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Real Money Racing: A Deep Dive

Real Money Racing: A Deep Dive

Hello fellow virtual horse racing fans. We are proud to provide to you more in-depth details about the racing economy as live release is upon us. 

First, let"s learn a little bit about how the economy of real life horse racing works – specifically “how do horse owners earn money racing?”. I"d encourage you read this article which dives into much more of the details, but here"s a straightforward diagram that helps explain it: 

There are countless intricacies to the system, but generally speaking the simple 30,000 foot view version is that 

“Horse owners foot the bill to buy and care for the horse, but the wagering public funds the race purses” 

How much each horse wins out of the purse also varies, but most common is ~60% of the purse going to the winner with at least 1% of the purse going to every horse entering. This style of payouts has been in place for nearly 50 years – it has proven to be effective at attracting better horses to racing by ensuring that all entrants always get some money. 

How does this apply to Photo Finish™ LIVE? 

Well, our tagline has always been “As Real As It Gets”. So, when it comes to our virtual horse racing ecosystem, we plan on creating the exact same structure as what we see in real life. Virtual horse owners should be incentivized to acquire and breed horses because winning races purses is an attractive (and potentially lucrative) proposition. 

However, today, we are of course early! In all of our Beta testing operations, we"ve been operating on a more “pooled” version of purse racing, which does still happen across the world, though not nearly as often as the standard “juiced” purse racing from the wagering spectators. 

Here"s a quick diagram of how race entry fees and purses have worked in the beta versions:

(quick note: these numbers have changed as we"ve experimented across the betas but it"s a general idea)

The “Cold Start” Problem

When you launch a new product or service, or put a creative work like a song or a book out in the world, you often face a “cold start problem.” It"s harder to get momentum when there are no existing users, just like it"s harder to start a vehicle"s engine when it"s cold. – Kevin Delaney

As a reminder, we have only a maximum of 4,350 horses in the entire game to start off. We"ve rewound the clock, Doc Brown-style, and are starting at the beginning of the creation of the sport. So, there are headwinds! We have…

  • Small-ish initial horse population…
  • Which means a limited number of races…
  • With an early adopter audience (aka not hundreds of thousands of spectators)…
  • Where wagering is still geo-locked and in legal review in many territories..

The entire success of the game hinges on owners wanting to continuously buy and race more horses. So, how do we incentivize players to do so in a sustainable way?

A quick step back…

Before we answer that, let"s go over the things we know. We"ve been beta testing for ~9 months now, and we"ve learned a lot! The first thing we can use as a guide is how many horses exist in the population season by season. As you can see in the graph below from Beta Version 2, we have a nice steady ramp of population starting in Season 4 onwards (when the first crop of foals begin to be born from the Generation Zero horses). 

This doesn"t at all account for the amount of horses “racing” each season, as many are retiring, many are new foals, etc, but you can figure out rough calculations on that yourselves by assuming horses race at a maximum for 6 seasons, and anywhere between 35%-50% of the population in beta was breeding at any given time. 

This is a good time to remind everyone that Photo Finish™ LIVE is the most sustainable game and ecosystem ever built due to the implementation of aging and retirement. Ok, moving on…

We all know that the performance of the beta versions will not be a 100% accurate indicator of performance when the game is live. However, these are good reference points for you at home to run calculations against (up or down) – conservatively, a horse population that climbs up over 10,000 within a year (which creates much more racing competition) seems to be a viable prediction. Maybe you disagree, that"s ok! 

The next part is harder – race entry fees. Beta v1 and v2 are most assuredly not something that can be relied on heavily, as no real money was at stake. With that being said, we can still look at the overall numbers of the schedule in Beta v3 and try to make some predictions. 

As of today, 2,510 races will be available for the entirety of the first season of the live season beginning on April 26. (Note, this does not account for on-demand races created by the Oracle). Thus, if every single race were to run at maximum horses, the total $DERBY entry fees collected would be roughly 52,786,600 $DERBY (which equates to $659,832.50 USD value). We all know not every race will run at maximum, but you now have some real numbers you can go off of. 

$DERBY is the in-game virtual currency utilized for racing, breeding, buying, selling, and even using your skill to making winning picks on races. It is stable and always 100% collateralized. You can view the wallet here at any time. It is ALWAYS exchangeable at a rate of 80 $DERBY to $1 USD. You can think of it almost as “V-Bucks” in Fortnite.   


Luckily, as a team and a community, we are all aligned in that we want every single race to fill. However, in a “winners-takes-most” racing environment, we have a world where most owners tend to sit on the sideline for fear of losing. Looking back at real life horse racing, and our charts above, the reason that more and more people breed new horses each year is that they have a chance, no matter how small, at a massively outsized return on their horse. We have proven at this point that we have a game where smart owners and trainers can use skill to find the right races to enter and keep costs in check. The future of Photo Finish™ LIVE is clear – these owners can utilize their skill to even greater effect as they race for purses subsidized by the wagering spectators without having to come out of pocket with high entry fees. 

Race Subsidization to grow the audience: Platform Fees + $CROWN

Well, now let"s get to the good stuff. We fully believe in our vision of recreating a true-to-life economy where EV- spectators can fund EV+ racers. In the Beta period a week ago we had our first race that had a higher handle in the pool than the actual purse amount, which was such an exciting step for us all – we can now see the light. Our multi-year partnership with Churchill Downs is yet another giant leap towards the goal of bringing in a much larger spectator audience.  

But this isn"t something that will happen overnight. So, in high level terms, here is what Photo Finish™ LIVE will be doing to incentivize racing in the “growth phase” of the game, which we expect to last 12 months, ending in May 2024: 

    1. 100% of Breeding Fees and Marketplace Fees in $DERBY will be set aside for race purse subsidization (w/ no Third Time platform fees)
      1. Breeding Fee (Stud Market) = 20% 
      2. Breeding Fee (In-House Only) = 8,000 $DERBY
      3. Marketplace Fee = 5%
      4. The minimum guarantee for $DERBY purse subsidization in the first season is 1,000,000 $DERBY. If the above fees do not fill it, Third Time will fill the rest.   
    2. 20% of all race entry fees in $DERBY are passed directly to the Track Owners (w/ no Third Time platform fees)
    3. The remaining 80% of entry fees all go to the winners, at the same payout tables – based on finish position – as previous beta periods
    4. Every single race purse that has an entry fee is subsidized with $CROWN. Every horse that enters, regardless of finish position, earns a $CROWN reward. (Internally, we affectionately refer to these as “crown stimmies”)
    5. WIP: Third Time is in talks with liquidity providers to engineer a buy and burn fund to attempt to keep $CROWN stable, but unfortunately we do not have locked funds for this yet. So, you can think of this as a purely speculative angle that may or may not happen. 

DISCLAIMER #1: These are the values we are starting with in the first season. Despite running countless models and analyzing previous betas, we just can"t predict how everything will go, and absolutely reserve the right to change the numbers above in order to keep the platform sustainable. Plan accordingly! 

Again, it"s worth reiterating, after the growth phase, we expect to have created a spectator audience large enough to replace the subsidies with actual funds from their EV- missed selections, leaving ourselves with a truly sustainable virtual horse racing ecosystem that matches real life. 

This is a lot to unpack. We"ll do our best to explain to you why this is one of the most compelling use-cases for a crypto / token-based economy yet and why we believe this is going to absolutely change the game for all projects going forward.  


First, let"s look at a diagram of what this might look like in practice. The first race of the season might have an 800 $DERBY ($10 USD) entry fee per horse. So maybe a 10 horse field commits 8,000 $DERBY ($100 USD) to the purse.

In this diagram, you see exactly what happens for our example race. 6,400 $DERBY goes to the winners, and ~69 $CROWN goes to every single participant. Every single race has its payout table visible with both $DERBY and $CROWN (including the current market value of $CROWN in USD). 

TL;DR – Racing is no longer a zero sum of $DERBY entry fees, but rather a competition for juiced purses with additional sources of funding. 

We don"t exactly know how much $DERBY will be available from Breeding Fees, Marketplace Fees, and Missed Real Money Picks, so for today we"re going to set those aside as “bonus purse rewards” for races. As mentioned above, we are guaranteeing a 1,000,000 $DERBY commitment minimum, as we really can"t predict how much these will be. We"ll most assuredly transparently work with the community to communicate how we will allocate those season by season.  

But things get interesting when we start talking about $CROWN subsidies. From the beginning of the project, we created a “Treasury” with a 22% allocation, or 55,000,000 tokens in total. Once live racing begins, this Race Purse Treasury will dedicate a set amount of $CROWN subsidy for EVERY REAL MONEY RACE

Every season for the first 12 months, the treasury has an allocation for that season, and it will spread its allocation across all races at the appropriate percentage based on the entry fee stakes (i.e. higher entry fee stakes have higher $CROWN stimmies). As of today, April 25, 2023, using the very simple formula of 55,000,000 / 13 seasons (aka one year), we"ve allocated a 4.23m $CROWN subsidy for each of the next 13 seasons. 

DISCLAIMER #2: We reserve the right to change this amount each season to react to player behavior and keep the platform sustainable. 

Utilizing our simple 4.23m number, you can see emission rates of the $CROWN token over the next 2 years (based on this new development combined with our previously stated tokenomics on our roadmap and website):  

A knee-jerk reaction might be – “20% of our entry fee money goes to the track owner ($CROWN stakers), and I am getting $CROWN in return? Is this a rug??”

 trip rug yoink wasnt ready rug pulled GIF

Well, first, remember there"s at least 1,000,000 $DERBY allocated to the racing public (hopefully more) to encourage more active participation, even if we have to pay it directly out of our wallet. But past that, here"s some of our thoughts on why this model makes the most sense: 

By sending 20% of all entry fees to the $CROWN stakers, we have created a clear and tangible benefit to hold $CROWN. And not to just hold it, but to diamond hand it. It is hard to think of a single gaming token out there associated with a game that has built something with such direct and tangible value. Imagine the smells as word spreads about the power of staking $CROWN and becoming a racetrack operator. 

If every single PFP holder earned every single reward from every second of staking, they would earn roughly 4.8 million $CROWN tokens. As of today, that number is 70% (~3.3m $CROWN)

If every single one of those 3.3 million $CROWN tokens were staked into track ownership, and every single one of our races filled to 100% capacity, 3.3 million staked $CROWN would have earned 10,555,400 $DERBY tokens, worth $131,942.50 USD, in 4 weeks time. 

Disclaimer #3: This is not financial advice, do your own research. We can in no way predict how many people will race, stake, etc. 

This immediate value-add to the $CROWN token jumpstarts the entire ecosystem. The team, racers, breeders, and owners are all aligned. Everyone wants more $CROWN, and they don"t want to dump it, they want to STAKE it. 

Worth saying though – maybe you are a “race maxi” and just want more $DERBY back. Don"t worry, you"ll be able to swap from $CROWN to $DERBY effortlessly directly from your Photo Finish™ LIVE wallet.  

Now, this model isn"t all that different from any of the other games that rocketed out of the gates from zero to a $500M USD market cap. The biggest difference here however is that we have a plan. These subsidies are clearly capped, and they clearly reduce in effectiveness over time as the population grows and therefore the subsidies don"t ‘go as far". Priority zero for us will always be to offset the subsidy-effect decline with sustainable sources such as; an increasing population (which means more breeding fees, marketplace fees, and race entry fees), aligning sponsors / advertisers, and most importantly building a wagering audience – remember, As Real As It Gets.

What happens after the “growth phase”?

After the planned “growth phase”, we expect a much more straightforward platform for virtual horse racing. You as a player have finally found the most engaging and fun horse racing game in the world, and even though entertainment is obviously priceless, you can also keep working to capture more and more $DERBY from track ownership, wagering, breeding, and racing. We as a platform make revenue off of the fees from track ownership, wagering, breeding, and racing. There"s no need for complex tokenomics, in-depth percentage splits, etc. The owners of the tracks will split the percentage cut of the $DERBY currency flowing through them with Third Time. More horses = more racing = more flow through to the track owners and to us as the platform operator.

Winning Win Win GIF by CBS 

Disclaimer #4: If the last 12 months in the crypto space have taught us anything, it"s that things can change. This is being shared in order for you to understand the direction we are heading. Specific details may be subject to change in order to comply with regulatory compliance. The team might also just come up with a better idea on how to best implement a feature. Nothing in this post is meant to solicit investment in any way shape or form. The details are being shared for informational purposes only. The team reserves all rights to modify this document in the future in order to provide the best possible experience. 

If you"ve made it this far, thank you for reading, and we hope you are looking forward to building one of the most popular virtual sports in the world over the coming years. 

Own your piece of history. 

Ian Cummings
Founder / CEO
Third Time Entertainment, Inc