FIAT versus ETH
FIAT versus ETH
Not the same team, but the same passion
Hi, I’m tecomah, I publish every two weeks a data analysis about a specific topic related to Sorare. Today we focus on how the community thinks about currencies when it comes to making decisions on Sorare. Because personally, this is how I feel when I see Ethereum losing 10%.
If you like this article, please help up gain visibility. And if you’ve not joined Sorare yet, feel free to register using my link.
Methodology
We published a form from which we get 205 respondents. Thanks to all of you! We asked managers to tell us more about
their current gallery
their crypto-knowledge before joining Sorare
how they bought their first cards
how they display prices in Sorare
whether they see Sorare as a hedge or a bet on Ethereum
how they react to price variations of Ethereum
Obviously, there may be a bias as users that answered this form are probably more engaged than the average user.
Are Sorare Users really into crypto?
40% of Sorare users are totally new to crypto. For 85% of users, Sorare cards are the first NFT they bought.
I believed that Sorare's first users were for most of them crypto whales and that the new wave of users was mostly composed of non-crypto users. It is not the case.
In fact, the figures are quite stable. We can even notice a growing percentage of users that already bought cryptocurrencies (42% to 52% in one year). This is a signal of cryptocurrencies getting progressively mainstream, before NFTs.
Is Sorare used as a crypto product?
There are different options to buy your first cards:
Transferring Ethereum from your personal wallet to your Sorare wallet
Buying Ethereum on exchanges that you transfer to your Sorare wallet
Buying with your credit card thanks to the Ramp solution.
You can also change your preferences to display prices in FIAT (EUR, GBP, USD), Ethereum, or both.
Credit Card is now the leading payment method, as 39% of users bought their first cards it. 25% of users bought cards with Ethereum they already had. However, Ethereum is still the reference currency, as 51% of users display prices in ETH only. 32% display both and 16% see prices in FIAT.
An intuition is confirmed: the behaviors are very different according to the scarcity of cards owned by the user:
Owners of Limited Cards more often bought their cards with a credit card, and display prices in FIAT.
Owners of SR and Unique tend to buy cards with Ethereum they already had, and display prices in ETH or both ETH/FIAT.
How do users react to a price variation of ETH?
First, we asked the respondents how they considered Ethereum. And there is no consensus on the topic. While 25% of respondents don’t take ETH into consideration, 40% see Sorare as a hedge on Ethereum, and the remaining 34% see it as a bet on Ethereum.
However, when looking specifically at users that bought Sorare cards with Ethereum they already had, there is a vast majority (60%) considering Sorare as a hedge on the crypto-currency.
We asked the community how they react when they see ETH spiking or dropping. The unexpected answer is: the majority of users don’t care. Probably because they look at FIAT, are long-term ETH, or as some of say in the comments “It's already complicated, so when you add the ETH variation to this equation, it becomes a nightmare”.
Still, a small portion of users tries to seize the opportunity of an ETH spike to sell cards. When it drops, a higher proportion of users takes this opportunity to (re-)invest in FIAT.
The community speaking …
The ETH maximalists:
“I see ETH rising long term and therefore concentrate only on ETH currently, as I have no intention on withdrawing”
“Buy cards when ETH is high, sell when low. ETH is the only currency native to everyone playing the game.”
The FIAT maximalists:
“I am very new to the crypto world and view sorare more like a fantasy game with a market twist than a crypto investment”
“I am thinking about the investment I made in euros, and how much my players’ prices are now still in euros, so I can make sure the profit I made is here, without taking care of ETH price variation.”
“FIAT is what’s going to make Sorare mainstream”
They changed their mind:
“For a long time I was hoping people would think only in ETH as I do, but I realize it won’t happen. I think moving to fiat only”
“I saw prices in FIAT when I started in Sorare but as I was getting eth rewards via threshold I switched to see prices in ETH because I got used to it and I felt that I was holding ETH instead of EUR/FIAT”
“Hitting the 0.02 threshold regularly has changed my perspective considerably on the Fiat/ETH balance”
“I now only value in ETH as I don't plan to deposit any more Fiat”
An unnecessary complexity
“I have just registered on Sorare and I am afraid of what will happen on bear market when ETH price will decrease”
“I find that the volatility of ETH brings too big a component to Sorare, having to manage your gallery according to ETH variations should not be part of the game”
“It's already complicated, so when you add the ETH variation to this equation, it becomes a nightmare”
“I may occasionally make sub-optimal decisions by only paying attention to ETH prices but trying to think in both at the same time feels like too much work.”
We also had many users advocating for the implementation stablecoins.
Conclusion
I hope this gives a clearer picture of the market dynamics, even if it's not crystal clear yet … and probably will never be. The equation is getting more and more complex. On one hand, Sorare is the perfect product to make Ethereum mainstream. On the other hand, Sorare is going mainstream by abstracting Ethereum.
Thanks a lot to all the respondents, I was not expecting as many answers. I even had to buy a Typeform premium subscription ;) If you did not answer the form, you can still do it here. More respondents always mean more significance.
40% believe that Sorare is a hedge on ETH, but does this makes sense?