<CSGO Jewelry Review>by Sichuan Pepper No.18 CsgoSkinEconomy, thank you for liking and one click triple connection. Goodbye CSGO is an old game that has existed for more than 10 years and is also a cash cow that supports V Society with hundreds of millions of dollars every year. I have always been curious why CS2 skin economy has not collapsed. I have researched a lot of information and asked many experts @ 0xLonely God @ 0xAgata. This article cannot be considered as investment research, it is all pieced together information for self sorting Disclaimer: I am not a professional gamer and am currently learning many skills. If you ask me to give examples of various skills, I will definitely not be able to do so. However, my goal is to learn to review and reflect on the economic system involved, and solving the problem is my goal TLDR 1. Supply side: Open box probability gradient (golden 0.26%)+Alchemy system regulates underlying liquidity (combustion and destruction mechanism)=>Pyramid shaped supply structure 2. Demand side: identity recognition (functional demand)+financialization speculation (leasing/investment/gambling) → wear and tear uniqueness (NFT) to drive scarcity premium 3. Value anchoring: unboxing cost game (key+box)+market consensus (community heat+event effect) 4. Continuous increase: The anchor ecosystem and the speculative group of college students form a closed loop of market drainage (college students are the closed loop!) 5. Core core: Steam can only recharge and cannot withdraw+transaction fees, which has spawned many third-party trading platforms, cross platform/regional arbitrage "picking up loopholes"+users' self ambiguous cross platform price positioning //Low market value accessories are like earth dogs, while high market value accessories are more like VC coins (artificially promoted) ————— The supply of CSGO accessories is entirely driven by probability, with a probability gradient for unboxing: gold accessories (0.26%), red accessories (0.64%), pink accessories (3.2%), purple accessories (15.98%), and blue accessories (79.92%) form a pyramid shaped supply structure. This is actually very common in games, and the rarer the equipment skin, the lower the probability of obtaining it. There are two ways to obtain boxes: 1) by randomly retrieving them through playing games, and 2) by buying them in the market This actually constitutes the first sustained attention chain, playing games ->opening boxes ->obtaining equipment ->selling money. If you don't want to spend money to buy keys, then you can frantically save boxes to sell If too many boxes are dropped, it will lead to a continuous decrease in the price of this box, and the price of the accessories it contains will also decrease with the increase of quantity. When supply exceeds demand and there is a downward trend in product prices, the buyer is in a favorable position in the market trend in the transaction The demand curve remains unchanged while the supply increases. After a period of time, as the number of boxes continues to accumulate, these boxes will become "worthless". At this time, game companies will follow suit and launch new boxes to maintain market activity To obtain the box, you must have a key, and the prices of both the key and the box are fluctuating and can range from a few to several hundred dollars. Based on data from 2014, the cost of opening a single box is about 27 yuan (17 yuan for the key+10 yuan for the box), and the expected cost of obtaining gold jewelry is about 10400 yuan. Of course, the price is definitely higher than this now There is actually another consensus here, which is more in line with my puzzle solving logic for Sichuan pepper hook： Play games or earn money Behavior mode: Play games ->Get sustained attention ->Main storyline drops boxes Control rate: Different boxes with different accessories ->High priced and valuable jewelry ->Price of boxes with the same attribute 📈 -> Matching key prices 📈 -> Attracting more people to play ->If the product rate is poor ->Shaping the product rate and equivalent price of other boxes=>Maintaining high-end jewelry to create a moat The alchemy system in CSGO forces the consumption of low-level accessories (such as 10 pieces of blue combined with 1 piece of purple), destroying over 500000 pieces of underlying inventory daily, effectively alleviating the pressure of oversupply. Low end accessories are collectively referred to as mid to high end accessories, with value aggregation (similar to ETH and layer2?) According to data, after the launch of the "Lengcai 2" weapon box in 2024, the price of the blue skinned "Desert City" rose by 30% (3 yuan → 8 yuan) due to the demand for alchemy, verifying the so-called "pump effect" In addition to alchemy, the uniqueness of item wear and tear further strengthens the value stratification. The price of the brand new factory (0.00 wear and tear) Dragon Sniper can reach more than 10 times that of the battle scarred models, and the premium rate of special template IDs (such as all sapphire claw knives) can even reach 500%. Those who have played NFT must be familiar with this mode. Different traits have different prices, and rarity=wear and tear The FOMO effect driven by events has become a price fluctuation amplifier. During the PGL Major in 2025, the NAVI team stickers won the championship with player s1mple, causing a 300% price surge in three days and a transaction volume of over 500000 transactions. The same logic actually happened in League of Legends. I still remember that the factory director's award-winning blind monk skin in 2020 sold for thousands of yuan each, and they had to go to a certain treasure to get it Whoever gets a hand in the process of passing on the money earns another, holding it for a while and earning it for a while. As long as the drum stops, make sure the money is not in your hands, making money is a convenient thing. But now there is a jewelry rental, which means that whether the market can eat so many accessories is no longer so important The Butterfly Knife earns an average of 193 yuan per month for renting for 27 days, with an annualized return rate of 36%. It has completely outperformed the ETH staking return rate and is more than enough. The rental business has benefited the mid to high end jewelry, forcing more low-end junk jewelry to be artificially refined and lost. Of course, this does not include unilateral default and direct withdrawal due to jewelry price increases. In this chain, the anchor is the downstream. For example, the Bilibili UP host "Ouhuang Team" manipulated the price of the "fuel injector" skin through a 30000 member community, which rose from 1400 yuan to 2500 yuan. The college student group (accounting for 62% of active users on the trading platform) became the main buying force, with an average daily trading frequency of 3.7 times significantly higher than other age groups. Of course, they are also the group that was cut off —————— In the more than ten years of CSGO, the collapse in 2021 caused many people to suffer losses, so why can it come back? Because there were consecutive months of curfew in 2023, the meaning of curfew was that after 7 or 8 pm, you could put up accessories, but you couldn't ship them until the next morning. This situation caused accessories to stretch without cost, so the entire market exploded from March to April 2023, especially weapon boxes. Basically, all weapon boxes doubled What is a weapon box? It's a bargaining chip for the Mao Zedong Party, whether it's cash out or betting, it's a seesaw to gain sustained attention So the mismatch of liquidity and hard sedimentation in V company's hands is the reason why the book price of low liquidity "NFTs" has increased Of course, where do you know so much about chives and bricklaying? Isn't this idle Generally speaking, the combination of community, front end, and perspective has become what we call a "hype" target. Isn't it similar to memecoin? Let's review together how to make stir fried jewelry Four step harvesting method: 1. Early morning low price orders to attract funds (deviating from market price by 10% -15%) 2. Spread insider information in the community to drive up prices 3. High priced distribution during the event Sell off old skins before version updates (keep the most liquid skins and stickers) The method of hype is similar to hanging orders with inscriptions, with community distribution information and large live KOL positive news as the main focus, supplemented by community promotion venues Of course, I have not experienced so many years of brick laying and arbitrage. All of it is a summary of paper-based information. What I want to express is that it is constantly changing and cannot be separated from it. I would like to summarize some of the current operating techniques of CSGO 1. Hard liquidity lock, distribution reserved for community+events, transaction matching reserved for third-party platforms, including gambling/lending derived from transactions 2. Randomly drop boxes ->Provide game attention ->Arbitrage brick moving party/cross regional arbitrage ->Batch box market quantity mismatch ->Centralized adjustment to control product rate 3. Low batch boxes ->Refining to medium to high grade ->Maintaining a high-value moat ->Reverse pushing the key+value of the box itself ->Empathy anchoring 4. Rental market ->Promote the "usage rate" of high-end accessories ->Create a brand moat ->Focus on improving the liquidity of centralized heating ->Veblen effect —————— Attention: Why can CSGO survive? I think maintaining the arbitrage market is also the smart aspect of V company, as there are several arbitrage opportunities here 1. Do not create your own trading platform, but connect multiple third-party platforms for bidding. Each platform has a price difference and can be used for arbitrage (providing liquidity) to support V society and third-party platforms. Cross platform arbitrage is the simplest way 2. The second one is (short selling). Assuming that we know in advance that the next version A1 will be weakened, we borrow a brand new A4 jewelry with a market price of 1400 yuan from a rental platform at a cost of 42 yuan (1.4 yuan/day x 30 days). Taking advantage of the market frenzy caused by the news of A1 weakening, we sell it on Steam for 1700 yuan (after deducting the handling fee, we actually get 1275 yuan). After waiting for the market sentiment to subside, the expected price drops to 1000 yuan, and then buy it back and redeem it, making a huge profit of 233 yuan. {Of course, besides short selling, you can also go long} 3. Exchange rate arbitrage, taking advantage of pricing loopholes in Steam regions, recharging balance through low-priced regions such as Russia/Arabia (such as buying US dollars at a 60% discount), purchasing skins and reselling them to high priced regions, or selling them out on the market 4. High frequency scripts take low-priced orders and sell at high prices for arbitrage I still want to write some xxx, but I feel like I'm still running it. For the sake of the industry and the park, I won't say anything for now:)