way the company earns revenue. (You can do the math and figure out how much this company has sitting on the books as digital assets.)


Each individual horse has a genotype, which is like a serial number on an NFT trading card. It’s a way to make the horse unique. The closer that serial number is to “1”, the more pure and valuable the horse. When two horses breed, the genotype numbers are simply added up, and the resulting offspring’s genotype is the sum of the two numbers.

So for example, if a 10 breeds with a 27, their offspring would have a genotype of 37. If that offspring later breeds with a 33, their offspring would have a genotype of 70. And so forth.

Ancestry plays a huge role in this game and the best stable owners are able to strategically breed their horses together to create the fastest racers.

The Nakamoto horses are the most valuable thoroughbreds in the game (and no, the name is not coincidental). The company has established tight boundaries around breeding economics to maintain a healthy supply & demand.

The racing algorithm

One of the biggest questions on everyone’s mind is around the racing algorithm. How does it work? What does it favor? And how much control does Zed Run have in determining winners?

First, Zed Run does not have direct control over who wins each race. The way it has been architected is quite fascinating.

Before each race begins, the company runs a few thousand simulations of the race. These simulations are based on the mathematics baked into the algorithm, including variables such as bloodline, genotype, track distance, speed, stamina, and more.

The algorithm takes all of these likely case scenarios, then randomly chooses one of the race simulations to use as the actual race. Of all the possible outcomes, it chooses one at random. This means that while the algorithm favors performance, it doesn’t reinforce itself through repeat bias.

Fostering serendipity

By choosing a winner in this fashion, the algorithm biases towards serendipity.

This is smart, and it’s exactly what you want to see. Because this is how real life works. The fastest and best horses don’t always win the race in real life, so why should Zed Run be any different? You’ve got some horses that clearly have better odds than others, but the whole fun of horse racing is that you never really know what’s going to happen! (In fact, the winner of this year’s Kentucky Derby was Medina Spirit, who was originally purchased for just $1,000.)

Sure, if you own a more expensive horse with a better genotype, you definitely have a better chance of winning. But that doesn’t mean a weaker horse won’t have a chance at becoming a champion. And that’s what horse racing is all about. Underdog victories are what make the sport so much fun.

This architectural decision was no accident. In the early days, the company hired a real-world horse racing expert to help them re-imagine how real-world racehorses could perform mathematically. The company figured if they could introduce and quantify the correct amount of randomization, they could essentially replicate the real-world dynamics within the game.

– – –

(Side note: This gets me thinking about how these same serendipity dynamics could be applied to our social networks. We know that Twitter, Facebook, and other social networks are creating filter bubbles for all of us. What I see in my feed is very different from what my grandma sees, etc. Don’t get me wrong: Tailoring towards interests is definitely a good thing. Heck, we do it all the time here at Alternative Assets! But many feel that it has gone too far, and it’s going against our better nature. Perhaps we could all use a little less predictability in our lives, and a little more serendipity..)

– – –

How do you invest in a Zed Run horse?

Buying horses via drops

The biggest surprise many people have when going to Zed Run is that you can’t just buy new horses any time you want.

Like many NFTs, the company only releases new horses during drops. Announced on their Discord and Twitter, Drops are coordinated events where specific batches of horses are released at specific times. And you’ll need to pay attention, because drops sell out fast.

Before a drop occurs, you’ll need to do a little preparation. Leave yourself plenty of time by keeping your eye on your watch, then follow these step-by-step instructions.

Remember, Zed has only released about half of the Genesis horses so far, so it’s not too late to get started. The last drop, called the ECHO DROP, was on June 10th. The company has been implementing measures to prevent hoarding, and to make the buying of horses more fair and equitable for everyone.

They make sure not to restrict supply too heavily during drops, as they want to give newcomers a fair shot at owning premium horses. But at the same time, they also have to be careful not to suddenly flood the market with new supply, because it will piss off the older, most loyal stable owners, whose aggregate value would be drastically reduced.

It’s a delicate balance, and one they have been taking seriously. As fantastic as it would be for their bottom line to flood the market with new horses, it’s in their best interest to create longevity in the ecosystem.

Someday in the future, Zed Run drops will finally get as much press coverage as Apple events

Buying horses through secondary markets

If you don’t get a horse during a drop, that’s okay. You can still buy them on secondary markets such as Opensea.

Buying a horse on a trusted, transparent market like Opensea brings reduces the risk of getting scammed to near zero. You may pay a premium compared to the drop. “Horse flipping” is very real and quite lucrative for savvy sellers. At the same time, you may also be able to find a good deal on a horse that is undervalued.

If you’re interested in learning more, engage with the community on the site or through Discord. Don’t be shy: Ask questions if you don’t know something. The community is friendly and happy to help out.

New horses are only released during drops. But you can purchase horses on secondary markets. 33% of all horses in the game are not from the company, but bred from players

The future of Zed Run

There are so many different directions this company can go. One of the most interesting areas to explore is the sub-economy.

There is some really fascinating stuff that has sprouted out of the Zed Run ecosystem. In addition to a huge community, you now have a burgeoning sub-economy, including massive stable owners, stable conglomerates, Zed Run trainers and Zed Run consultants.

But Zed Run doesn’t want to get too involved in these sub-economies, because they are all community-driven. If they offered these services themselves, they would essentially be taking market share away from their biggest fans. It’s much wiser to take a step back, empower them, and let these movements evolve on their own.

However, there is one area where it may make sense to get more directly involved, and that’s with opportunities in the metaverse. As we’ve written about recently, the concept of virtual land ownership & development is starting to go mainstream.

Take the upcoming blockchain game Ember Sword, for example. All of the land inside the game will be fully owned by the players. Each player can buy a plot of land inside the game, and has complete freedom to decide what to put on there. Landowners can earn money when players use the land — perhaps taking a fee from a shop, or earning future sales of items left on the land, etc.

Think about what this concept could mean for Zed Run. You could have virtual landlords who own not just horses and stables, but entire race tracks. Players could design, build, and own their own tracks, and sell them to other players. They could even charge horse owners to race on them! Tracks could have different properties, weather conditions, and other quirks which makes them more attractive to different types of horses.

It’s fascinating to think about.


Ask ten people what the term “digital assets” means, and you’ll likely get ten different answers.

To some people digital assets means websites. To others it means digital real estate in the metaverse. And to others it means CryptoKitties, Bored Apes, or NBA Top Shots.

But to me, Zed Run stands out in the field of digital investment opportunities. And the reason is that it’s one of the few active investments where your efforts affect the yield.

The problem with NBA Top Shot is that you can’t actually do anything with a Top Shot moment, besides buy and sell them. Sure, they look cool, but right now they are just a collectible like any other physical trading card. (And let’s be honest, lots of the NFT world is based on greater fool theory. Not all of it, of course. But much of it.)

But not this. With Zed Run, you can learn the ropes, study the data, and give yourself an edge. You can earn a real return not just from racing your horses, but from breeding them. Breeders set their own prices, and can (and often do!) collaborate with other players to breed high-value horses together, splitting the profits. And that’s to say nothing of what the future holds.

The company maintains that Zed Run is, first and foremost, a game. But it’s a game with valuable digital assets. Like any other active investment, the return you get is based on the effort you put in.

Whether you treat Zed Run as a game, or as a serious, yield-generating NFT investment is up to you.

Just be sure to learn the rules, invest wisely, and most importantly, have fun.

What a time to be alive. ???? ???? ????



Stefan von Imhof

Stefan von Imhof

Stefan von Imhof is the co-founder and CEO of  With a background in alternative asset analysis, valuations, and due diligence, Stefan was born for this world. His alternative investing  newsletter has grown into — the world's largest alt investing community, with over 120,000 investors. Originally from Boston and later Santa Barbara, CA, he now lives in Melbourne, Australia with his beautiful wife.

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