People have spent more than $230 million buying and trading digital collectibles of NBA highlights

In the realm of digital collectibles, a staggering sum exceeding $230 million has been invested in the acquisition and trade of NBA highlights. NBA Top Shots, a novel iteration of trading cards, distinguishes itself by featuring video highlights rather than static photos. The financial commitment to NBA highlights has surpassed the $230 million mark.

A highlight showcasing LeBron James fetched an impressive $200,000, while an edition featuring Zion Williamson commanded a slightly lesser sum. The National Basketball Association has strategically positioned itself at the forefront of the trading card domain, and presently, the game is entirely sold out.

In collaboration with Canadian-based Dapper Labs, renowned for the CryptoKitties game, the NBA has ventured into the creation of a distinctive digital collectible asset. Termed NBA Top Shot, this crypto-collectible can be acquired as a non-fungible token (NFT), with each collectible intricately linked to a blockchain—a digital ledger akin to those utilized in digital currencies like Bitcoin. This affords each NFT an unparalleled and impervious certificate of authenticity, rendering any perfect duplicates instantly identifiable as counterfeit.

The current “packs” for entry into this digital collectibles realm are available at a modest $9.00, yet they perpetually remain in high demand.

Caty Tedman, spearheading marketing and team partnerships at Dapper Labs reports that Top Shots has amassed over $230 million in sales thus far, with a substantial portion emanating from subsequent exchanges among traders. Dapper Labs garners revenue through transaction fees from peer-to-peer dealings and the periodic release of new NFT packs.

Tom Richardson, a digital media professor at Columbia University’s sports management program, expresses fascination with this evolving landscape. Lars Rensing, CEO of blockchain service provider Protokol, views it as a noteworthy stride toward the future.

This venture has not only become a lucrative revenue stream for the NBA but has also achieved complete saturation.

Delving into the novel trading card model
Top Shots materialized from a licensing pact inked in 2019 between the NBA and its players’ union with Dapper Labs. Though the NBA refrains from offering official comments on this narrative, Richardson, a former head of publishing at the National Football League, outlines that the league can claim a 10% to 15% share of sales from any entity leveraging its intellectual property.

Dapper Labs acquires licenses for reels from the NBA, subsequently digitizing the footage and limiting its availability to establish scarcity. Certain NFTs showcase highlights from varied perspectives, coupled with digital artwork, with one currently listed at a staggering $240,000.

Mark Cuban, owner of the Dallas Mavericks, draws parallels between Top Shot and the traditional trading card model. He envisions it as an enjoyable platform for trading and collecting scarce items without the inherent risks of damage or theft. Cuban asserts that the value adheres to the age-old principles of supply and demand.

Richardson, also serving as SVP of strategy at Mercury Intermedia, commends Cuban for presenting a comprehensible and sensible perspective. He elucidates that if a substantial number of individuals desire a specific NFT, driving its bidding to $100,000, it exemplifies the fundamental principles of supply and demand.

Traders speculate that by 2051, a LeBron James NFT could potentially hold the same worth as a 1952 Topps Mickey Mantle card, which recently fetched an astounding $5.2 million. The prospect of a rare Michael Jordan rookie highlight NFT in three decades prompts contemplation of unprecedented values.

“We anticipate it to be a product enduring for a century,” remarks Tedman from Dapper Labs. “Those engaging now are essentially at the inception of this venture, especially considering the future worth of today’s rookie cards.”

Richardson underscores that Dapper addresses a significant challenge in the digital asset realm, combating the ease of infinite replication. He notes the transition from a world of abundance to scarcity with the introduction of NFTs, courtesy of the blockchain’s inherent mechanisms.

With this innovation, Dapper strategically positions itself to tap into a generation that esteems digital assets on par with physical ones.

Rensing anticipates sustained interest from the new digital-native generation, perceiving it as a solution that attracts new fans and digital enthusiasts.

Mobile game slated for release this year
Dapper recently secured $250 million in funding, elevating its valuation to $2 billion, largely attributed to the surging popularity of Top Shot. This infusion of funds will facilitate the expansion of its blockchain, Flow. Tedman reveals that Top Shot boasts approximately 350,000 registered users, emphasizing Flow’s enhanced capacity to manage a high-value marketplace—a challenge previously encountered with its CryptoKitties product.

The generated funds have been primarily captured by consumers participating in the marketplace, engaging in buying, selling, and trading, constituting 95% of the $230 million in sales. As a stress test for Flow, the firm recently released 5,000 new packs of highlights, resulting in 90,000 eager participants swiftly exhausting the available packs.

Tedman elucidates on the engaging nature of the community, likening it to the amalgamation of trading cards with the stock market—a game in itself, preluding the impending release of the mobile game.

The forthcoming mobile game, scheduled for launch this year, empowers consumers to construct NBA-like rosters by acquiring NFT moments. Participants can then engage in online tournaments, potentially winning more scarce NFTs that appreciate in value.

Richardson envisions the mobile game as a convergence of sports enthusiasm, technology, and financial experiences such as cryptocurrency and NFTs, offering a unique and enjoyable fusion.

Saum Noursalehi, CEO of tZERO, a tech firm specializing in tokenizing company assets, foresees a promising future for sports leagues employing NFT licensing agreements. He contends that this model could serve as a blueprint for utilizing blockchain technology to track and trade various types of assets.

Noursalehi emphasizes the transformative potential of blockchain technology in reshaping current paradigms of trading value and assets.

Tedman concludes with optimism, stating that this is merely the initial phase, with numerous ambitious plans waiting to unfold before a global audience.

Let the games of the digital age commence, even as entry into Dapper’s NBA Top Shot contest remains conspicuously sold out.