The same company that started the CryptoKitties craze is at it again: Dapper Labs, creator of nun-fungible tokens extraordinaire, signed on last year to help National Basketball Association (NBA) to create a non-fungible token (NFT) set of its own. Recently, the NBA’s NFT marketplace announced stunning sales figures: buyers have purchased more than $230 million worth of NFT goods.
The marketplace, dubbed ‘NBA Top Shot’, was built on Dapper Lab’s ‘Flow’ blockchain. NBA Top Shot buyers can purchase ‘packs’ of NFTs that feature famous in-game moments. These ‘packs’ are available for prices between $9-$230 on the NBA Top Shot website. Much like Pokemon trading cards, the specific contents of each pack are unknown; you have to purchase them in order to find out.
However, CNBC reported that the packs have become so popular that they are almost always sold out. This was also true at press time. There were packs available for pre-order, but all previously available packs were sold out. As such, most of Top Shot’s revenues come from secondary market sales in its marketplace. Notably, a LeBron James game highlight recently sold in this secondary market for $200,000; a Zion Williams highlight sold for ‘a little less than that’.
Bringing Old-School Sports Trading Cards into the Modern World
NBA Top Shop’s eye-popping sales figures are part of a much larger trend for the NFT space. CNBC previously reported data from a study by NonFungible and L’Atelier that found the total value of NFT transactions quadrupled last year, reaching past $250 million.
During the same time period, the number of digital wallets trading them almost doubled to over 222,179. NBA Top Shop has been one of the largest contributors to the rise of NFTs.
Nadya Ivanova, L’Atelier’s Chief Operating Officer, said at the time that: “we’re seeing a new generation of traders within the NFT market; people who are digitally native looking for digital native asset classes outside of established asset markets. These are people who have amassed reputation and wealth and want to invest it in purely virtual assets like NFTs.”
Mark Cuban, the owner of the Dallas Mavericks, explained that he sees the NFT marketplace as a modern-day iteration of the sports trading card craze. However, unlike paper trading cards, buyers do not need to worry about the risk of physical damage or theft. “And, the value is still set by the same laws of supply and demand,” he wrote on his blog in January.
“One of the Things That Have Defined the Digital Era Is We’ve Moved from a World of Scarcity to a World of Abundance with All Kinds of Media Assets and Products.”
The marketplace is a new source of revenue for the NBA, though it is not clear exactly how much cash the league earns from the trades.
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However, Tom Richardson, a digital media professor at Columbia University, told CNBC that the league can expect to solicit 10% to 15% of sales from any company that leverages its intellectual property. Additionally, Richardson previously served as the Head of Publishing at the National Football League.
“One of the things that have defined the digital era is, we’ve moved from a world of scarcity to a world of abundance with all kinds of media assets and products,” Richardson explained.
However, “the thing that defines the trading card business is a physical scarcity of the cards. So, (Dapper) created these NFTs with the idea of scarcity combined with authenticity because of the way the blockchain works.”
Moreover, the NFT trend has expanded beyond the world of sports. CoinTelegraph reported that: “NFTs are beginning to permeate the creative arts:” A digital NFT art platform called Async Art recently secured $2 million in seed investment capital.
Several hours before press time on Monday, Binance Chief Executive, Changpeng Zhao tweeted that: “#crypto will unlock the true commerce potential for arts and culture globally. #NFT”
— CZ 🔶 Binance (@cz_binance) March 1, 2021