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NBA Top Shots

Case study and exploration of NBA Top Shots NFTs
LeBron James performing a slam dunk during an NBA game with a crowd cheering in the background
© RMIT 2022

Our next example of successful NFTs comes from the world of sports.

The National Basketball Association (NBA) of the USA is well known internationally as the world’s largest and most popular professional basketball league. Through the innovation of its ‘NBA Topshots’ NFT platform and marketplace, it has boosted the emergence of NFTs as digital collectibles.

NBA Top Shot can be thought of as the digital reimagining of traditional sports trading cards. Top Shot is a non-fungible token (NFT) marketplace where fans can buy, sell and trade NBA moments, which are packaged video clips of game and player highlights that are ‘minted’ in limited runs and operate like trading cards. Like trading cards, the number of tokens minted (created) and issued in a ‘run’, along with the fame or popularity of the player(s) in the clip, influences the value and desirability of the NFT. The fewer on issue, the more popular the player(s) and, in a feature that trading cards don’t have, the more spectacular or renowned the passage of play in the clip is, the more valuable and desirable the token.

NBA Top Shot is a partnership between the NBA and Dapper Labs, a blockchain company with its own blockchain platform “Flow” which is an open platform specifically designed to support digital artefacts, games and the apps used to interact with them. In its simplest explanation, NBA Top Shot is an online forum in which fans can buy and sell video clips of their favourite passages of play, called ‘moments’, from recent seasons.

How it works:

The NBA cuts the video clips of game highlights and confers with Dapper Labs to decide how many of each highlight, or ‘moment’ they are going to sell (the size of the ‘run’) and number them. They place each highlight into digital packs, just like regular trading cards, and sell the packs on the official NBA Top Shot website. The pack prices depend on the quality of the highlight, the stardom level of the player and the exclusiveness of the card. Once a pack is purchased, the ‘moments’ go into your encrypted, secure highlight wallet to be ‘showcased’ or re-sold on the NBA Top Shot Marketplace.

The appeal of Top Shot over traditional collectibles like cards is in the special nature of NFTs and in the way they can be traded. here is complete data provenance on public blockchains, meaning NFT data such as, how much they’ve sold for, when they are sold, and to whom they are sold, can be viewed by anyone. Furthermore, blockchain data is immutable, so establishing authenticity is not a problem – by the nature of NFTs the risk of forgery and counterfeiting is negligible to non-existent.

Unlike traditional collectible markets in the material world, Moments can be traded instantaneously, bypassing the physical and logistical headaches and costs of packaging, shipping, and insurance and there is no need for the services of authenticators or graders. Nor is there a need for auctioneers who may take hefty commissions on sales. And because digital markets are so heavily trafficked, collectors can put their wares in front of more potential buyers than they ever could through conventional methods. No longer is a seller reliant on someone who might show up at a collectible show or swap meet. Pack owners can also ‘display’ their collection for other users to see and admire without having to worry about the physical security of their collection.

Another feature attraction of NBA Top Shot is the monetary flow-through benefit to players. The NBA and the National Basketball Players Association (NBPA) have a revenue sharing arrangement with Top Shot. For every single moment that’s transacted on the marketplace, there’s a five percent seller’s fee. That five percent is shared between Top Shot, the NBA, and NBPA. When a player’s moment is sold, the cut is divided across the entire league and not just to that specific player. Tracking the on-chain sales and filtering a cut of every sale back to players would be impossible in the traditional, non-digital collectible world.

Top Shot opened to the public in October 2020 and exploded onto the crypto scene in early 2021. There are now (in early 2022) hundreds of thousands of users who own at least one NBA Top Shot moment with volumes of trade running into the millions. A WNBA Top Shot is on the way, and Dapper Labs has recently contracted to the UFC for a similar platform and marketplace. In addition many other professional sporting leagues and even high-profile clubs such as Real-Madrid have embarked on their own NFT platforms and marketplaces.

© RMIT 2022
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