Thread by @mbl267_NFT, Extremely +EV Packs Are The Reason Your Top Shot Account Value is [...]

Extremely +EV Packs Are The Reason Your Top Shot Account Value is

Are extremely +EV packs fun? Sure
Are they partially responsible for the explosive growth of Top Shot? Probably
Are they extremely damaging to the ecosystem and the marketplace? Absolutely

Here's why:

(1/25)

- Rent seekers outnumber collectors and the gap will likely grow
- Rent seekers *only* play pack lotto, then instantly sell (add supply & no demand to market – guess what happens to prices)
- The majority of accounts are basically a glorified "rake" on true collectors

(2/25)

- Even true collectors should logically never buy from the market when you can play pack lotto

is the TL;DR

Keep going for more detail

(3/25)

Based on some simple & probably flawed math, I have estimated that ~57% of accounts are what I will be calling “rent seekers” throughout this

. The 1st picture is how I arrive at 57% (which I think is conservative) & the 2nd picture is a definition of “rent seeker.”

(4/25)

Based on some simple & probably flawed math, I have estimated that ~57% of accounts are what I will be calling “rent seekers” throughout this . The 1st picture is how I arrive at 57% (which I think is conservative) & the 2nd picture is a definition of “rent seeker.” (4/25)

For the avoidance of doubt, when I say rent seeker, I mean the people who are *exclusively* here to play pack lotto and immediately sell moments. Yes, I understand that there are exceptions and people who do not fit neatly into one category or the other.

(5/25)

57%, got it…so what? They might be annoying, but how are they hurting the market and my http://evaluate.market account value?

Now the fun really starts:

(6/25)

evaluate.market

Analyze Top Shot and digital collectibles

http://evaluate.market

- Extremely +EV (Expected Value) packs incentivize rent seekers to join the platform
- The “Top Shot” part of Top Shot is incidental to them
- They like and are here for the free

(7/25)

- There will always be more people who like free money than who like Top Shot, so, under the current system, rent seeker growth will probably exceed collector growth, exacerbating our issue

(8/25)

- Rent seekers *exclusively* play pack lotto (which is completely free to play and guaranteed profit if you win…why wouldn’t they?)
- I believe that almost every multi accounter is a rent seeker

(9/25)

- Rent seekers add supply to the market (they don't keep any moments, they just sell)
- Rent seekers add 0 demand to market (they will not buy something that is sold at fair market value)
- When we increase supply & we decrease demand, what do we do to prices / values?

(10/25)

- Easy way to think of it: rent seekers are essentially a rake (poker term) on the entire Top Shot ecosystem. They are guaranteed to be profitable
- Where do their profits come from?

Answer: Dapper (underpricing packs) and you (buying from them in the market)

(11/25)

- Extremely +EV packs alters the “true collector” experience too

Which of the following is more fun / attractive:

(12/25)

Option 1: Buy $100 of moments from the market at FMV and have $100 of moments
Option 2: Take $100, play pack lotto and insta 5x (with no risk if you miss the packs). If you want, sell every moment from the pack and buy the $100 (cont...)

(13/25)

...of moments you wanted originally. Or just keep playing pack lotto because it is extremely fun to 5x your money. Probably even more fun than collecting moments.

(14/25)

- There is no incentive to be buying from the market right now…why would you pay FMV when you can play pack lotto?
- Most (>50%) accounts don't care about TS and are just extracting money from the system. They are on the platform for one reason –> extremely +EV packs

(15/25)

Solutions:
- Take away the incentive and the above dynamics go away
- We NEED Dapper to close the gap between pack prices and pack EV
- Until they do, rent seekers will dominate the ecosystem and drive the market (and the experience) into the ground

(16/25)

- If we #narrowthegap, rent seekers will walk out the front door and go find another platform to extract money from
- I don’t care that other markets (sneakers, concert tickets, sports cards) have similar dynamics – we can do better

(17/25)

Four Ways to #narrowthegap:
1. Increase pack prices

I understand this may price some people out of legendaries & may not be the best option
2. Reduce # of moments per pack

Did we really need three MGLE in the holo packs? The holos alone made packs extremely +EV

(18/25)

3. Increase edition sizes

Go bigger with edition sizes (make new moments less valuable)
4. Increase number of players in sets

Reduce new moment values, which shouldn't (I don't think?) hurt your existing moment values

Reply with other ideas

(19/25)

What about more restrictions around pack drops?
- I don’t think this approach is sustainable, although it's a good way to limit multi accounters in the short-term
- Rent seekers will meet minimum qualifications to participate as long as the incentives are there

(20/25)

Benefits of #narrowthegap:
1. Rent seekers and multi accounters have no incentive to participate and will leave the platform organically

(21/25)

2. More true collectors will be able to enjoy the pack experience. 57% of packs are currently going to rent seekers – those packs will be freed up for true collectors

(22/25)

3. There will be a reason to use the marketplace again and, hopefully, the market will return to healthy supply / demand dynamics (it will have ups and downs but without intervention, we are fighting a losing battle)

(23/25)

Downsides of #narrowthegap:
1. It will appear as if Top Shot is losing steam because 300k account pack queues will become 100k account pack queues and the media (Rovell) will have a field day and release "The Death of Top Shot" articles

(24/25)

2. Drops may be less fun for collectors because free

is fun. Sure, but collectors are playing a losing game, even though they occasionally get a 5x on packs.

If you held moments over the last 2 months, you are down 50%+, if you *only* flipped packs, you are

(25/25)

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