CAN THE NBA BRING NFTS TO THE MAINSTREAM?
- Author Miriam Lynn Mcgovern
- Published May 28, 2021
- Word count 967
The NFT scene has found an unlikely partner in its fight to gain mainstream acceptance - in the form of NBA Top Shot Moments
So I just copped a sick T.J. McConnell NBA Top Shot Moment, where he drives down the baseline for a sweet no-look pass behind his head to a wide-open Myles Turner for an uncontested dunk.
I was instantly transported to the days when Beckett magazines were still a thing. When these magazines and their ilk served as a price list for NBA trading cards in a fully analog world. A world some of us never got to enjoy. But I digress. At that moment, it was like reliving the childhood I never had. I've had my share of NBA trading cards, but none of them have ever been as fascinating (if not as "rare" in the physical sense) as this one.
And with this concept, the NBA is bringing NFTs to the mainstream.
NBA Top Shot: changing the digital collectible space
NBA Top Shot is an online virtual basketball card trading platform where fans can buy and sell virtual basketball cards that are essentially video clips digitized into "moments" on the blockchain - on an exclusively digital, 3D cube available nowhere else, rather than a rectangular piece of cardboard. While it certainly isn't the first tie-up between a sports association and a blockchain tech company, the NBA dwarfs the rest of the competition in size.
NFTs are permanent tokens existing on the blockchain, minted exclusively for one asset - no other "originals" can exist. These assets could be an mp3, a piece of digital art, a lease contract, a tweet, or a status update....
NFTs are already buzzing on mainstream media and gathering momentum. For instance, the NBA Top Shot Cosmic Series 1 Legendary LeBron James NFT featuring him posterizing Sacramento forward Nemanja Bjelica went for a cool $208,000. And it's just one of 49 existing copies on the blockchain. In contrast, the one I bought was one out of 15,000.
Okay, I get it. I've heard all sorts of arguments raised about NFTs. Yes, you'll probably find a clip of this for free on YouTube. Yes, you'll probably see it on some spliced-up highlight reel set to bad lo-fi hip hop music and watch it to your heart's content.
Here's the thing: those videos of the same highlights aren't technically yours, as far as ownership is concerned.
On the other hand, NFTs guarantee that there is only but one original copy for a particular digital asset - and the blockchain is what everybody accepts as the proof positive of your ownership of the said asset.
And this unique value on the blockchain guarantees value where it may not have been previously perceived, thanks to scarcity.
NBA Top Shot was borne out of a partnership between the NBA, its Players' Association, and the Vancouver-based blockchain tech company Dapper Labs.
How it works
Dapper Labs takes recent highlight films from the NBA, which are then processed into clips and minted on-chain as Non-Fungible Tokens. Each clip with its own unique identity recorded in the blockchain. The company decides how many editions each Moment - or NFT - to mint, creating more scarcity in other Moments than others (such as the LeBron dunk we mentioned earlier).
NBA Top Shot is probably one of the earliest cases for NFTs going fully mainstream, after all, US$500 million in sales can't be wrong.
The NFT arrangement works for all partners. Revenues are generated from pack releases and transaction costs, particularly a 5% fee on all transactions conducted on the Marketplace (borne by the seller).
On the other hand, the NBA and the Players’ Association receive a portion of Marketplace transactions. Dapper Labs also charges a fee to pay for bank transfer costs whenever users withdraw from Dapper to their bank of choice.
Keys to success
Top Shot has succeeded in taking NFTs to a much broader audience due to the following aspects:
● It’s a user-friendly and intuitive platform.
● The NBA's massive popularity.
● Its proximity to trading cards as a hobby.
There isn't anything cumbersome with how Top Shot presents its platform. It's as simple as it gets. That is where its success lies: at the end of the day, only two concepts matter—loving the game of basketball and understanding the concept of scarcity.
Most Top Shot users won't ever have to work directly with the blockchain or know about its inner workings. In fact, there's almost no mention of the term on the Marketplace. Top Shot wasn't created for the crypto-savvy or even for those with a basic working knowledge of its concepts. Rather, Dapper Labs created Top Shot with a view on people who might be intimidated about getting into NFTs - and crypto - for the very first time.
You can cop these NFTs directly from NBA Top Shot as limited-edition drops selling anywhere from $9 to $999 apiece depending on the rarity and availability. You can also buy from the marketplace, where individual moments from the said packs can be bought and sold between holders for cash.
The future looks bullish for Top Shot. Dapper Labs recently announced that it raised $357 million in its last funding round, hauling in massive investments from Philippe Lafont-led Coatue, apart from a handful of current and former pro athletes celebrities like Kevin Durant, Klay Thompson, and Shawn Mendes.
If there's anything that recent developments in technology like social media and cryptocurrencies have taught us, being an early adopter pays well. If things continue to go well for Top Shot, we could finally see NFTs breaking on through to the mainstream audience in a massive way. The NBA just might be onto something, after all - and Top Shot might just be the blueprint other brands or sports might follow. Time will tell.
Representing DigitalAX in selling digital fashion items as NFTs. DigitalAX.xyzArticle source: https://articlebiz.com
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