Zed Run as an Investment Case: Growth, Economics, and Key Mistakes

Virtually Human Studio is an Australian Web3 studio that launched Zed Run in 2018. The project was founded by Chris Laurent, Rob Salha, and a team specializing in blockchain-based digital products.

Zed Run became one of the first mass-market NFT products in the gaming segment and, by 2021, reached approximately 125,000 users and around 14,000 “stable” owners.

According to industry reports and team statements, more than 420,000 NFT horses were created over its entire lifecycle. After being affected by one of the many “NFT winters,” Zed Run faced challenges in engaging with its community and a decline in asset prices. As a result, the company decided to discontinue support for Zed Run after six years of operation. Having completed development of its first game, the team prepared Zed Champions, where the focus shifts from mass NFT growth to a more sustainable and controlled economy with a limited pool of assets.

Zed Run’s Economic Model: Why the Project “Took Off”

Zed Run became a hit not because of gameplay itself, but due to a combination of three factors:

• Ownership (NFT assets instead of in-game items)
• DeFi-like economy (breeding, marketplace, fees)
• 24/7 game cycle (continuous races and liquidity)

This created a new GameFi horse racing segment, where the user simultaneously acts as a player, investor, and trader.

1. Breeding as the Core Growth Mechanic

Breeding (horse reproduction) is the key driver of Zed Run’s economy.

How It Works

• Each NFT horse has unique “genetics” (bloodline)
• Breeding produces a new NFT with probabilistic characteristics
• Rarity and performance → directly affect price

Why It Was Brilliant

1. Built-in demand
   Players always need new horses → continuous cash flow
2. Economic scalability
   Unlike traditional games, content is created by the users themselves
3. Recurring revenue
   Breeding fees are the platform’s main revenue source (similar to a SaaS model)

Insight

Breeding effectively replaced the traditional monetization model (DLCs, subscriptions), turning the game into a generative asset economy.

2. NFT Horses and the Secondary Market

NFT horses are not just in-game objects but полноценные digital assets.

Key Characteristics

• Uniqueness (non-fungibility)
• Liquidity (trading on marketplaces)
• Utility (participation in races and breeding)

Since 2019, the platform has sold NFT horses worth over $30 million.

Secondary Market

Zed Run integrated into the ecosystem:

• OpenSea
• internal marketplace
• peer-to-peer transactions

Why This Became a Growth Driver

• Players turned into traders
• Asset prices were determined by the market
• Speculative interest emerged

Insight

Zed Run effectively created a two-layer economy:

• Primary market (mint + breeding)
• Secondary market (trading + speculation)

3. Weaknesses and Limitations of the Model

Despite its success, the model had fundamental issues.

3.1. Breeding → Asset Inflation

• Excessive horse production
• Dilution of NFT value
• Pressure on the secondary market

3.2. Conflict of Interest

• Platform benefits from supply growth
• Players benefit from asset scarcity

3.3. Lack of Predictability

• Genetics did not always correlate with results
• Declining trust in the model

3.4. Market Risk

• Decline in token and NFT prices (especially after 2023–2025)

3.5. Final Blow: Product Shutdown

In 2025, the closure of Zed Run and transition to a new project was announced, which:

• destroyed part of user value
• undermined trust in NFT assets

4. Why Zed Run Still Became a Hit

Despite failing in the long term, the project became a культовый case. This is largely explained by its first-mover advantage, as it was one of the earliest mass products in the GameFi space.

In addition, a simple yet powerful idea played a key role: “own, breed, earn,” which was easy for a broad audience to understand and scale.

The psychology of ownership also had a strong impact: the NFT format created a significantly higher level of engagement compared to traditional games. Furthermore, the project amplified interest through financial gamification, where the player was not just a participant but also an investor and manager of their own digital asset.

5. Macro Lessons for Investors

Zed Run is not just a game but an economic experiment.

What to Consider:

• NFT ≠ sustainable demand
• Generative models require inflation control
• The secondary market is critical for survival
• Community trust is the key asset

Conclusion: Transformation

After shutting down Zed Run, the team focused on a new product called Zed Champions.

Key Development Directions:

• abandoning the old NFT economy
• implementing a new reward system
• migrating users via a badge-based asset system
• attempting to fix breeding imbalances

Transition details: Read about Zed Champions transition

Main takeaway: GameFi projects should be designed not as games, but as sustainable economic systems with controlled inflation and long-term asset value.