What is NBA Top Shot? How NFT Collectibles Are Changing the Game
There has been a lot of buzz lately around blockchain, non-fungible tokens (NFTs), digital collectibles, virtual trading cards and more. Today, investing and collecting goes above and beyond the trading cards and regular stocks of yesteryear. The latest and greatest in digital investing and collecting is NBA Top Shot, which has had a meteoric rise in popularity when it comes to NFTs.
Backed by the NBA and the National Basketball Player’s Association, NBA Top Shot is a way for fans to own authentic highlight reels of their favorite players and moves for as little as $9. NBA Top Shot is, in its own words, a way to own your own fandom. This guide explains everything there is to know about the process and how to get involved in one of the 21st century’s hottest platforms for collecting and investing.
What is an NFT?
NFT stands for non-fungible tokens — that is to say, data that is stored on a blockchain (a digital record book). It’s the newest way to own all sorts of digital media, from art to collectibles. The difference between an NFT and something like cryptocurrency (aka Bitcoin) is that an NFT is unique and non-fungible (i.e., not exchangeable for something of equal value). It’s also an all-or-nothing game with NFTs — you cannot purchase a fraction of it as you can with cryptocurrency. All transactions are public on the blockchain, and trades are made instantaneously. Each NFT has its own value, which is determined by the marketplace. NBA Top Shot is a way to own the NBA’s NFTs: digital trading cards of some of the NBA’s best moments.
Who owns NBA Top Shot?
NBA Top Shot is owned by Dapper Labs, a Canadian blockchain company that was founded in 2019. The platform is technically still in Beta. Similar platforms have raised some questions over the perceived value of NFTs. For example, the price of digital art has been a hot topic recently, but the partnership with the NBA is what adds authenticity and gravitas to the NBA Top Shot site and why collectors are especially excited about this particular form of NFTs. The highlight clips, called “Moments,” are fully licensed by the NBA, guaranteeing authenticity from the get-go, and the blockchain ensures that Moments are not easily duplicated or counterfeited.
Why would you buy a Moment that you can watch online for free?
One of the top questions asked about Moments — and NFTs in general — is why someone would purchase a digital clip of a game when you can watch them for free on the internet. First, Moments are made up of video, action shots, and game and player stats, so it’s more of a complete package than just a re-playable clip. For collectors, it’s about the glory, the bragging rights and the exclusivity — only a certain number of Moments of a particular clip are available, all with serial numbers. For example, you could own number 23 out of 49 of a particular slam dunk shot. Think of it in these terms: you can print a famous Picasso painting off of the internet and hang it in your home, but you don’t own the actual Picasso. Moments are for the biggest of superfans who want to own something rare.
How does NBA Top Shot work?
Fans sign up to wait in line to receive the next digital drop. Once it’s your turn, you can have a go at whatever “packs” (think of them like literal trading card packs containing a variety of clips, just packaged digitally) are available to you when it’s your turn to purchase. The face value runs from $9 to $1,000 depending on how many copies were created of a particular Moment, which are all in limited release. Once the pack is yours, you can divide it up and collect, trade and sell clips on the marketplace. Or, you can head straight to the marketplace to purchase Moments second-hand, where prices are set by the current owners. As of March 2021, there were over 300,000 second-hand Moments available on the marketplace, with approximately two million transactions performed to date for a total of over $300 million.
There are five categories of packs:
- Common: Over 10,000 digital copies were made
- Rare: 500-4,999 digital copies were made
- Legendary: 50-499 digital copies were made
- Platinum Ultimate: Only three digital copies were made, available through auction only
- Genesis Ultimate: Only one digital copy was made, available through auction only
Each Moment is marked not only with the serial number but also with either CC (circulation count, which means more copies of that Moment could be minted in the future) or LE (limited edition, which means the number of copies of that particular Moment is final). You can sell and trade your Moments by putting them on the marketplace, where prices are set by you and other users, like eBay. The lower the serial number (say, 65/499 Legendary), often the higher the value within that category of pack.
Here’s where it gets interesting: NBA Top Shot is the intersection of collecting sports memorabilia with digital investing. Because values are constantly changing, your investment is as well. At this point in time, NBA Top Shot is so hot — and Moments are so hard to get, even Common ones — that you’re almost guaranteed a return on investment. Just a heads up, though: owning a Moment does not entitle you to the Moment’s intellectual property or copyright.
Who can use NBA Top Shot?
Anyone can create a login to the website to get in line for drops. You will need to provide a method of payment via either credit card or cryptocurrency at signup. NBA Top Shot recommends using a credit or debit card to purchase the packs and then use their internal system called “Dapper Balance” on the marketplace for faster purchases. There will be a revamped referral page coming soon where users can refer friends.
What do you do with Moments once you own them?
If you are ready to level up, you can also get involved in NBA Top Shot’s Challenges. A Challenge is what it sounds like — a challenge for super collectors to obtain a certain number of Moments in a given time frame, usually between nine and 14, either via drops or the marketplace. Anyone completing the Challenge is then entered into a randomized list. The goal is to receive the number one serial number on that particular reward, which are not available in regular packs. Once the rewards are minted, the Moments are retired.
You can curate your own Showcases to show off the Moments you own and have collected, and then share them on social media and in the NBA Top Shot community. Think of it as your own private highlights reel of your favorite players performing some of their best moves. Each Showcase can have one to 10 Moments, and Showcases are easily edited by dragging and dropping to reorder them, creating new reels whenever you feel like switching it up. It’s a really easy way to get creative with the Moments you own.
You can also collect Moments to add to Sets, which are collections of a certain type of play. For example, there are Sets currently on the marketplace that include Season Tip-Offs and Denied!, a Set of blocked-shot clips.
The more you interact with NBA Top Shot, the more status you accumulate on the platform. The more difficult the Challenge or task, the more points you earn, and the more credibility you get on the platform. The more you interact within the community, the more visibility you get towards Baller Status as well. You’ll be put onto leaderboards for the top-tier collectors. The levels of status include Street Baller, Rook, Rising Star, Vet or Elite status.
What is NBA Top Shot’s market like currently?
As of March 2021, there have been hundreds of millions of dollars in sales on the marketplace, with that number growing steadily. All that to say: It’s very, very hot from an investment standpoint, with huge gains likely to be made even off of Common packs. The most expensive Moment sold so far is a Cosmic Edition Series 1 LeBron James dunk from a game against the Kings on November 15th, 2019. It sold for $208,000. A recent quick search had a Zion Williamson block from a January 24th, 2020 game going for $175,000 and a Steph Curry three-pointer from a March 5th, 2020 game going for $67,000.
Moment owners set their own prices, and before you purchase, you can preview the highlight, see how many others of the same Moment are for sale, see the edition size, player stats and the sales history of the Moment. (Fun fact: The first transaction of the Steph Curry three-pointer went for a mere $500 in October of 2020.) You can also search the marketplace by player, team or set.
It’s also an exciting time for NBA players, as there has been a resurgence in trading cards and memorabilia in general, and this is one way for them to get in on the action, literally. There are some players who have invested in NBA Top Shot, including Andre Iguodala, Spencer Dinwiddie and Garrett Temple. There is a revenue share across the NBA, Dapper Labs and the National Basketball Player’s Association, so players do get compensated when there’s a transaction, albeit not individually, but rather across the entire league. There is a WNBA version in the works as well, and Dapper Labs is also launching a UFC-licensed platform in the same style.
What are some of the downsides to NBA Top Shot?
There is no doubt the NFT world is very exciting, and to have it officially licensed by the NBA adds a level of legitimacy to this particular category of NFTs that hasn’t been there previously. But, there are some current frustrations associated with NBA Top Shot. For example, some users lament that once you purchase a Moment, you can’t buy another for 30 minutes. There is also a limited number of new accounts created each week, slowing down the growth of the platform overall. Drops are often sporadic and announced randomly on social media. And users who have accounts are frustrated at the long digital lines they have to wait in to get packs.
Also, bots often snatch up Moments that should really go to true fans, which is concerning, as is the ability to withdraw funds from your Dapper Balance — as of now, they are being withdrawn after a manual review period, and many users don’t have the opportunity to cash in on their growing investments as quickly as they’d like to.
There are also those who see this market as unsustainable, although owners such as Mark Cuban and players such as Josh Hart have really leaned into the platform. The site is also technically still in Beta, with no hard launch date set yet, so it can be buggy.
Ready to get in on the NBA Top Shot action?
NBA Top Shot is a very unique and new way to own a piece of your favorite highlights of the NBA — and it can be an incredibly lucrative endeavor. This is only the beginning for digital collectibles, and NBA Top Shot is a legitimate marketplace and community in which you can safely buy, sell and trade in a new medium. If you are someone who likes to be on the cutting-edge of sports and technology, then NBA Top Shot is definitely worth checking out.
Have you been lucky enough to purchase a Moment on NBA Top Shot? If so, share which one — or your Showcase — by tagging @finishline!