Mar 12, 2021 - Sports

What to know about the NBA Top Shot trading phenomenon

Illustration: Aïda Amer/Axios

Illustration: Aïda Amer/Axios

NBA Top Shot is a blockchain-based platform that allows fans to buy and sell officially-licensed highlights from NBA games.

Why it matters: The platform, which is a joint venture between the NBA, NBPA and Dapper Labs, could be the future of the collectibles market.

  • Thanks to the blockchain, Top Shots come in verifiable numbered runs (i.e. no fakes), and a complete list of all transactions is available.
  • Sales can happen almost instantly, and since digital highlights don't degrade over time, there's no need for card grading services.

How it works: The NBA cuts the highlights, then Dapper Labs decides how many of each highlight to sell and numbers them.

  • Highlights are placed into digital packs, just like regular trading cards, and the packs are sold on the official NBA Top Shot website.
  • Once you purchase a pack, those highlights go into your encrypted wallet to be "showcased" or re-sold on the NBA Top Shot Marketplace.
A February highlight of LeBron James dunking sold for over $200,000. Courtesy: NBA Top Shot
A February highlight of LeBron James dunking sold for over $200,000. Courtesy: NBA Top Shot

Be smart: You don't need to own a Top Shot to watch it, as NBA highlights are available everywhere. But if you "own" one, you're the only one who owns that asset.

"Can't I just go to YouTube for free if I want to see a Ja Morant dunk? Of course you can. You could also have your cousin in art school design a Kobe Bryant rookie card for you in Photoshop."
— DeMarco Williams, SLAM

By the numbers: NBA Top Shot has processed more than $250 million in sales from 100,000 buyers over the last month alone.

  • Michael Levy, a 31-year-old financial analyst, spent $175,000 on Top Shots over the past six months. They're now worth ~$20 million.
  • "I don't know where this is heading," Levy told WSJ (subscription). "I just know that it has enormous potential that no other investment I have access to can mimic."

Of note: Dapper Labs' first major project was called CryptoKitties, which was essentially digital Pokemon cards. Like Top Shot, it exploded — only for the items to plummet in value after the fad passed.

What's next: Other leagues like the NFL and NHL could embrace the revolution, and Dapper Labs is "actively building out experiences for women's sports," per CNBC.

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