Non-Fungible Tokens (NFTs) are digital artifacts that have unique identifiers, and as such, cannot be replicated. The potential for such technology can easily be seen, and it has been utilized by different entities across various industries. It’s been used for artwork as well as real estate, the food industry, and even shows (like what Idol Philippines did in the middle of 2022). More than what the NFT actually shows, these tokens hold value due to certain privileges it grants to their owner, and their rarity. One can think of them in a similar way to trading cards, with their uniqueness and marks of authenticity embedded in code making them truly valuable.
Additionally, this is why copy-pasting the NFT image that NFT critics use is not as strong as an argument against NFTs. After all, you can’t just photocopy a $1 million Pokemon card and expect that to be of the same value, right?
People saw the trading card similarity, and thus, sports NFTs were born. These sports NFTs were made to be a digital version of sports trading cards and could be held, interacted with, gifted, and traded. Some offer more unique features and benefits, but more on that later.
There are a lot of sports NFTs going around in the market, but none are as popular or as lucrative in their prime as NBA Top Shot.
The sports NFT that you have most probably heard of, NBA Top Shot, was created to be exactly like a virtual trading card platform featuring NBA “moments”. Moments are notable NBA highlights ranging from ordinary three-pointers to flashy passes, and everything in between.
Created in mid-2020, this project was a collaboration between the NBA and Dapper Labs, who created one of the first-ever NFT games in CryptoKitties. NBA TopShot allows users to hold, interact, gift and trade “Moments” taken from NBA games.
Like sports trading cards from the likes of Panini America, each moment is valued by its rarity. The rarer the Moment, the more expensive it will be. They are categorized into different tiers:
Each Moment also has its own serial number, which is also an indicator of its value i.e., the lower the serial number, the more valuable the Moment is. However, there are many more indicators of a Moment’s value. For example, Top Shot holds events where users can complete specific sets of Moments to win a rare and special card. Naturally, the Moments required to complete these sets will skyrocket until the end of the event.
Of course, the specific players in the Moments themselves will affect the value. For example, barring other variables, a LeBron James Moment will always be more expensive than, say, a role player like Harrison Barnes. In fact, the most expensive Top Shot ever bought was an LBJ dunk in the 2020 NBA Finals, a Legendary moment that sold for $230,023. A lot of 23s here, with the Moment’s serial number also bearing LeBron’s iconic number 23.
Yes, sometimes even the players’ jersey numbers also affect value, in that Moments with the jersey number of the player as the serial number can be sold at unusually high prices. This is regardless of whether the card is a basic one, a part of a set, or any other classification. For example, a Luka Doncic Moment with a 77 serial number has a much higher value than even lower serial numbers of the exact same card, simply due to the fact that Luka wears #77.
So, how exactly do users acquire these Moments? There are multiple ways, but the most common one is through packs. Beginners would get a Starter Pack for $9 a pop, after which they can participate in limited-time pack drops. Users can also buy and sell moments in the Top Shot Marketplace.
In its early days, the most ordinary Moments were selling for around $20. But with the cheapest 3-player packs costing $9, selling any moment above its cost was almost an instant profit.
The project has already produced all-time sales of more than $1 billion dollars, which is pretty good. The initial success of NBA Top Shot has been noteworthy, so much so that it became the catalyst for more sports entities to delve into NFTs.
The National Football League (NFL) partnered up with Dapper Labs as well to create NFL All Day sometime in late 2021. Its first public pack drop was launched just this August 18, 2022.
As NFL All Day is created by Dapper Labs. Every mechanic is pretty much the same with NBA Top Shot. It includes football Moments ranging from rushes, catches, touchdowns, etc., while also having the same rarity tiers.
The platform’s current top sale is just worth $120. However, it did surpass Top Shot in terms of sales volume within the month of its official public launch. All Day did $7.3 million, while Top Shot only did $7 million.
Topps is a well-established company that has been operating since 1938. They are in the business of manufacturing chewing gum, candy, and collectibles, the most pertinent of which is sports memorabilia. They are most well-known for producing trading cards for basketball, football, baseball, soccer, and ice hockey. They have just recently been bought by Fanatics, Inc.
This acquisition was driven in part due to the one-of-a-kind deal Topps had with Major League Baseball (MLB), which saw them release their 2021 Topps Series 1 baseball NFT collectibles. Unlike the previous two entries, these collectibles do not feature moments but are more digitized versions of Topps’ own physical trading cards with their own rarity system: common, uncommon, rare, and legendary cards.
More recently, they have also created NFTs for the Bundesliga, the top soccer division in Germany. This works similarly to the MLB series. Topps will potentially digitize their other sports trading cards and even their non-sports properties in the future.
Currently, NBA Top Shot can be labeled as the Axie Infinity of sports NFTs. It had the huge initial success that inspired a multitude of projects like the ones mentioned above and more, but it has since dipped by a considerable amount due to bear market conditions in cryptocurrencies as a whole and the increasing NFT supply. Nevertheless, venturing into sports NFTs is loaded with potential.
For the leagues, it is a chance to show development and adaptation to the newest technologies, with the additional benefit of having their NFTs as a gateway for new fans. For the developers, being tied up with some of the most popular leagues in the world (including the NBA, MLB, NFL, etc.) will be hugely beneficial for their image. Moreover, there is huge potential to acquire sales due to the fact that sports are mainstream. For example, NFL All Day sales go up every Sunday due to football matches happening every Sunday. In fact, just this past September 12 and 19, it beat “blue chip” projects like Bored Ape Yacht Club in the CryptoSlam NFT market charts. This says a lot about the potential number of customers brought about by sports events.
Even right now, with the 2022 Qatar Soccer World Cup, there is a HUGE potential audience to capture, particularly considering that the World Cup has been the most-watched sporting event in history while being considered to be the biggest sporting event in the world. The market is definitely there and will continue to be there.
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