CSC Valuation Space: #01 The Unit of Account
Updated: Aug 5, 2019
This article is the first in a series of articles that will cover the valuation and economics of CSC. Details in this article are current as of July 29th, 2019.
CSC is an epic, adventurous space opera of a game, but that is not what makes it unique. What makes Crypto Space Commander unique is its focus on creating a real player-owned economy within the game, with real ownership of game items. That means that the valuation of assets and analysis of the economy will be crucial for any serious player. My goal with this series of articles is to analyze the game economy and dive deeply into the valuation of game assets. Through our discussions of these subjects we aim to provide an even deeper level to the game economy, making for an incredibly rich gaming experience.
We’ll start off with a somewhat controversial subject for many of the OG players but I think will be fundamental to how we look at valuation going forward… What is our unit of account? That is, in what currency do we measure our valuations? CSC is built on the Ethereum blockchain, so ETH is obviously the native unit of account. For the last year and half, almost all discussion has revolved around the value of assets in ETH. In that same period of time ETH in US Dollar terms has gone from $800ish to $80ish to the $200’s where it is now. These are massive fluctuations… Why does this matter? Well, when I bought my first fleet Vulcan Harvester it was .75 ETH (I bought near the end of the first pre-sale period). At the time ETH was $488, and so I spent about $366. For the past month or so Vulcan Harvester FFs have been selling for 4 – 5 ETH; so on the surface it looks like the Harvester has gone up 600%! But, in USD terms ($840 - $1050) its only about 250%. Hey, I’m not complaining but I’m trying to illustrate a point.
Some will say, ”ETH is money and it’s the only money I care about!”. I get it, I sympathize with that ideal of what the future might hold, and what I personally want to see, with a stateless global currency! But the reality is that we all live, work, spend, and invest with our local fiat currencies, which I will short hand reference with US Dollars, Euros, and Yen. But I would say even more importantly, though most of the early players of CSC were crypto enthusiasts who were comfortable thinking in ETH, as CSC is pushed to the masses, the USD, EUR, YEN focus will become the predominate one. Additionally, we will have two in-game currencies, one of which can be purchased directly with fiat. We do not want to stick our heads in the sand and ignore what that might mean as we are evaluating our assets and our economy.
Why this is important has been illustrated very clearly over the last couple of months. A recent favorite ship being traded has been the Phoenix Frostsaber FF, a really cool looking mining ship (see below). This ship was offered as potential rare drop in the Series 1 crate sale. It has traded around in value but as an example I purchased one for 5 ETH about a month ago or what was about $1500 (gulp, writing it out makes me feel it more!). More recently, that same ship has started to trade for 7 ETH! So I’ve made 2 ETH, right? Well that’s the pleasant way to look at it, the reality is I live in the US and all my expenses, except for maybe my ship buying habit, are denominated in USD. That same ship at 7 ETH was actually trading at $1400, so I’d lose $100 on my purchase if I were to sell it today. In the CSC Discord chats people were excited about it reaching 7 ETH, but in reality all it is doing is maintaining or slightly decreasing in USD value. Just this week two Frostsabers traded for 10 ETH each, or about $2100, so maybe the price of Frostsabers is on the rise. I'm in the money now, but the USD value increase is still not as impressive as the 200% increase in ETH price that you first notice.
The goal for future posts in this series is to chart out these value fluctuations in USD and ETH to help illustrate how the market is moving on some of the higher end assets. Through this analysis some level of “stickiness” for ETH prices has been observed. That is, as the Value of ETH rises in USD, the prices of CSC assets don’t seem to fall as much as you’d expect if people were thinking in pure USD/EUR/YEN terms. These movements in the price of ETH may be a great advantage to those entering from the fiat world into this game, and for savvy traders.
In addition, as the CSC universe is fully implemented, we can begin fundamental analysis of different in-game asset values. Just like in the real world, CSC assets will be the combination and culmination of time (mining/crafting) and talent (blueprints/mastery). Understanding these inputs will help us all to recognize when something is either overvalued or undervalued in the game.
For a discussion of Crypto and "Real World" personal finance subjects visit - https://www.money-strong.com/