Could these hoop stars make “Top Shot” the next CryptoKitties?
Top Shot, the NBA-themed digital trading card that hopes to bring blockchain to the masses.
What happens when you mix $61 million dollars, top-flight venture capitalists, high-flying NBA stars and the knuckleheads who nearly broke Ethereum? We’re about to find out.
Dapper Labs, the creator of CryptoKitties, has launched Top Shot, a blockchain-powered digital trading card. It bundles NBA-licensed player statistics and video clips into digital “cards.” The cards are released in packs, where legendary players are rare and scrubs a dime-a-dozen.
Users can share, buy, sell and trade Top Shot cards on Dapper’s app. So they can acquire a vicious Zion Williamson dunk, a Giannis Antetokounmpo eurostep or even Dr. J’s 1983 “Rock the Baby” dunk against the Los Angeles Lakers. The cards rarity is insured by an immutable, decentralized Dapper blockchain called Flow.
Dapper simultaneously announced a new investment round of $12 million dollars (on top of $49 million raised earlier, according to Crunchbase), some of which comes from NBA stars Spencer Dinwiddie* and Garrett Temple of the Brooklyn Nets, Aaron Gordon of the Orlando Magic, Andre Iguodala* of the Miami Heat and JaVale McGee of the Los Angeles Lakers.
“These guys have a vision for where blockchain can go,” says Dinwiddie. “This is a strategic investment for me, because I believe in what Dapper is doing, not just with Top Shot but with the Flow blockchain as well.”
Vancouver-based Dapper was already backed by some of the biggest names in venture capital, including Andreessen Horowitz’s Chris Dixon,* Union Square Ventures Fred Wilson* and Venrock’s David Pakman.
The venture money caught wind of Dapper after the wild success of CryptoKitties, which choked the Ethereum network in December 2017. Rabid interest in the art collectable game became as much as 11.8% of Ethereum smart-contract traffic and crippled the network globally. Those problems also piqued interest in alternative crypto coins like Litecoin and XRP*, accelerating that winter’s crypto fever.
For Dapper, those Ethereum problems were the inspiration to create a custom coin.
“We felt everyone was coming at crypto from a perspective of ‘currencies’ and ‘financial trading’ and that’s about it,” says Dapper Labs CEO Roham Gharegozlou. “We saw it as an application platform. That’s the root of Flow.”
The root of the NBA is more blocked shots than blockchain. But functional blockchain is right in the wheelhouse of Brooklyn Nets star Dinwiddie.
Brooklyn Net Spencer Dinwiddie has a growing portfolio of blockchain investments (March 8, 2020 … [+]
“It’s about transparency and liquidity,” says Dinwiddie. “If the ledger is public and you can see the transaction. You don’t have to believe in the parties, you just have to believe in the medium. And when you tokenize things, you have the ability to move this value around digitally, whenever. If that fits in your industry, if it’s valuable and it’s functional — those are the practical applications I’m trying to find.”
He may have found one in Dapper. Already the company says tests with a handful of users have yielded $2,000 dollar trades of rare LeBron James Top Shot cards, cards acquired for a fraction of that cost.
“This investment is a synergistic strategic relationship,” says Dinwiddie. “I have a team and we do our homework. It depends on the terms and the project itself. This is not just me writing a check.”
To be sure there are a lot of companies trying to take trading cards out of the bicycle spoke era. Bubblegum card king Topps says it sold $204,800 of “Garbage Pail Kids” digital cards using the WAX blockchain just last month. Take-Two Interactive (TTWO: NASDAQ)’s NBA 2K20 is riddled with collectable players and micropayments. It has sold 14 million copies — for $840 million dollars — and during the Covid-19-addled second quarter revenue from “cards” and tradeable players rose 126% year-over-year.
But it isn’t the NBA or memorabilia that inspires Gharegozlou — it’s the original promise of Bitcoin. More than anything, he sees the collectable market as proof that blockchain technology has a functional purpose beyond, well, collecting.
“Top Shot embodies the values behind crypto,” says Gharegozlou. “It’s the idea that the thing you own is truly yours and nobody should take it away from you. The idea that digital things should be permanent. And that developers should be able to build on top of them. These are very abstract concepts, very very hard for people to wrap their head around. With Top Shot, someone can walk off the street and in thirty seconds they have a crypto wallet, they’re trading crypto, they’re using a high-performance blockchain — and they don’t even know it.”
It could be a slam dunk.