Choosing Real Estate and Business Models in Prospectors + Bonus Tip Included
Note: None of the information provided in this article is to be taken as financial advice. Prospectors has free-market economics and prices are affected by demand and supply in-game. They are subject to change at any given point of time. Changes are subject to game upgrades made by developers or if voted on by the State.
Virtual real estate is definitely an intriguing concept with blockchains and Prospectors provides a thrilling case for an open and free-market economy.
In a game like Prospectors, purchasing land comes with a lot of benefits but also comes with consequences. So if you’re a landowner, rent needs to be paid regularly which goes to the state.
It is always recommended to purchase resource-rich land when choosing among options. So, if you have a business which is failing, you’d want to turn to your resource-rich land through which you can extract resources to make enough to pay for rent. Since you’re investing in real estate and you have to pay for rent, you have to look at your ROI.
Unfortunately, at this time in the game and at the time of writing this article, all the resource-rich plots have been bought. You’ll be able to purchase average plots with decent resources, but you’re better off with at least 1 resource which has a high amount due to the mining difficulty directly affected by the quantity of that resource. If you’re lucky, you can rent a plot which was confiscated previously or you’d have to wait a couple of months for new land to be unlocked.
There are 2 ways resources can be extracted. One way is you purchase a plot of land, and you yourself extract the resources from the plot. Your other expenses will include recurring purchases of tools and maybe some transportation. You’re ROI in this situation needs to cover the purchase of the land, the tools, transportation, and taxes.
The 2nd way you can extract resources is by constructing buildings which help speed resource extraction. These buildings include gold mines, coal mines, ore and clay quarries. With the help of these buildings, you’ll be able to mine resources much faster as well as have the ability to hire workers in order to mine even more in quantity. Keep in mind that buildings which help extract resources faster need that resource to be located on that plot. If you construct a gold mine on a plot with no gold on it, you’ve just wasted a lot of gold and time and that could cost you dearly. Your expenses would include the land rent, the resources needed to construct the building, hiring workers to complete the construction of the building and tax.
Starting a business requires a building. If we have a look at the image above, the plot owner has one of the highest gold plots in the game but he/she has constructed a stone workshop instead where stone blocks and stone plates are manufactured and sold. If you do have the capital at your disposal it does give you better flexibility. You’re able to construct a building, run business operations, and mine resources at the same time or you can even put out a job for a single worker to mine on that gold plot. Your expenses involved would be the rent, resources required for the construction of the building, salaries paid to workers for working on your plot and taxes.
So, how much PGL would you need to start a business?
Considering the current price of rent is 180,000 gold at the time of writing this article and the other expenses required like materials, resources for constructing buildings, salary for hiring workers and tools, you would need about 600,000–1,000,000 gold approximately for setting up shop. Obviously, this number is subject to change due to the free market laws as well as the supply, demand, and scarcity for resources.
When it comes to the current state of resources in the game, which should also be taken into consideration with regards to your business model, gold hasn’t really lived up to its scarcity features. A Lot of plot owners are stocking up on gold deposits and constructing other buildings and running other businesses instead. Unless you’re mining gold on unowned plots, there isn’t a difficulty of mining gold at the moment.
Wood and stone are 2 resources that have an abundant supply but low demand. They’re the only 2 resources that don’t have a mining difficulty so no matter what the supply is in a deposit, you’ll be mining the same amount every time.
Another factor to take into consideration is the utility of each resource in-game. Apart from selling it directly on the market, what other use cases does it have?
Stone is limited to creating 2 materials which are stone blocks and plates which are only used in the construction of buildings.
Wood is used to create materials which are then used to create tools, buildings, and transportation. The reason why it's not scarce is that its demand is much lower compared to other resources in spite of its utility is because of the quantity required in production is lower in some aspects compared to the 3 other minerals.
Coal, clay, and ore are used to make tools. Coal is also used to make a wide number of materials which are used to make buildings and transportation. So these 3 minerals have the most utility in the game which results in a higher demand for these resources.
The bonus tip which I wanted to share with you all is that at the time of writing this article, the scarcest resource in clay. When compared to other resource deposits, clay has the lowest quantity in the entire game. This combined with a high demand for it because of its utility will maybe result in an exponential increase in the price in the near future. I also predict that coal is set to follow clay to become scarce followed by ore.
Clay is set to become even more scarce than gold. It's assumed that this would only be temporary as the market dynamics would reset once new land gets unlocked in the game which would probably be a couple of months later.
With that being said it’s amazing to know that Prospectors is the most used dapp in the entire crypto space according to data provided by DappRadar. This has been an unbelievable start for a dapp project in this space. The complexities and intricacies of the game with its own game physics and free-market make it a highly competitive and scalable game. All that the game needs now is more adoption and EOS 1.8 with an easy onboarding process for users is not that far away. The future looks bright for Prospectors.
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DISCLAIMER: This is not to be taken as financial advice. My views in this article are personal opinions based on my research and should not be considered as financial advice. Always do your own research.