Despite knowing next to nothing about basketball, since October 2020 I have been interested in what’s going on with Dapper Labs’ NBA Top Shot collectibles.
The reason wasn’t prescient. I knew a game was planned using these NFTs and so was checking it out.
And, for three months, it looked like nothing much happened. In fact, many of my NFTs - called Moments in NBA Top Shot parlance - actually decreased in value.
I even got into a Twitter spat with a big collector about valuation techniques.
What just happened?
Of course, now the picture is rather different. NBA Top Shot has completed $30 million in lifetime trading activity, overtaking CryptoKitties ($29 million).
At the current pace of $5 million a day, it could even break the $50 million barrier before we’re into February.
The pace of growth is incredible.
24% of weekly activity happened in the past 24 hours
78% of monthly activity happened in the past week, and
93% of lifetime activity happened in the past month.
Building blocks
On one level, I think this is a strong vindication of the concept of consumer blockchain economies.
Like many in this space, I didn’t know when (or how) this concept would go mainstream.
But - more importantly - I couldn’t see why consumers wouldn’t want to own their digital goods, and hence trade them, allowing efficient markets to decide what these assets were worth.
And let’s be clear. NBA Top Shot still has fewer than 20,000 account holders; a limitation more of server capacity than willingness to grow that audience I think.
That number could easily grow 10X in the coming months.
More specifically, though, we can get an idea of what’s required to allow blockchain projects to go mainstream.
The first is a technology platform anyone can use.
I was not enthusiastic when Dapper Labs announced it was developing Flow, its own blockchain but the success of NBA Top Shop underlines that allowing non-crypto people into a project - what we could label passive accessibility - is a pre-requisite for success!
The failure of similar branded projects such as MLB Champions and F1 Delta Time (both purely Ethereum projects) in terms of attracting an audience demonstrates brand isn’t enough.
Yet, having a real-life brand is also major advantage in terms of making the project actively accessible. Purchasing real-life video clips of current NBA plays makes NBA Top Shot relevant in a way buying a player card or branded game item is not.
Finally, the ability for items to rise in value clearly throw jet fuel onto the process. Will people spend $100,000 buying a blockchain-secured video clip of LeBron James blocking a certain basket even though it was originally acquired for $100?
Yes.
The valuation process is just infinitely less abstract than buying - say - metaverse land or a pixelated alien (even if some of those NFTs types currently are worth much more).
What’s next?
As ever, there is no one-size-fits-all approach. Let creativity explode.
Perhaps in a decade’s time, we will simply look back at NBA Top Shot as demonstrating the value of the low-hanging fruit; much as for many years we viewed CryptoKitties.
No doubt, as with all the CryptoKitties clones, a lot of deals are frantically being signed to launch similar blockchain projects.
And that’s good for the entire ecosystem. Success begets success.
Just as CryptoKitties led to Axie Infinity, I look forward to what’s next…