What are the risks on Sorare ?

You’ll probably read some great stories when you do research on Sorare. Someone made x100 on the sale of a card, Someone took less than 6 months to recoup his initial investment and has been cashing in ever since, Someone was lucky enough to win an extremely rare (and expensive) card, etc. These beautiful stories will undoubtedly excite new players, and we should wish everyone this luck, but these beautiful stories should not omit the risks that may exist on Sorare. Because there are some risks on Sorare. Let’s take a look at these risks on Sorare.

Risk #0 : Gambling

Sorare is a gambling game in the true sense of the word and as such, it is likely to create addiction and dependency. Not all Sorare players will become addicts, but if you have troubles with gambling, take some time to think about it before jumping in.

If some readers are wondering if they have a gambling problem, I recommend that you visit national services available to learn more about the risks of gambling, how to find out if you have a problem, and what to do if you have a problem.

Risk #1 : Financial

If you want to earn rare cards and/or money with Sorare, you will first have to spend some money via auctions, market or private offers to acquire new cards.

Should you bet on a potential, an experienced player, a player in his prime? Each decision will have to be weighed against your investment strategy, your profitability objectives, and a multitude of parameters that will affect the targeted players (injuries, transfers, form/weakness, etc.). Stated like that, it may sound more like a wealth manager than a website dedicated to soccer fans. But in practice, this is exactly what you will (have to) do to avoid disappointments and make your investment bear fruit.

  • Am I getting the right player?
  • Will he perform?
  • Can he be spared from injuries?
  • Will his value increase?
  • Will I find a buyer to resell him?

So many questions that at the beginning of your adventure will not find any certainty. On the other hand, the amount of money you spend to acquire this or that card will be the only certainty you will have.

I think it is necessary to consider Sorare as a financial investment, which can lead to financial gains, potentially high, but also to capital losses. It is essential to be fully aware of this before you embark on this adventure, and to tell yourself that you may potentially lose money.

Risk #2 : Sorare’s growth

The need to rally new championships

Sorare is not even 3 year-old yet, but already like any company, it must grow. This need of growth, vital for the company, is also vital to keep this collectible market alive. Indeed, Sorare‘s ability to break into new business markets (China, United States, etc.) will naturally bring new users, and therefore increase demand. The offer, on the other hand, is constantly growing through the release of new cards.

If the demand does not grow enough, there is a risk of devaluation of the cards over time. On the other hand, if the demand increases thanks to Sorare’s capacity to reach new audiences, the demand will grow while the offer will necessarily be capped by the number of copies of each of the available cards, which will increase the value of the cards.

A concrete economic reality

The idea is not to re-explain Adam Smith’s theory of free trade, but simply to understand that if the demand does not grow, then the volumes and amounts of transactions will naturally decrease until they reach a threshold. And because a figure is sometimes better than a long speech, here is the evolution of Sorare’s transactions, exchange volumes and users since June 2020.

Evolution of volumes, transactions and users of the Sorare service (source : DappRadar)

On the previous figure, we can clearly see the exceptional growth that occurred in March 2021, before gradually stabilizing again.

This decline is similarly reflected in the value of the cards, as can be seen below on the lowest value below each card which indicates the evolution of the price of each card over a sliding month.

Average card price evolution over time
  • Was it the right time to invest at the beginning of March at the time of the activity peak? In retrospect, probably not.
  • Should you invest now? It is probably possible to make good moves, but the observed decline may also continue for some time, until Sorare reaches new audiences.

I’ll refrain from predicting the future, but you should have by now understood the risk associated with Sorare’s need for growth.

Risk #3 : The evolution of the Ethereum blockchain

Sorare is based on a crypto currency, Ethereum. Like the vast majority of crypto currencies, Ethereum is not regulated, and relies on the same logic of supply and demand. As a result, it is extremely volatile and likely to rise and fall dramatically depending on the phenomena and events that affect the world of crypto-currencies. As an example, on the Bitcoin crypto currency, a simple tweet from Elon Musk (CEO of Tesla), was enough to make the price jump by 4% in a few hours.

ETH price evolution since its creation (source : courscryptomonnaies)

In addition to your transactions on Sorare, the evolution of the crypto currency will have a direct impact on the value of your wallet due to the evolution of its price.

Update on 05/16/2021: Between the initial writing and the update of the article, the current price of ether is now flirting with the €3,000 mark, a 50% growth in one month.

Risk #4 : Time, a risk not to be underestimated

Time is a variable that should not be underestimated in Sorare. Indeed, if you invest in very young players, you may have to wait two or three years before you can expect in return a profit. And the reality of Sorare may not be aligned with your daily life, in which you may need to mobilize funds in a shorter time frame. And if you exit while your players are not at their best, you could find yourself cashing in on losses.

Time is a fundamental element to consider in your investment strategy and profitability objectives. So be careful about how long you keep your cards and when you make your decisions.

Avoid unpleasant surprises, stay tuned!

There is no such thing as high profits without high risks, and Sorare is no exception. There are risks on Sorare that you need to be aware of. Make sure you have a clear vision of your investment strategy and profitability goals from the start and stick to it, while keeping an eye on related events (ether prices, news, press releases, etc.) to react quickly if necessary!

Information is essential in Sorare. If you are not yet registered on Sorare, I propose you 3 tips to getting started in Sorare and to avoid the first pitfalls that could damage your experience.

The next blog post will focus on how to get a free card on Sorare.

See you soon,

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