Virtually Human Studio, which created the successful blockchain horse racing game Zed Run, announced the beta launch of Zed Champions over the weekend. The company is hoping to stage a comeback for what was once a Web3 darling.
Zed Run, now put out to pasture, was a digital horse racing game where players could own, breed and race digital racehorses with other players. It used technologies such as blockchain and cryptocurrency, and it was built on the fantasy of owning a thoroughbred racehorse in digital life, said Nir Efrat, the new CEO of VHS, in an interview with GamesBeat.
This new title Zed Champions builds on Zed Run, which saw the breeding of 420,000 horses and transactions that topped $400 million. Zed Champions introduces a reimagined competitive gaming experience that combines skill, strategy, and digital ownership. And it looks better too, he said.
Hurt by one of multiple NFT winters, Zed Run had challenges interacting with its community and a decline in asset prices. So the company took the step of discontinuing Zed Run after six years. As it sunset the first game, it readied Zed Champions.
Now players have a month to claim, buy or trade their reward badges, which will then carry over to Zed Champions, where holding badges make users eligible for new horses.
It’s not going to be an easy transition. The older game’s horse NFTs are not going to be part of the new game, noted Catalin Alexandru, game economist. This move created a lot of anger and skepticism on Twitter/X, he said.
“The sports team manager/fantasy sports model works a bit better and it’s more sustainable but still doesn’t scale and can be abused,” Alexandru said in a message to GamesBeat.
With the new Trump administration, many believe there will be relaxed regulation and better days ahead for Web3 and crypto companies. Efrat joined as CEO 16 months ago to help turn the company around and launch its new game, Zed Champions.
The company raised $20 million in funding in 2021 in a venture round led by The Chernin Group and A16z. Efrat said the company has healthy runway when it comes to cash.
Zed Champions is built for skill, progression, and competition — a contrast to other Web3 games that are built around speculation, he said. Zed Champions introduces players to an exclusive Racing Pool, where racehorses compete in automated 24/7 events.
The game’s Dynamic Auction Breeding system allows players to strategically pair horses to create champions, using $ZED Token for transactions. This new format ensures a continuous, high-stakes environment where skillful management and strategic decision-making are key.
Zed Champions features round-the-clock automated races, where no manual scheduling required. It has dynamic auction breeding. Players bid on studs with $ZED Token to breed new champions. And it has an augments system. Three types of augments—Passive, Situational, and Progressive—allow players to boost their horse’s performance.
It also has $ZED token integration, which is central to the game’s economy, from breeding to race entry fees. Zed Champions also has leaderboard tracking, where horses earn points for their racing performance, affecting their balance and matchmaking standings.
Efrat said, “Zed Champions represents our commitment to innovation, accessibility, and long-term sustainability in Web3 gaming. We’ve reimagined digital horse racing to create a skill-based experience that rewards strategic thinking while remaining accessible to all players, whether they’re Web3 experts or newcomers.”
Origins
The founders of Zed Run/VHS are Chris Laurent, Rob Salha, Geoff Wellman and Chris Ebeling.
Founded in 2019, Virtually Human Studio raised money from investors like Andreessen Horowitz, The Chernin Group, and Greylock.
The first game, Zed Run, debuted in January 2019 as an horse-racing platform powered by non-fungible tokens (NFTs). It cost $2 to $15 to participate in a race. And players could earn money by winning races or selling their horses on NFT marketplaces like OpenSea. It was anchored by the Zed Run Wallet and powered by Polygon, with no gas fees. With Ethereum Layer-2 scalability reducing transaction costs, the company believed blockchain gaming was poised for mass adoption.
The company started in Australia. In January 2022, the company acquired Spectre Studios. In August 2022, Zed Run launched its governance token. It created partnerships with Stella Artois, NASCAR, and Budweiser.
The key to recovery with Zed Champions is launching a product where the company treats everyone in a fair way and keeps the community informed along the way, Efrat said. There’s a core product, as well as a spectator mobile product that could bring in more social activity and lead to a growth in players.
“We’re seeing the potential in both products, the core product, and then the spectatorship loop,” he said
A reboot
Efrat, formerly of Candy Crush and Dots, is the CEO. Recruited by the founders, he arrived in October 2023 to help turn around the company’s operations.
Asked why he joined, he said, “It was the history of the company and the potential of the company. It was the most successful NFT game. At some point, the company sold virtual horses for over $50 million. They had thousand of people engaging in millions of races. The company was very, very successful, and then it kind of lost its way.”
The problems were related to the NFT winter, bad actors hitting crypto, and speculators taking over.
“The company got really confused, like all of the Web3 products at the time, and it lost users,” Efrat said. “They tried to change the game many times, and it got to the point that the game was really not usable. And it was very hard to scale again from that point.”
Yet Efrat said he saw potential. Unlike most Web3 games and most products, this one has a real utility, he said.
“This one was not just buy yourself a nice thing, and maybe someone would want to buy it and then sell it. It wasn’t just a speculative move. It had a real utility. I could see the potential being in the space of sports, virtual sports, horse racing, which is a huge space in many countries,” he said.
Efrat had experience creating engaging Web2 gaming experiences and creating longevity with live operations. He saw a chance to create something sustainable, starting with better accessibility so more players could enjoy it. In his first attempt to play the game, it was very complicated.
“You needed to go through setting up a wallet, buying assets on other websites,” he said. “You had to find three currencies to buy one horse. It’s very foreign. It’s a very high bar for new users. I wanted to create an experience that was accessible for anyone that wants to engage. That was what made me join in.”
The team has about 40 people now. Efrat brought in some people with experience in both Web2 and Web3. He wanted people with experience in user interface and user experience to come in and create a more engaging experience. Once Zed Champions takes off, Efrat hopes to raise a new round of funding and the scale the product as much as possible.
“I’ve changed the composition of the team a lot,” he said.
Building legacies through breeding and strategy
In Zed Champions, retired horses enter the breeding pool, where their lineage shapes future champions. The breeding system emphasizes strategic pairing, leveraging traits and strengths to build winning lineages.
The $ZED token powers all transactions within Zed Champions, creating a self-sustaining economy where race winnings, breeding fees, and marketplace activity continuously fuel the player treasury. The unique balance system ensures that stakes escalate as horses with higher balances compete, enhancing the competitive environment.
VHS has spent years refining digital horse racing, and Zed Champions is the culmination of that effort. With input from the Zed Run community and cutting-edge technology, VHS is delivering a highly engaging and scalable gameplay experience that will shape the future of Web3 gaming.
The company has also unveiled Zed Picks, a mobile app that allows non-crypto users to participate in races, cheer for horses, and win prizes without needing blockchain knowledge.
Not many Web2 gaming leaders would want to join a Web3 company. But Efrat said he was in love with the technology, which he believes can unlock a deeper level of engagement and attachment for players. It lets the company monetize in a different way and it’s more transparent. Everything happens onchain and the company doesn’t manipulate the system, he said.
“I want to take the best of both worlds. I want to take experiences that are fun and exciting and engaging and sticky and incorporate that with the nice benefits of blockchain technology, which is ownership, more access to assets, and new ways of monetization,” he said. “We don’t do things that users are not aware of. So there are lots of things in Web3 that I found very valuable and conducive for a good experience.”
Efrat has noticed that a lot of players in the West have been against Web3, and at the same time, he has seen that the growth in traditional games has stalled.
“It’s time to experiment, to unlock new models, to use new business models, to engage players,” he said. “I don’t have silver bullet or the magic answer. We come from traditional mobile gaming, and we know we need to try new things, as the market has stalled. There are high barriers to entry. It’s hard to get new games out.”
The transition to Zed Champions
Efrat said the first game was running out of steam after more than five years. he said there were incremental errors in the game. With a fresh look, it was had to comprehend the game and deal with its legacy.
Now the company can bring all the Zed Run players over to Zed Champions. A wider group of players can also spectate the racers and even place wagers on them, either for virtual winnings with gems in social play or real money winnings within sweepstakes.
The wider group of players can download a mobile app from iOS or Android and watch the races. Roughly every 80 seconds, there will be a new race around the clock, all day long.
Players can engage with the stories of the owners and select their picks. Owners of horses can collect their rewards over time and compete on the leaderboards. The company will give older players new horses in exchange for their older horses. The stable rankings are based on the value of the horses. Players are also getting currency tokens that they can use to breed new horses in a transparent way.
Leaving Zed Run behind
The old game is being sunset. The NFTs from the first game are not carrying over. Part of the reason for that is that the prices decline for those NFTs. Some people were unhappy about that.
“I’ve been talking a lot with the community, and obviously on one answer will make everyone happy,” Efrat said. “There are alternatives that would not have been beneficial for the game. The value of existing horses got to a very low point, given all the challenges with the game.”
There was little the team could do with the existing game, he said, and the game needed a new chance at life. He noted a large percentage of the liquidity of the token was allocated to the community. The company will air drop tokens this month in a generous way, he said.
“I’m sure people are unhappy, and I hear them, and I totally understand you had invested. Some people invested a lot of money in buying those horses, but at this point of time, this is what I believe is the best alternative for them in the new game,” he said.
Back to fun
As players breed new horses, they can continue to play the new game. Efrat said there is an alignment of interest between the company and the owners. Players have a month to make the transition, as the old game ended on Friday.
“We’ll create a flywheel that will be beneficial for all,” Efrat said. “We’re definitely going to do anything we can to be generous and fair with the owners to make them become excited about Zed Champions,” he said.
The new token will be on Coinbase’s new Base blockchain, which is stable. By April, the races will start again. The new game will be much faster and players will have more agency and more strategy.
“We’re not selling tokens as a financial product or offering. By looking at the math, as long as players engage with game, the token will appreciate. So our hope is that it will be a flywheel,” Efrat said.
The strategy will be in breeding horses, looking at its history and stats. Then it goes into the racing pool and performs. You can boost the horse so it does better, using powerups or boosts. If the horse climbs the leaderboard, it will gain in value. Once you retire the horse, you can unlock its value for your wallet. Players will be able to participate in the ownership of other player’s horses, which creates social engagement.
“It’s going to be much faster action and much better agency and control over your decisions in the game,” he said.
