The Kentucky Derby may be the best-known stakes race happening in the equestrian world this weekend, but it’s hardly the only one.

On Zed Run, a digital horse racing platform, several such events take place every hour, seven days a week. Owners pay modest entry fees — usually between $2 and $15 — to run their steeds against others for prize money.

The horses in these online races are NFTs, or “nonfungible tokens,” meaning they exist only as digital assets. You can’t pet them or feed them carrots by hand. You can’t sit in the stands sipping mint juleps while they sprint by.

But, unlike the vast majority of NFTs — which correspond to GIFs, images and videos that can be kept as collectibles or sold for profit — each digital horse constitutes what Zed Run’s creators call a “breathing NFT.”

“A breathing NFT is one that has its own unique DNA,” said Roman Tirone, the head of partnerships at Virtually Human, the Australian studio that created Zed Run. “It can breed, has a bloodline, has a life of its own. It races, it has genes it passes on, and it lives on an algorithm so no two horses are the same.” (Yes, owners can breed their NFT horses in Zed Run’s “stud farm.”)

People — most of them crypto enthusiasts — are rushing to snap up the digital horses, which arrive on Zed Run’s site as limited-edition drops; some of them have fetched higher sums than living steeds. One player sold a stable full of digital racehorses for $252,000. Another got $125,000 for a single racehorse. So far, more than 11,000 digital horses have been sold on the platform.

Alex Taub, a tech start-up founder in Miami, has purchased 48 of them. “Most NFTs, you buy them and sell them, and that’s how you make money,” Mr. Taub, 33, said. “With Zed, you can earn money on your NFT by racing or breeding.”

His stable is still growing. He recently bred a digital horse for his 5-year-old daughter. “She comes home from school and wants to race it,” he said. “She named her horse Gemstone, and Gemstone had two babies named Rainbows and Sparkles.”

Each race has a 12-horse limit, the lineups of which are based on the qualities and past performance of each horse. The site uses an algorithm that runs 10,000 random outcomes and chooses one as the race’s condition.

The races take place around the clock and are streamed on both Zed Run’s Twitch channel and the company’s website. Zed Run also operates a Discord server, where people can follow race results, trade tips and share third-party tools for analyzing data. Users livestream their own races and repackage clips for YouTube and Twitch.

“There are people who are becoming mini influencers in this ecosystem themselves,” said Yair Altmark, a venture capitalist in New York who has spent over $300,000 on digital horses. “And horses that are getting credibility on these streams and exposure on the Discord are making a name for themselves.”

He anticipates making much of his money back. “It wouldn’t surprise me if some of these horses are trading for $1 million in a couple months,” Mr. Altmark, 23, said, “because these horses can generate a crazy return on your investment.” It costs anywhere from a few dollars to around $50 to enter a buy-in race, and you can race a horse an unlimited number of times.

Zed Run was founded in 2018 by Chris Laurent, Rob Salha, Geoff Wellman and Chris Ebeling. They felt that horse racing was fertile ground for innovation. “It’s one of the world’s oldest sports, and it has remained unchanged since the dawn of time,” Mr. Laurent said.

Owning and racing real horses can be prohibitively expensive. But there is a lower barrier to entry for NFT horse racing, according to Drew Austin Greenfeld, 36, an investor in New York. “There are cheap horses and premium horses,” he said.

Renee Russo, a 25-year-old entrepreneur in New York, said that racing her digital horse, Glacial Planes, feels more like playing a video game than taking a gamble. “I own this horse, I’m not betting on another horse,” she said, “so I feel like I have complete control of where it’s going, who it’s racing and who I want to breed it with.”

As with all investments, there is reason for caution here. Should Zed Run turn out to be a fad, these digital horses could be rendered worthless.

Fans of digital horse racing often talk about the “metaverse,” a shared space where physical and virtual reality meet. “My opinion is that Zed Run will be the first digital sport of the metaverse,” said Mr. Greenfeld. “People are going to root for horses and stables, and become fans. There are horses that are already celebrities in the ecosystem. It’s global, there’s no language barriers and it’s 24/7. It takes the best of crypto, NFTs, esports, streaming.”

In any case, as the NFT craze grows and more people discover digital horse racing, Zed Run is expanding rapidly. The company has 30 employees around the world and plans to keep hiring. Recently, celebrities and athletes have begun investing in the space. The actor Jerry Ferrara, who played Turtle in the HBO series “Entourage,” has purchased a digital horse, as did Wilson Chandler, a professional basketball player.

Some users said that Zed Run has also piqued their interest in the real-world spectator sport. “I would have never watched an actual horse race on YouTube before, but I’ve watched five now because of the idea of just familiarizing myself with how actual horse racing works,” Mr. Altmark said.

Mr. Taub, for his part, is going all in on digital races. He plans to purchase more horses in the next Zed Run drop to build out his stable.

“This is either going to be the smartest or stupidest thing I’ve ever done,” he said. “I’ll either buy a house with the money I make from it or never show my face for a year.”