What is that this, shares, why is the LeBron spotlight price $ 208,000?
Go to YouTube and enter the words “LeBron James Nemanja Bjelica” in the search bar. The page loads with clips – one titled “LeBron James wants to murder Nemanja Bjelica with dunk, then stare down” – of James shooting down the alley and diving over Bjelica.
Check it out for free. Repeat as many times as you want.
On Monday, an NBA Top Shot user named “jesse” paid $ 208,000 for this highlight.
Except in this case, emphasis may be the wrong word. So what did they buy? At Top Shot, the latest internet craze, such highlights are called “moments”. And what “Jesse” (aka Jesse Schwarz) actually bought is the NBA’s intellectual property in the form of a digital collector’s item that was sold through blockchain technology and gave him one of 49 coined LeBron James Cosmic (Series) 1 dunks.
Top Shot has received a lot of attention after the rapid market growth over the past week. As of Wednesday, the site had more than 350,000 active users and 100,000 buying users. Top Shot had sales of more than $ 37 million in 24 hours on Monday, according to Cryptoslam, and buyers (slightly) outperformed sellers in the market.
The NBA and the Players’ Association have entered into a revenue-sharing agreement on every transaction with Dapper Labs, which built and nurtured the market. NBA players open up tons of moments in live streams. The rise of Top Shot has sparked debate over the definition of “property” and whether this method can provide a blueprint for the future of the collectors’ market.
Welcome to the all-or-nothing stakes in NBA Top Shot.
How NBA Top Shot works
The concept of digital ownership is the biggest hurdle to understanding Top Shot. Believing in digital property, of course, means thinking that an intangible object that anyone can access at any time can be property, and that property leads to value.
Non-fungible tokens (NFTs) exist in a blockchain, of which there are an infinite number. No two NFTs are the same and cannot be divided or multiplied (unlike Bitcoin).
Every moment – a short video from multiple angles – on Top Shot is an NFT. This is how moments (also known as highlights) are bought, sold and traded in the digital market.
“NFTs in general, of which Top Shot is the first and foremost, could become a top 3 revenue stream for the NBA in the next 10 years,” wrote Mark Cuban, owner of Dallas Mavericks, in an email to USA TODAY Sports.
Another James Dunk sold for $ 125,000 Thursday, two days after a Ja Morant “Holo MMMXX” cost $ 100,000 – the same price someone paid for a Zion Williamson block (also the most expensive Non -Dunk sale).
Overnight, a Williamson rookie debut card, also a block, went on sale for $ 77,777. Vince Carter’s final three-pointer career sold for $ 64,990 on Monday – an example of how career milestones could have higher value.
“It’s a lot of fun,” Schwarz said on ESPN this week. “I think you can see the users growing – and they are making astronomical numbers every day – I think you can see how good the product is and how addicting it is. It’s like day trading on sports based on imagination meets.”
As a self-proclaimed “big” James fan, Schwarz was involved in the sneaker collecting game and sees Top Shot as another example of this hobby.
“To me, art is what you want and now it’s top shots,” he said.
The Cuban owns about 50 moments and spent about $ 600 in total. He entered the market when moments went for $ 2 and $ 3, including one from Star Mavericks point guard Luka Doncic.
Moments are shaped and then brought to market by packing drops. The (most commonly used) base set costs $ 9, while more exclusive packages for higher tier cards cost more. The packs are currently sold out, but Top Shot has organized “Pack Drops”, which also serve as on-site stress tests and where 5,000 users can buy packs.
More than 90,000 people waited in line on Tuesday while a basic set pack was dropped.
Once users have created an account with Top Shot, they can purchase packages. If they get noticed during a drop, they can hit the market to buy available moments – the current highest listing is $ 240,000 for a Morant Dunk.
Top Shot’s recent popularity streak has influenced the market.
“(It is) nearly impossible to get a pack, and the lowest price for a card goes up quickly as demand overwhelms the supply for sale,” the Cuban wrote. “That will be the biggest challenge: maintaining the balance, supporting the existing prices in their market while keeping prices low for new collectors and investors. They may need to make HUGE peppermints and see how the market goes. “
Between Wednesday and Thursday, Top Shot shaped 317,000 moments.
Top shots place in the collectors’ industry
The trading card industry and memorabilia as a whole made a comeback in recent years before exploding in 2020.
Top Shot started a closed beta in mid-May for an exclusive group of around 30 collectors and grew the community to a few thousand before moving to an open beta on October 1st.
“We want to find a way to add real value to sports fans,” said Caty Tedman, Dapper’s director of partnership that oversees Top Shot, told USA TODAY Sports. “It’s a really exciting opportunity for fans to be part of a basketball economy.”
Problems in the physical card industry, such as condition and authenticity, do not have to be taken into account with Top Shot thanks to the blockchain. In addition, potential buyers can see exactly how much a moment it was sold for, who it belonged to and what dates it was previously sold on.
Daily fantasy users were early adopters of Top Shot, which already developed a weekly fantasy game for moments, Swyssh. Hypothetical matches can be simulated thanks to the digital nature of the element.
“That’s part of what makes moments on the blockchain great. All of this data is on the chain and anyone can access it to create something we may not have thought of before,” said Tedman. “It wouldn’t be impossible to do that to a physical good, but it would be really, really difficult.”
Top Shot has been developing a mobile game, Hardcourt, for the past 18 months, which is slated to be released in the near future, Tedman added.
The league and players’ association began studying and researching potential blockchain applications, including digital collectibles, about three years ago. In 2019, the NBA, NBPA and Dapper announced a multi-year license agreement. (Neither party would disclose the financial terms.)
Dapper had developed product spaces for various sports, Tedman said, but saw the NBA highly valued for its reputation as a forward-thinking, tech-savvy organization.
“They were always at the top of our list of dream partners,” said Tedman. “It just so happened that at the same time they started doing a thorough research on blockchain. When we came to the table together and put this consumer product up, they loved it and helped us make it better and better for their fans. Our pitch didn’t really do without what you see today, which is particularly exciting. “
UFC also has a partnership with Dapper, and the company has spoken to virtually every major sports league about what it would be like for their fan base, Tedman said. They will all be playing behind the NBA, which took the opportunity to build a digital ecosystem and give fans even more opportunities to connect with the league and its players, another source of income.
Josh Hart of the New Orleans Pelicans is an early adopter of Top Shot and has opened packs on live stream and announced that the concept is broadcasting “Loot”. Tyrese Haliburton of the Sacramento Kings hyped the product and tried to convince teammates to join him on the platform.
“We were surprised to see this so early (player participation) but not surprised to see it at all … especially the people who lean on and understand how to build and understand a collection, prune that collection and understand churn Put things back in The marketplace where you can buy more packs was super exciting, ”said Tedman. “It’s super exciting that it’s so positive and we haven’t got anyone to say, ‘I don’t get it,’ which is a really great sign.”
The players are invested: they keep 100 percent of the money from moments they personally sell in the market, Tedman said. On the other hand, the buyer will have little problem proving that he owned this player before.
“We are excited about this new and unique partnership with Dapper and look forward to continuing to work with them as we grow this product offering in the future,” said Josh Goodstadt, executive vice president of licensing at THINK450, the division of NBPA, in a statement USA TODAY Sports.
Next up is the WNBA. Top Shot doesn’t have a launch date yet, but Moments for Women will be available soon.
“This is a real market”
Dapper has already seen what happens when such a product fails.
In late 2017, Dapper launched a product called CryptoKitties. A CryptoKitty named “Dragon” sold for $ 170,000 after users flooded the market, which essentially evaporated 18 months later.
“We learned that a platform has to be scalable,” said Tedman.
Tedman adde Top Shot grew 10% week over week by working through the first few days of the product before taking off.
“We need to be able to support this number of transactions if we are to achieve our ambition to be a global basketball product,” she said.
Technical challenges have also emerged. Top Shot began promoting a rare pack drop for noon ET on Thursday. The drop was delayed by three hours before it was postponed to Friday noon at the earliest.
The concern that online bots would hijack the queue and thus lock out customers was the main reason for the decision.
“We would like to be responsible for this drop and know how many collectors are enthusiastic about this Premium Pack drop,” tweeted Top Shot.
A complaint was made to Top Shot because there wasn’t a smoother process for withdrawing money. Until two weeks ago, Tedman said, a customer service rep handled any checks required to take money out.
The concerns are justified. But believers are confident that products like Top Shot are the future. On Friday morning alone, a Steph Curry assistant cost $ 299 from the base rate, while a Bojan Bogdanović three-pointer (Metllic Gold LE) cost $ 2,900.
“Make no mistake,” wrote Cubans. “This is a real market with real collectors and real value. That’s not to say there aren’t any challenges, but (NFT intellectual property) is here to stay. “
Follow Chris Bumbaca on Twitter @BOOMbaca.