It has been one hell of a week on Sorare. I’ve had a few messages from people asking what is going on so I thought I’d share my thoughts on what is driving the changes we’re seeing and what to expect next.

To recap, for anyone who’s been under a rock and missed it, the growth on the platform this week has been nothing less than exponential. Here’s a graphical representation of that, with thanks to SorareData:

That spike at the end of the graph shows a roughly 15x jump in offer volume this week. The auction volume graph is broadly similar.

We’ve seen prices for the majority of the players on the platform absolutely skyrocket, led by the high profile players like Mbappe. A week or two ago, you could pick up Mbappe for around 3.000 ETH. He’s now going for around 30.000 ETH, which in real money terms is over £30,000. Mind blowing.

Many people are looking at this and thinking ‘is this a bubble?’ – which I think it a completely rational response. Actually though, I think there are some obvious reasons behind this rise and for that reason, I don’t think we’re in a bubble as such.

Driver 1: Scarcity tightening

We talk about scarcity a lot on Sorare as the control of card circulation is a key part of the game. Up until recently though, I don’t think we’ve seen scarcity really bite like it’s starting to do now.

There are now over 6,000 Sorare managers with at least one Blockchain card, compared to about 1,500 when I joined in August. There were 19,000 entries in the Rookie league this gameweek, nearly double the previous gameweek. We’re seeing huge numbers joining the platform and cards are simply not being issued quickly enough to keep up. Or to put it more bluntly, there’s about 140,000 licensed cards in circulation. Divide that by 6,000 managers and you get to about 23 cards each (and you’d be lucky to get a goalkeeper!). Competition for players is fierce and naturally that’s pushing prices up.

Driver 2: Collectors and new eyes on the platform

We’ve seen a new breed of managers join Sorare this month – NFT collectors. When Gary Vaynerchuk announced his arrival on the platform by buying a Joao Felix Unique on 14th February people sat up and took notice. This guy is an entrepreneur with over 10 million followers on Twitter and Instagram combined and is a big deal in the technology and NFT sphere (and yes, I’d never heard of him before either).

Gary Vaynerchuk didn’t just buy the card, he then continued to talk about Sorare and NFTs right across his timeline. This had the dual impact of legitimising Sorare as a concept and putting it in front of the sort of people who might want to stick a load of cash into high profile players just to sit and hold them. The sort of people that are pushing up the prices of players like Mbappe, Felix and others right now.

And if Gary Vaynerchuk’s seal of approval wasn’t enough, at the end of the week Sorare broke into the mainstream with the news of a $50 million investment lead by Benchmark, the venture capital firm that was an early backer of Uber, Twitter and ebay. This sort of news is bound to turn the heads of people with large amounts of money to throw into the platform, particularly when you compare Sorare to other NFT platforms, like NBA Top Shot ($13.5 million in sales in the last 24 hours) and you realise just how early on we are in Sorare’s potential journey.

So we’ve got a much expanded user base which is also shifting slightly in the approach that managers are taking – and we’ve got a snowball effect happening as a result…

Driver 3: Dilution of the prize structure

The current Sorare leagues and the prize structure was last updated a few months ago, when you’d expect to play against about 900 other managers in Global All Stars Division 4. This gameweek there are over 2,600 entries in that division alone but the structure is unchanged so obviously your chance of winning a prize is nowhere near what it was.

Suddenly your chance of adding a card to your gallery is much reduced, particularly in the lower divisions. Obviously the ETH threshold reward is a key benefit of the current structure and shouldn’t be overlooked. When ETH rose at the start of the year, the potential to win 0.020 ETH up to twice a week looked very tasty indeed and obviously that’s money that goes back into Sorare (on the whole) supporting the continued growth of the platform. But winning 0.020 ETH is far less attractive right now when card values are skyrocketing and it’s almost impossible to pick anyone up for that sort of money.

So we’ve got a diluted prize structure alongside rocketing card values and increasing scarcity. What happens next is obvious – people change their focus in order to make the most profit.

Driver 4: Invasion of the flippers

When I started my Sorare journey, liquidity on the platform was pretty awful to be honest. If you bought a card, you were likely to be stuck with it for the long term unless you were prepared to drop your price or take advantage of a player’s sudden uptick in form. As a result, most people were largely in this for playing the game, not for flipping cards for profit.

But things have changed. With scarcity tightening and card values going through the roof I’d argue the easiest way for most people to make money quickly on Sorare right now is to flip cards, particularly while we’re in the season of FOMO with all these new eyes on the platform.

Of course this is where things start to become a bit tricky for the rest of us and some bubbles may start to form. It’s getting very hard to grab anyone at auction at the moment and there’s nothing worse than losing out at auction only to see the player you failed to snag being put up for sale for 25% more a few minutes later by the winning bidder. This adds even more upwards pressure onto prices and some of it is completely irrational and not at all linked to the real worth of the card (in SO5 or collectable terms). There’s a danger that people are going to lose their heads a bit here.

On top of that, we’ve got a good chunk of new users who came to Sorare via a referral link and desperately want to win their five cards at auction so they can get their freebie. This is also putting upwards pressure on the New Signings market.

So what next?

I don’t really want to give advice here – this is a real money game and you have to make your own decisions about how you respond to changing circumstances – but I will tell you how I’m approaching it.

Personally, I joined Sorare because I love the game and I don’t want to lose that focus and start flipping – that’s not for me. Having said that, if I was lucky enough to be sitting on a Rare Mbappe card like some of my friends were, there’s no doubt I’d take an offer for 20.000 ETH or whatever else some mad bastard wanted to offer me. Some offers are really too good to turn down.

So I will take a long hard look at my Gallery and consider whether any of my cards are surplus to requirements at this point and perhaps sell into the rise where I can – providing I can still put out some good SO5 teams of course.

The reason I don’t want to sell more is because of what I believe is around the corner…

Firstly, this is only the very start of the growth curve for Sorare. We really are early adopters here. This thing has serious financial backing and the support of some huge names – Gary Vaynerchuk, André Schürrle, Gerard Piqué, Antoine Griezmann, Rio Ferdinand, Oliver Bierhoff, Ubisoft, the list goes on.

There’s also a smart team behind this thing – a passionate, skilled team that listens to the community. We’re already seeing them make small moves towards addressing the scarcity issue by increasing the frequency of auctions and they’ve got more tools in their locker yet.

Fast periods of growth always put a strain on a small company but all of the above gives me the confidence that the foundations are solid and we’re in no danger of burning ourselves out in a short-lived bubble.

As part of that, I also feel pretty comfortable with the trajectory of ETH. I don’t want to talk about this too much as I actually don’t think it has as much impact as some people seem to think but we did have a sharp rise at the start of the year, followed by a pullback of about 25% or so. Someone who knows much more about this than me sent me a graph that shows the pullback was to be expected and that ETH is now back within the bounds of reasonable, steady growth. That’s good enough for me.

Secondly, I think a change to the prize and/or league structure can’t be far away now (as they’ve confirmed on the Discord channel) and that should help to refocus people on the SO5 game and hopefully make things easier for new managers to get a foot on the ladder.

I know it’s hard for new managers at the moment and I’m sure that’s something that Sorare is acutely aware of too. They will want to address that but they’ll need to do it carefully so as not to upset the balance too much or devalue people’s existing collections. It might be too soon for a new level of scarcity but the continued addition of new teams, and perhaps even more frequent auctions will help to address the scarcity issue, without diluting one of the core selling points of the platform.

I fully expect the new structure to include more opportunities for winning ETH but we’ve probably got room for more card rewards too, given that the whole of the Eredivisie was added since the structure was last changed.

In the meantime, there is still value to be had. In any game, the best way to win is to find the hidden gems and that’s true of Sorare as much as anything else, particularly now. If you don’t follow the crowd and get drawn into ridiculous auctions, you can still build a team for a reasonable amount of money. It’s harder than it was, for sure, but you might just be getting in before the next boom.

As they say, the best time to join was yesterday. The next best time to join is today.

If you want to give Sorare a go, sign up using my referral link and get a free Rare card after you buy your first five cards from auction: https://sorare.pxf.io/MDJ (and get in touch so I can help you as you start on your Sorare journey).