Derived Markets and Turning Profits with Aavegotchi
Aavegotchi and Gold

Derived Markets and Turning Profits with Aavegotchi


*This article is part 2 of "Why Don't You Own an Aavegotchi?"

**For a thorough summary of Aavegotchi, please see the Aavegotchi Wiki and AavegotchiStats.


As a refresher from the former article, I stated:

Generally, the most successful cryptocurrency projects offer four distinct portions of value. Those portions include:

  • Innovative technology
  • New derived markets
  • Strong community
  • Marketability

Think about it. This applies to Bitcoin, Ethereum, Monero, Uniswap, Aave, Compound, Maker, and so many other great projects. Everyone has their own crypto judgement metric; nevertheless, I stand by mine above. Aavegotchi shines within each one of these categories.

And for this article, we'll be focusing on the new markets derived from Aavegotchis and the profitable opportunities therein.


The Basics

It's imperative to grasp the basics of the Aavegotchi game in order to comprehend the motivations of the market actors. Three types of competition exist in the Aavegotchi world which are:

  • Rarity farming
    • Your Gotchi's attributes determine its rarity score.
    • Equipping wearables add or subtract specific attribute points.
    • The more extreme (either high or low) your Gotchi's attributes, the higher your rarity score -- 985k GHST prize pool.
  • Kinship
    • Every twelve hours, you can "pet" your Gotchi which raises its kinship score by one.
    • If you fail to pet your Gotchi after a 24 hour period, your Gotchi's kinship decreases by one.
    • The higher your Gotchi's kinship, the more GHST you earn -- 280k GHST prize pool.
  • Experience
    • Your Gotchi receives experience points when you participate in Aavegotchi community activites.
    • Such activities include voting, attending Discord meetings, achieve a certain score in a mini-game, and more to come.
    • The higher your Gotchi's experience, the more GHST you earn -- 140k GHST prize pool.

Gotchi page

With this superficial overview out of the way, let's get into the actual markets.


Unopened Portal Speculation

closed portals 

In order to summon an Aavegotchi, you must purchase a portal. Inside each portal sits 10 Aavegotchis from which to choose. Each Gotchi has verifiably random traits (see Chainlink VRF) and Spirit Force (aTokens that will earn interest as it sits in the Aavegotchi as collateral). The speculative aspect of portal hodling seems similar to the Pokemon card pack market. Anything could be inside--be it a holographic Charizard or just a set of commons. With Aavegotchi, however, the holographic Charizard equivalent would be an Aavegotchi with a rarity score of 600. There's also the novelty of owning a generation 0 portal. According to AavegotchiStats and as of this writing, only 2,537 (out of 10,000) portals remain unopened.


Opened Portal Speculation

opened portals

The speculative aspect with opened portals lies in the absolute rarity score. The rarity calculations for rarity farming include interesting dynamics where having fully maxed-out traits doesn't necessarily equate to high rarity. Consider if every player grinded their energy trait up over 100 or down below 0. These extreme traits would no longer be rare and thus, an average score of 50 could be the new rare. This is down the road but certainly worthy of contemplation.


Wearables

godlike wearables

wearables

Wearables epitomize the creme of the creme in Aavegotchi markets. Those Godlike wearables above: the creme of the creme of the creme. 

If you notice in those Godlike wearable images, each wearable increases your Gotchi's traits by a total of 6 points. On top of that, equipping a Godlike wearable increases your rarity score by 50! 1st place prize in rarity farming is 95,000+ GHST. GHST is trading over $1.50 as of this writing. I'll let you do the math. 

Acquiring Wearables

The tried-and-true method of buying low and selling high of course works here. Wearables for hands, as of now, sell higher because supply is relatively thin and Aavegotchis can equip two. Head wearables heavily saturate the Gotchi Baazaar; ergo, they tend to sell cheaper. On occasion, the Gotchi team puts out wearables in the Gotchi Maall; however, they sell out quick. Everyone simply resells at the Baazaar with an inflated price.

The more interesting method for acquiring wearables and turning in nice profits resides in the Aavegotchi raffle. 

The Raffle

Chainlink's VRF (Verifiable Randomness Function) also powers the Aavegotchi raffle ensuring fairness and transparency. Past raffle statistics can be found here.

raffle tix

FOMO Method

The easy, lazy, and rather inefficient method for obtaining raffle tickets consists of waiting for the Aavegotchi team to announce a new raffle, then spending GHST tokens to buy raffle tickets. I say "inefficient" because you're spending GHST tokens for a chance at winning a wearable item. Aavegotchi raffles do not adhere to the "Everyone gets a trophy" mentality. As of now, you most assuredly have no guarantees to win.

*Perhaps, you could take a look at the price of raffle tickets sold during the last raffle and compare it to their prices now and find opportunities. 

Staking Method

A more intelligent approach might include taking advantage of Aavegotchi's staking system. By staking GHST tokens, you passively earn non-transferable tokens called Frens which can purchase raffle tickets. Staking GHST earns you a 1-to-1 ratio of Frens per day. You can take this even further and add liquidity to Quickswap and earn Frens for both GHST-QUICK LP tokens and GHST-USDC LP tokens. 

According to the Aavegotchi Roadmap V2, the next raffle won't take place until Q3 of this year. That's plenty of time. Let's say that's two months from now and you stake 1,000 GHST. That's ≈60k Frens to buy raffle tickets. Passively earned. Rare wearables generally sell between 60 and 200 GHST. You could try your odds with Legendary tickets. Legendary wearables tend to sell between 350 and 600 GHST. 

To see wearable quantities and the protocol from the last raffle, click here

A great tool for calculating raffle ticket odds (more useful during the raffle) is ghst.gg


Actual Aavegotchis

Of course, if you're new and don't want to go through the summoning ritual, you could just buy an Aavegotchi on the market. This route is fairly straight-forward. Some opportunities to look out for (in regard to both buying and selling) reside in the Gotchi wearables and Spirit Force. When you purchase a Gotchi, you're also acquiring their Spirit Force (collateralized crypto) and equipped wearables. For example:

gotchi

Take note of the Sushi Bandana (70 GHST), Sushi Coat (80 GHST), and 2 Grenades (6 GHST). That'll sell for 156 GHST at market value. In conjunction with a base 521 rarity score (which is good), this Gotchi comes with a SPRT of 1 aLINK. If you purchased this Gotchi, that's yours as well. On occasion, you'll see some Gotchis with a SPRT of 4 aLINK, 100 aDAI, etc. Keep this in mind.

Sending Your Gotchi to Live on a Faarm

For an interesting market dynamic, I should mention that you can sacrifice an Aavegotchi. This action requires that you transfer their SPRT and XP to another Aavegotchi. Let's say you don't want to shell out a lot of money for a new Gotchi fren. You could purchase one with a low rarity score and participate in voting, mini games, and any other ways to gain experience points.

First, find a cheap portal or Gotchi:

portal

Then, participate in Gotchi mini games and vote on proposals when they come forth. After you accrue a sizable amount, you can simply sell your Gotchi for a healthy price. It helps to explicitly state what you're selling in the Aavegotchi's name:

exp gotchi

The rarity score of 386 is quite low in this example, but 690 XP turns out to be a big boost to just about anyone after the Gotchi's burned. Let's not forget, the XP score competition holds a prize pool of 140,000 GHST. 

Finally, purchase a Gotchi with a good base rarity score with your profits:

gotchi image


To Conclude...

This article aimed to illuminate some of the interesting derived markets within the Aavegotchi world. By no means should this be taken as a comprehensive guide or financial advice. Rather, I encourage you to take this as a starting point. Aavegotchi officially launched just a couple short months ago. I did not include a few smaller markets and surely, as Aavegotchi grows and matures, many new and novel market dynamics will surface. 

This finally concludes the derived markets and turning profits aspect of Aavegotchi. Just tell me:

why,

oh why,

do you not own an Aavegotchi?

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Andrew Fleming
Andrew Fleming

Writer, programmer, certified bitcoiner


Break Laws Not Hearts
Break Laws Not Hearts

As a crypto enthusiast and bank-shorter, I'm learning more and more about the disruptive nature of cryptocurrencies every single day. I believe privacy coins and decentralized finance (DeFi) will break us free from the current debt-slave paradigm and empower us to build a better world. Read my work to find out why and how.

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