NBA Top Shot
8 minute read · Issue Number 91 · October 22nd, 2021
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Welcome to part 2 of the digital collectibles ‘collection’ (LOL).
Last week’s edition featured the French unicorn Sorare.
Today we’ll learn about NBA Top Shot.
If the content discussed here makes no sense at all for you – then you’re absolutely screwed.
Ha! I’m kidding – I encourage you to read and learn more about:
Alright – assuming you’re ready to understand NBA Top Shot – let’s get to it.
NBA Top Shot (NBATS) is a project that the National Basketball Association (NBA) created together with Dapper Labs in July of 2019 (more on Dapper in a second).
NBATS is essentially a blockchain-based platform that allows fans to buy, sell and trade officially licensed video highlights. The platform currently has 1.1 million registered users who have traded more than 780 million USD.
As opposed to Sorare’s Ethereum – NBATS is based on the Flow blockchain.
What are the differences?
Costs, scalability, types of protocols, and others. Each platform has its benefits and drawbacks, especially when it comes to NFT project development.
“We needed a platform that would scale without sacrificing user experience.
Ultimately, Flow will create an environment where we can engage every basketball fan on the planet who wants to participate, while any third party developer can build a rich ecosystem around it without any barrier like crossing shards or sidechain limitations.”
— Caty Tedman, Head of Partnerships at Dapper Labs
Dapper Labs is a Vancouver-based company that develops projects, games, and products on the blockchain. Think: a group of people that can code.
They’ve recently raised $250 million in a funding round that values the company at 7.6 billion USD.
Dapper pitched the idea of creating collectibles from highlights to the NBA, and the rest is history.
Top Shot’s Business Model
The NBA owns a gazillion highlights from the game. They cut those highlights, forward the .mp4 video file to Dapper Labs, and decide how many of each highlight they will sell.
They put each highlight into digital packs that live on the blockchain and sell the packages for prices ranging from $9 to $230.
The pack prices depend on:
The quality of the highlight
The popularity of the player
The exclusiveness of the card
Once you purchase a pack, those highlights (also known as “moments”) go into your encrypted, secure highlight wallet to be “showcased” or re-sold on the marketplace.
Dapper also earns from the secondary marketplace. They take a 5% commission on the resale prices each time a moment changes hands.
“Awesome, but how big is the demand for these so-called ‘moments’?” – I’m glad you asked.
Buying a pack is not so simple. When NBA Top Shot announces a collection, the entire community rushes to join the queue to buy them on a first-come-first-served basis. One time, 200,000 users waited in line for 10,000 packs!
The Bottom Line
A few months ago, an NBA Top Shot moment of a LeBron James dunk highlight sold for 387,600 USD! Check it out:
Together with the NBA, Dapper Labs created a billion-dollar market that involves scarcity, exclusivity, popularity, quality, belongingness, and entertainment.
The craziest part?
All this is from highlights that were sitting on someone’s hard drive three years ago.
Until now, the idea of creating these assets and selling them online through the blockchain has proven useful.
However, the next step for massive adoption will depend on how useful those assets can become. What benefits will future Top Shot owners be able to have?
The Irrelevant Investor: What Is Top Shot?; Michael Batnik’s insane experience of how he ‘flipped’ moments in NBA Top Shot for some profits.
5 Things Every NBA Top Shot Beginner Should Know; Invest in your fandom, connect with the community, use your moments, collector score is king, use NBA Top Shot tools.
How Rare is an NBA Top Shot collectible?; Moments let you own an official piece of sports history in a finite number. A Moment is a connection to your favorite players, teams, the league, and a proof of your fandom.
🎙 Halftime Snack of the Week
WSC Sports is by far one of my favorite sports technology companies in the world.
This week, I had the honors of hosting Daniel Shichman – the CEO & founder – on the podcast.
We discussed A.I. and the technology powering WSC, the power of leverage through technology in sports, the future of content and fan engagement, how WSC grows from here, and so much more.
On the emoji scale, how much did you enjoy today’s newsletter?
Until next week,
Read more: sportstechbiz.substack.com.
Halftime Snacks Podcast