Everytime i see a cute cryptokitty, i couldn’t resist my fingers from clicking on my metamask and buy it. The one doubt i have, is i have no way to tell whether i am buying it at a good price. There is absolutely no way to tell whether my kitty was underpriced or overpriced, especially when the cryptokitties auctions or opensea.io is not very helpful in estimating the true value of a cryptokitty.
But no worries! The genius me thought of a genius way to find our the true worth of my cryptokitty before i buy it. I will still but it regardless of the price! Yesterday, i saw Ciqala Bluemumu, a devilish looking cryptokitty that caught my eyes was on sale! So i decided to use this is the example for my price estimation experiment.
This is the cutie that i want to get because he looks like a fallen angel cryptokitty. He’s so cute with the little red devil horns and tiny wings. The price was quoted as 0.003 ETH, that is about $0.40 at the tim’ of this article, but i have no idea whether he is underprice or overpriced. That is why i did a small experiment to estimate the true value of Ciqala.
There are a few items i would be looking to justify its price:
- Kitty Type
- Family Jewels & Cattributes
At the moment, there are only 5 types of cryptokitties: Normal, Fancy, Exclusive, Special Edition, Anomaly. In this article we will only be discussing about Normal cryptokitties. This is because for the unique ones, they do not normally have a floor price or ceiling price because these are extremely unique collectibles with very limited quantity, therefore their prices would be very dependent on the few high value collectible buyers.
Although Ciqala looks unique with the angel looking wings and devil looking horn, it is still just a Normal type cryptokitty. Majority of the cryptokitties are Normal type, so lets take a look at the Generation of Ciqala instead.
Ciqala is a Gen 6 cryptokitty. What i did next was head to kittyexplorer.com and search for the list of Gen 6 Normal kitties that were sold in the last one week (5th Mar, 2019 to 12th Mar, 2019). There were a total of 172 transactions, the most expensive one was sold for 1 ETH and the cheapest being sold for 0.00114 ETH.
There are multiple of calculation methods to define what is the true value of an asset like cryptokitties. I decided to use Mean Absolute Deviation (M.A.D) because this is the easiest way to take a quick look on the relevant prices. I have also included another MAD value that excludes a few outlier transactions where the kitties were sold for four times the average selling price.
Using M.A.D and a sample of 172 transactions of Generation 6 Normal type cryptokitties, the true value is 0.33 ETH before excluding the outliers. By excluding the outlier transactions, the MAD estimates a value of 0.0219 ETH. Comparing the auction price of 0.003 ETH against the M.A.D price estimation, Ciqala appears to be super undervalued!
Check out the worksheet calculation here.
The cooldown for Ciqala is still at the stage of snappy, means he can still breed and make babies every 10 minutes, which is relatively quick for baby makings. If i do not let it breed after adopting it, this should increase the value of Ciqala over time, since there would be fewer early generation cryptokitties that are still relatively virgin.
I did not do any price modelling for this criteria because there is insufficient data to prove the correlation between the cooldown state and cryptokitties selling price.
Family Jewels and Cattributes
Cattributes by itself does not hold much value in my opinion, but what makes it valuable are the family jewels that is associated with it. These jewels are not being valued as much at the moment because there are still many new ones successfully being breed everyday. Once there are no longer new jewels being produced, cryptokitties that are holding these jewels will spike in value. Ciqala does have one Amethyst jewel for its mekong fur and two Lapis jewels for its satiated mouth and flapflap wild element.
I would expect the value to be 1 ETH for each Diamond jewels, 0.7 ETH for each Gilded jewels, 0.5 ETH for each Amethyst jewels, and 0.2 ETH for each Lapis jewels within the next 9 months. Based on these jewels valuation, i predict that Ciqala should worth at least 0.9 ETH.
Is 0.03 ETH worth it for Ciqala Bluemumu?
Yes! There is no other way to say this but if i have enough ETH, i will buy all the Generation 0 to Generation 9 cryptokitties! Simply because these are single digit generation cryptokitties that holds most of the family jewels and are sure to be super rare as more cryptokitties are being breed over time.