Take your TopShot
There is an instinct my many to dismiss the more trendy end of the NFT market right now. I mean, they are a mindbender, right?
It doesn’t matter how much time you spend in the digital marketplace, or how informed you are about the potential of blockchain tech to change how we do everything there’s still a human need to hold and feel and experience the things that we buy with our money.
When you buy art you want to hang it on your wall. It’s hard to impress your dinner guests if they have to squeeze around your laptop to see your collection, after all.
It’s in that light that many are viewing NBA Top Shot, the most popular NFT on the market currently.
A quick primer if you’re not familiar: Top Shots are short highlight clips with unique blockchain provenance, They are created by Vancouver-based company Dapper Labs. They sell the Top Shots is “packs,” which range in price from $9 USD for a “common” set of three Top Shots to $199 for a Rising Stars set. Like all NFT the real action is on the re-sell market, however. Some LeBron James Top Shots have sold for six-figures this year.
If the name Dapper Labs rings a bell, it’s probably because the company has been operating in the NFT space for a while now. They are the creators of Crypto Kitties, the original NFT collectable.
In many ways, it’s that connection, which should be viewed as a positive, that are causing people to question the long-term value in Top Shots. After all, Crypto Kitties were hot once too, with bulging re-sell values. Now? You can grab one for about $9. What cool they ever had has gone bust.
That’s the wrong way to look at this though. Crypto Kitties weren’t a failure for Dabber Labs. No, they were a trail run that gave the company the insight into what works and what doesn’t. With Top Shots they are taking those lessons and are creating something that does have significant potential, both in the short and long term.
The biggest lesson they learned is two fold:
Firstly, you have to be cool. Fake cats aren’t cool. That product only appealed to tech-lovers who wanted to be part of something new. There was never any chance it was going to find mainstream appeal. The NBA, however, is possibly the coolest sports property on the planet.
Secondly, you need to create scarcity and strata. There are 1.8 million Crypto Kitties on the market. That’s why you can buy them for nine bucks. With Top Shots, new pack drops sell out in minutes. It’s exceptionally difficult to get your hands on these things. There’s also an established star system in the NBA that Top Shots is tapping into – buyers understand intuitively that a Giannis Antetokounmpo dunk highlight is worth more than, say, an Austin Rivers pick-and-roll.
All of this suggests to me that Top Shots is not going away anytime soon and, in fact, isn’t likely finished the initial growth period. It’s only now starting to be talked about outside of the early adaptor world and I suspect the interest is going to grow significantly as the NBA hits its playoff push. By the time the 2021-22 NBA season starts, the demand for these things will have fully hit the mainstream.
That’s the short term. Over the long term, the excitement will likely dip a bit, but people have been collecting sports memorabilia for a century. This is just new way to do it and I see no reason to think it continue.