But what is this injunction to stop this race to sell our cards on Sorare? And if I want to sell my card, why shouldn’t I sell it at the best price? I explain in this article why the strategy of selling your cards at 0.001 ETH below the current selling price is a mistake and what position to take against it.
Understanding the mechanics of supply and demand
Investors, soccer players and/or footix, do not expect a vast course of economics, I could not make such an expertise. However, it is interesting to see or review together a “basic” concept of microeconomics, useful to all Sorare players: supply and demand.
Parenthesis – If some people want to be interested in this subject in a simple and playful way, I warmly recommend you the excellent book Economix – The first history of the economy in comics by Michael Goodwin, available at any bookstore, store or online shop. This comic book manages via a few comic bubbles to represent in a simple way all the major concepts used in the Economy, including the question of supply and demand, treated in this article – End of the parenthesis.
For simplicity, I will use the definition on Wikipedia, but feel free to read other books to go further on the subject. For Wikipedia, “supply and demand is an economic model of price determination in a market. It postulates that, holding all else equal, in a competitive market, the unit price for a particular good, or other traded item such as labor or liquid financial assets, will vary until it settles at a point where the quantity demanded (at the current price) will equal the quantity supplied (at the current price), resulting in an economic equilibrium for price and quantity transacted.“.
Simply put: put a property on sale, and its price will naturally self-regulate until it reaches an equilibrium point, as illustrated in the diagram below.
The graphic not being available in English, below is the translation of the different words :
Prix = Price
Demande = Demand
Offre = Supply
Equilibre = Equilibrium
Quantité = Quantity
This equilibrium point defines the price where supply equals demand, and corresponds to the moment when an exchange takes place. As Wikipedia reminds us, “as long as this point is not reached, excess supply causes the price to fall or excess demand causes it to rise“.
From then on, this balance point will fluctuate depending on the performance of the players in particular, but also on the quantity of cards put into circulation or events related to the career of a player (ups/downs, mercato, military service in Korea, etc).
What happens when you lower the price of your card by 0.001 ETH compared to the best offer?
You’ve decided to sell your card, and Roger won’t stop you! You saw him lowering the price of his card to 0.029 ETH while you had put it at 0.030 ETH. Result: he will sell before you, and that doesn’t suit you at all! Come on, I’m going to 0.028 ETH, I’m going back to the top! I’ll sell my card !
The problem with this reasoning is that you collapse the market. Indeed, you want to sell your card right now! And your card has been on sale maybe 3 times already, and has yet been sold. However, you are already below the average price of the card! It’s not normal, it should be sold, right?
Not necessarily. Market liquidity depends on many variables. The number of managers, the amount of cash they have in their possession, the number of cards in circulation, obviously, but not only. Other events can alter the liquidity of the market: the price of ether, the sports momentum (ongoing championships, international breaks, mercato, etc.), waiting for announcements, etc. And all these parameters mean that demand can move slowly for several weeks.
If demand is stagnant or declining, and you get into a willy fight with other sellers, the price of the card will naturally plummet, due to increased supply and stagnant demand.
What’s the result? Everyone loses on the vendor side:
- You may have been able to sell your card in the end, but at a price (well) below the market price ;
- The market will record the correction and pass the drop on to all other cards. If you had other copies of the card, they will also suffer the drop;
- By comparison, other cards with the same characteristics may also suffer the correction. Also your sale can precipitate other cards downwards, which by domino effect will lead to other cards, and so on. And in a few days you end up with a general drop in the value of the cards, amplified by parallel phenomena such as the introduction of new cards on the market, which themselves will now be bought at a lower price, as the available supply is further increased.
That’s okay! You managed to sell your card! And finally at 0.005 below the average price, that’s not bad! But at the same time, you may have unconsciously participated in a domino effect that impacts the entire market.
– Yeah, but it’s not my 0.001 ETH that will impact the whole economy of Sorare…
Indeed, your 0.001 ETH are not responsible for a general drop, but it is the accumulation of drops of 0.001 ETH in 0.001 ETH on thousands of cards and thousands of managers that cause this domino effect.
How do I sell my card then?
There are several things you can do to make your sale successful, at a price very close to the average price:
- Align yourselves! Don’t play this game, and accept that the one who insists on dropping 0.001 ETH will sell his card! You will be the first one after him! In a utopian world, if all sellers line up at one price, buyers will be forced to buy at the proposed price if they want the card, unless they find better equivalent deals. In that case, the average selling price of the card is overpriced on the market.
- Take your time! Things are moving very fast in Sorare, one way and the other! And this is especially true since in addition to its own inflation related to player performance, the site relies on ether, a crypto asset that is also very inflationary. Accept that not everything is played out in 24 hours, a week, a month or even a year! Sometimes you have to wait for better days when your players will perform well to sell at the desired price.
- Find out more! It is not because the article suggests not to enter this practice that you should never do it. If your player is seriously injured and you absolutely have to sell to buy back a player, don’t stay stuck on this principle, it is also your investment. But under these conditions, don’t play the 0.001 ETH race, assume your need and significantly break the price of the card, you’ll have a better chance that it will attract the interest of a potential buyer and that it will allow you to make your sale before another manager lowers the price of his card again by 0.001 ETH compared to yours
That’s it for this week, you now know why this practice can be dangerous for your investment and why you should stop reducing the price of your cards on Sorare by 0.001 ETH.
See you soon,