CAN THE NBA BRING NFTS TO THE MAINSTREAM?
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.