What is NBA Top Shot? A Booming Blockchain-based Market of NFTs
NBA NFTs are one of the most active intersections between the cryptocurrency digital asset and collectible ecosystems, and the closest NFTs have come to the mainstream (so far.)
Created by Dapper Labs, the NFT token standard makes the act of collecting, storing, and trading digital assets a much more seamless and safe process than with physical collectible items. In lieu of a physical trading card, NBA NFTs are moments represented by a single Non-Fungible Token.
In October 2020, Dapper Labs unveiled its NBA Top Shot collectibles app. In just five months, NBA Top Shot boasts total sales of over $123 million, with nearly $60 million from upwards of 67,000 users coming in the third week of February 2021.
Perhaps more indicative of the collectible industry’s fingerprints on the NFT digital asset collectible space, just $6 million was generated from direct purchases of digital NBA collectibles from Top Shot– the remainder was traded on the secondary marketplace.
What is Dapper Labs?
Dapper Labs is a blockchain startup dedicated to building out the digital collectible ecosystem. If you’ve been active in cryptocurrency for a while, the name Dapper Labs may ring a bell– the team brought us the viral CryptoKitties in 2017. Our team reported a CryptoKitty auctioned for $140,000 in-person in 2018, and the reception to the event was largely incredulous.
Since then, Dapper Labs has built partnerships that would potentially give the NFT ecosystem life and legitimacy beyond fat cats buying digital cats in a bullish cryptocurrency ecosystem.
It’s worth noting that Dapper Labs uses the Flow blockchain rather than Ethereum, citing Ethereum’s scalability issues as the primary obstacle to building NBA Top Shot the platform.
The Dapper Labs NBA partnership was announced in 2019, setting the foundation for NBA Top Shot’s success in 2021.
“Dapper Labs’ innovation and expertise make them a perfect partner to introduce this groundbreaking game and what we believe will become coveted digital collectibles for basketball fans around the world,” noted NBA Senior Director, Consumer Products & Gaming Partnerships Adrienne O’Keeffe in the press release.
Dapper Labs has currently raised $52.5M in equity and finance from the likes of Andreessen Horowitz, Union Square Ventures, Venrock, GV (formally known as Google Ventures), as well as the founders of Reddit, Dreamworks, Coinbase, Zynga, and AngelList. Further, it counts NBA players Andre Iguodala and Spencer Dinwiddie on its list of investors.
Dapper Labs recently announced it will be raising $250 million in a new funding round led by Coatue Management.
How Do NBA NFTs Work?
The Dapper Labs and NBA Top Shot teams have paid a meticulous amount of detail to translate the in-person sports card collector experience into the digital world.
User must create an account on NBA Top Shot, which serves as both the initial purchase point and secondary market portal for trading NBA NFTs.
Once the onboarding formalities are done, users can select their favorite NBA team, which will populate their home page with NBA NFTs of players and memorable moments. The NFTs themselves are short video moments of the event, such as a Russel Westbrook slam dunk or a Lebron James 3-pointer.
NBA Top Shot provides several different “packs” on sale for around $9.00 to $14.00. Similar to physical trading card packs, users don’t know what moments are in each pack before it is opened.
In our experience, every single pack was sold out.
Each moment is essentially a Non-Fungible Token (NFT). Each token is completely unique to a specific moment, hence the non-fungibility. This token helps prove provenance and ownership of each moment, making it a collectible item without the risk of counterfeit or fraud. Transferring the asset can be done nearly instantly without the encumberments that come from trading physical memorabilia.
Since the packs might be sold out if you check out NBA Top Shot yourself, wander over to the Marketplace section to get an idea of the secondary marketplace.
For example, this 3-Pointer of a 3-pointer by Jimmy Butler is being sold for anywhere between $39,995.00 to $250,000– with the highest price going towards serial number #22, which is Butler’s jersey number.
Since it is a secondary marketplace of novel goods, the owners of the NFTs are setting current prices. In theory, the lower the serial number, the more valuable the NFT should be (with the jersey number being an exception.)
The secondary marketplace is a source for mixed feelings and speculation.
“I’m personally not a fan of the marketplace because many of the items are overvalued due to the hype around Top Shot right now,” says Swish Goswami, the CEO of Trufan, an audience engagement platform for brandings utilizing first and third party data. “I’m waiting to buy a pack, but they sell out so quickly! Hopefully, Top Shot will allow user-generated NFTs one day– imagine being able to buy a courtside view of Anthony Edwards’s dunk on Yuti versus a Row B view.”
The Best and Highest NBA Top Shot NFT Sales
NFTs are valuable for a variety of reasons: easily verifiable, traces back to one original issuer, and therefore not replicable.
“I like to think of NFTs as concert tickets: you get one with your name and the event name/date,” says Swish. “It’s very hard for someone else to replicate your ticket. When something can’t be replicated easily, it is scarce. If it’s a scarce asset, whether physical or digital, it’s inherently valuable. Purchasing NFTs is similar to the mindset of an art collector– you buy it because it makes you feel special, elevates your status or can be resold later.”
Jesse Schwarz purchased a Lebron James Lakers Highlight Moment for $208,000. This purchase is particularly notable as it’s from the Cosmic Series 1 and from the first legendary set ever minted.
— Jesse Schwarz (@YoDough) February 22, 2021
“I’m a HUGE Lebon fan,” said Jesse in comments to CoinCentral. “I knew he was the GOAT since he came into the league, and I feel that he is still underrated. He’s also undervalued on Top Shot relative to how legendary he is. I’ve been on the NBA Top Shot platform since August 2020, and I’ve seen the daily volume increase by 5000x. Buying the Lebron Moment felt like a steal. I think it’s worth upwards of seven figures right now.”
LeBron James has over 8 top-selling NFT moments: “From the Top” Block: $100,000
“Holo MMXX” Dunk: $99,99, “From the Top” Block: $78,000, “From the Top” Dunk: $71,455, “From the Top” Dunk: $50,000, “Cosmic” Dunk: $49,000, “From the Top” Dunk: $48,500
Zion Williamson’s “Holo MMXX” Block sold for $100,000.
Anthony Davis made the list with his “Deck the Hoops” Dunk going for $55,000.
Why are NFTs valuable? What’s stopping someone from just saving the image?
The true value of an NFT is in its unique attributes that can only exist in the digital world: faultless and trustless proof of ownership.
The token standard means that only one version, or one serial number, of a particular NFT can exist. For example, if an NFT creator only reasons 10 versions of an NFT, an 11th one cannot be created or counterfeited by the market.
If someone were to just save an NFT, they would have a copy of it but not true ownership. Being the sole owner of an authentic collectible asset is what makes an item worth something. For example, a 1st Edition pristine 10 Charizard trading card sold for $369,000. If it were an exact copy, but without provenance or proof of authenticity, it would be worth closer to the cardboard/paper material on which it was printed.
“I like the Mona Lisa example for NFTs,” says Chris Hall, CEO of Hall Media and NBA NFT owner. “People can take pictures of the painting and share it wherever, but that just makes the original more valuable. The bigger or louder the meme or moment, the more valuable it becomes. So, for example, the craziest dunks will always be really cool and share-worthy, which will make them more valuable in the future.”
So, the argument is that the NFT proves original ownership of the image, whereas every copy created will only drive attention to that scarce product.
Are NBA Top Shot Moments Legit?
What’s stopping anyone from just creating their own NBA moment and putting it on market? Well, since the NBA Top Shot project is a partnership between Dapper Labs and the NBA, it has a stamp of authenticity impossible to replicate by a rogue NFT creator– and the NFT standard was primarily created for this reason.
“NBA NFTs are interesting because they’re being issued by a major organization,” says Swish. “The NBA has continued to dominate despite COVID. It’s become the first major organization to back NFTs and to create a marketplace around it. I’m personally not a fan of the NBA NFTs when it comes to the product itself. I wish that instead of receiving a highlight customers could get exclusive footage/interviews. That would only make the NFT more rare and valuable.”
Are NFT’s Here to Stay?
The NBA Top Shot project may be viewed as a significant small step towards the mainstream acceptance of the ownership of unique digital assets.
“NFTs are one of the most democratized ways to have an ownership stake in something as cool as Internet culture, whether that be memes or NBA moments,” says Troy Osinoff, Co-founder of JUICE Labs, cryptocurrency aficionado and doomed to be a Knicks fan for life. “For example, that flying Nyan cat meme NFT sold for nearly $600,000. That means someone was willing to own that piece of the internet history for $600k– it’s only logical super NBA fans may want to own their favorite NBA moments as well.”
One is urged to look at CryptoPunks, an early version of digital collectibles described as rudimentary pixel art. A CryptoPunk recently sold for 605 ETH, or about $1.1M, to one of the largest decentralized autonomous organizations (DAOS) that primarily invests in digital collectibles called FlamingoDAO.
“I believe NFTs will be huge because it’s going to introduce cryptocurrency in an interactive and consumable manner,” says Swish. “I especially think it will explode in the gaming space. Think about it: Fortnite sold over a billion dollars of items/skins and people didn’t have ownership over the digital assets they were purchasing. NFTs solve this. A game like Fortnite or NBA 2K could see it as a great opportunity to help its users own digital assets and buy/trade/sell it on a secondary market.”
There appears to be some synergy between the colliding of the cryptocurrency and collection communities, as many are eagerly following the development of NBA Top Shots and its secondary market.
“I think the space will continue to grow 100% to 500% month-over-month for a bit, says Buster Scher (@Buster), Founder of Hoops Nation. “ Most people will just swing blindly while the top 5% of artists NFT’s will rise to the long term top.”
Final Thoughts: Should I Buy Something on NBA Top Shot?
NBA Top Shot and crypto will have an interesting and intertwining road together. As always, we’re not here to tell you how to spend your money– we’re not financial advisors nor do we give financial advice.
NBA Top Shot NFTs are pretty polarizing, as most new technology is. The bullish case is that ownership over these NBA moments will be extremely valuable in the future, particularly as more people enter the digital asset ecosystem. The bearish case challenges the inherent value of owning a purely digital asset, as well as the long-term efficacy of partnerships between organizations like the NBA and NFT platforms like Dapper Labs.
If you’re thinking about buying something on NBA Top Shot, it may be worth waiting for more is it here of the NBA Top Shot packs to go back on sale, but they’ll likely sell out very quickly once they do. Regardless, following the NBA Top Shot is the secondary market is collector history in motion.
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ABOUT THE AUTHOR
ABOUT THE AUTHOR
Alex Moskov is the Founder and Editor-in-Chief of CoinCentral. Alex leans on his formal educational background (BSBA with a Major in Finance from the University of Florida) and his on-the-ground experiences with cryptocurrency starting in 2012. Alex works with cryptocurrency and blockchain-based companies on content strategy and business development. He privately consults entrepreneurs and venture capitalists on movements within the cryptocurrency industry.
His writing has been seen in The Hustle, VentureBeat, Yahoo Finance, Harvard Business Review, and Business Insider. His articles on CoinCentral have been cited on publications like Forbes, TechCrunch, Vice, The Guardian, Investopedia, The Motley Fool, Seeking Alpha, and more.
He also regrets not buying more Bitcoin back in 2012, just like you.
You can connect with Alex on Twitter.