ESPN analyst Brian Windhorst covered the new digital collectibles trading platform on February 16, and Top Shot has transacted over $110 million in less than a week — growing to over 50,000 users — and over $123 million in sales since their launch in September.
Players, fans and coaches alike have enjoyed buying, selling, trading and watching the video highlight "moments" in HD quality with date, score of the game, and other meta info attached to the asset. One NBA moment, a signature Kevin Durant step-back three pointer, is listed for sale with ask prices between $630 and $250,000 at time of writing. Another 13-second moment of Zion Williamson sold for $100,000 earlier this year.
The pricing of the direct sales of the Top Shot packs range from $9 to $230 dollars and only 25,000 units of each pack were released by the end of the 2020 season, with a total of around 400,000 packs issued so far. Many packs are selling out within hours, creating a Supreme-like sense of FOMO.
Recently, I purchased this no-look Lebron James 3-pointer for $468, sold it back to the market for $750, and now it's on sale again for $1,500. I'm probably going to regret selling at $750 when there are 15,000 moments available, but it always feels good to turn a profit on your first trade.
CryptoKitties and Dapper Labs
Dapper Labs is probably best known for clogging the Ethereum networks in late 2017 with their cute and furry internet sensation CryptoKitties, which is a blockchain game built on Ethereum. The game allows players to purchase, collect, breed and sell virtual cats. It is one of the earliest successful attempts to deploy blockchain technology for leisure and entertainment purposes.
Each CryptoKitty is represented as a non-fungible token using the ERC-721 token standard on Ethereum. The virtual cats are breedable and carry a unique 256-bit genome with DNA or attributes for any cat, such as pattern, mouth shape, fur, eye shape, base color, accent color, highlight color, eye color, wild, environment, and other more traits like purrstige and secret. New CryptoKitties are created by breeding existing CryptoKitties, but only 4 billion cats can be bred.
In March 2018, CryptoKitties spun off into its own company, Dapper Labs, and raised $12 million from Union Square Ventures, Andreessen Horowitz and other venture investors.
In September 2018, someone purchased a kitty called Dragon for 600 ETH ($170,000 at the time), which was the most expensive kitty to be ever traded in the history of the game. The Dragon even broke the record of Founder Cat #18, which sold for 253 ETH ($110,000 at the time of sale) nearly a year ago.
According to reports by The Block, Dapper Labs is raising $250 million at a $2 billion valuation. The funding round is being led by Coatue Management, which is led by billionaire investor Philippe Laffont, who previously invested in companies like Airtable, Instacart, Spotify and Bitmain.
Non-fungible tokens (NFT)
A non-fungible token (NFTs) are a special type of tokenized, blockchain-based cryptographic assets that represents something unique. Non-fungibility means the tokens are exclusive, non-divisible, and not interchangeable.
Advocates of NFTs believe that this technology can disrupt the gaming industry, digital art/collectibles, in-game items, and even physical commodities. The NFT ecosystem has grown to at least 73 startups, games, collectibles, and protocols across a dozen verticals, according to The Block.
It's not required to use a blockchain to be considered NFT, as it's easy to argue that a gift card with a unique SKU code is a unique non-fungible digital collectible item with tangible value. However, its inventory is managed by Amazon, Blackhawk Network, and other gift card issuers, making gift cards easy to void and manipulate to benefit their merchants.
As we saw recently with Robinhood shutting down trading GameStop (perhaps at the request of Citadel), centralized institutions have inherent risks that often get exposed in volatile markets. Blockchains provide transparency to keep us safe, especially while trading on P2P marketplaces.
You can listen to Roham talk more about CryptoKitties, NBA Top Shot and the future of NFTs on our recent episode of Around the Coin.