A highlight of LeBron James sold for $ 200,000. A Zion Williamson edition cost a little less than that. The National Basketball Association has officially aligned itself with the future of the collectible card market, and currently that game is out of print.
The NBA has partnered with a Canadian company Dapper Laboratories, creators of CryptoKitties game, to make his version of a collectible digital asset. NBA Top Shot is a crypto-collectable consumers can buy as non-fungible token (NFT). Each collectible is linked to a blockchain – a digital ledger similar to blockchains used for digital currencies like bitcoin. This effectively gives each NFT a unique, non-hackable Certificate of Authenticity. So even if someone makes a perfect copy of the highlights video, it will be instantly recognizable as a fake.
Current “packs” to enter the game are as low as $ 9.00 – and they are constantly exhausted.
Caty Tedman, head of marketing and team partnerships at Dapper Labs, says Top Shots has generated over $ 230 million in sales so far, although most of those sales come from merchants trading the collectibles. after their initial sale. Dapper generates revenue through fees captured by peer-to-peer transactions and by releasing new NFT packs.
“I think it’s fascinating,” said Tom richardson, Professor of Digital Media in the Sports Management Program at Columbia University.
“It’s a nice development and it’s good to see that people are still making collectibles, even during this time,” added Lars Rensing, CEO of the blockchain service provider. Protokol. “It’s a new step into the future.”
Gambling has also become a new source of income for the NBA. And again, it’s sold out.
Top Shots arose out of a licensing deal between the NBA and its players union with Dapper Labs in 2019. The NBA did not make an official available to comment on this story, but Richardson, who was once responsible for the publication. to the National Football League, says the league can solicit 10 to 15% of sales from a company that exploits its intellectual property.
The NBA licenses the reels to Dapper Laps, who scans the images, making them a limited quantity to create a rarity. Some NFTs feature highlights from different angles and digital artwork. One is currently listed for over $ 240,000.
Dallas Mavericks owner Mark Cuban compared Top Shot to the old-fashioned model of collectible cards, where consumers can have fun redeeming and collecting rare items – without the risk of damage or theft. “And the value is always fixed by the same laws of supply and demand”, he wrote in January.
“Leave it to Mark Cuban to frame it in a way that is thoughtful, sensible and easy to understand,” said Richardson, also vice president of strategy at Mercury Intermedia. “So if enough people wanted that same Zion Williamson highlight, that NFT, and bidding on it, they got up to $ 100,000, that’s supply and demand. Someone thought it was worth $ 100. 000 dollars. “
The bet for traders is that in 2051 a LeBron James NFT could be worth what a 1952 Topps Mickey Mantle the card is worth today – one of those rare cards recently sold for $ 5.2 million. And imagine how well NFT would sell in 30 years.
“We think it could be a 100-year-old product,” said Tedman of Dapper Labs. “If you think about what the rookie cards of today are going to be worth in the future, especially those at this point in the product. Everyone who participates now really goes downstairs.”
Using blockchain, says Richardson, Dapper overcomes a big challenge with digital assets, which is the ease of copying them endlessly without almost any friction.
“One of the things that defined the digital age is that we have moved from a world of scarcity to a world of plenty with all kinds of media assets and products,” he added. “But what defines the collectible card business is the physical rarity of the cards. So (Dapper) created these NFTs with the idea of rarity combined with authenticity because of how blockchain works.”
With this asset, Dapper is positioned to capitalize on a digitally driven generation that values both digital and physical assets.
“The new generation is more digital native,” said Rensing. “I think it will stay because it’s a solution that also attracts new fans and digital natives.”
Earlier this month, Dapper raised $ 250 million and is now valued at $ 2 billion in part thanks to Top Shot’s sudden popularity, according to digital asset research and media. The block.
With the funds, Dapper will cotininer by expanding its blockchain, Sink. Tedman, one of the creators of Top Shot, said he now has around 350,000 registered users and said Flow can better handle the capacity of a high-value market, which is causing problems. with its CryptoKitties product.
“It allows us to reach a scale that other blockchain projects don’t yet have,” Tedman said. She said that of the $ 230 million generated so far in sales, 95% of that amount has been captured by consumers in her market who buy, sell and trade.
She said the company released 5,000 new highlight packs this week as a stress test for Flow, and 90,000 people lined up to buy. The packs quickly ran out.
“They come in, collect, put together what they think are good collections, buy and sell,” Tedman said. “It’s almost like you are stocking collectible cards with the stock market. It’s a game in and of itself, before we released the mobile game.”
This mobile game, which is slated to roll out this year, will allow consumers to build NBA-like rosters by acquiring NFT moments, then compete in online tournaments – and possibly earn rarer NFTs that can increase in value.
“This can be your chance to have fun with your interest and love for a sport – in this case basketball – combined with your interest in new technological and financial experiments such as cryptocurrency and NFT, ”Richardson said.
Saum Noursalehi is the CEO of the software company tZERO, a business that symbolizes the assets of private or public companies and builds the platform that allows the assets to trade. He sees a bright future with sports leagues using NFT licensing deals and suggests it’s a model for how blockchain technology could be used to track and trade other types of assets.
Blockchain technology “is going to change the way we trade in value today, the way we trade in assets,” Noursalehi said.
Tedman added, “We’re just getting started. We have a lot of great projects that we can’t wait to present to people.”
Let the new games begin, as the the digital age continues to take shape. But Dapper’s NBA Top Shot Contest entry is currently sold out.