NBA Top Shot, one of the sports’ newest and biggest trends, is extremely confusing. It’s a mix of cryptocurrency, blockchain, collectibles, non-fungible tokens and other words that sound made up.
The technology platform cleared more than $230 million in transactions and has become a viable way to make money for a very small set of crazed fans.
The best way to explain to describe the NBA Top Shot as online trading cards. Instead of a piece of cardboard with a picture on it, it’s a video on a website you keep in a profile.
You buy packs, just like packs of cards. The packs have three cards in them, and they range from $9 to $230 (and eventually $999).
There are three levels of cards: common, rare, legendary. It also features various other versions of cards like gold, metallic and holographic that you see with regular trading cards.
The type of card and rarity determines the value.
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Dapper Labs, which runs NBA Top Shot, mints a certain amount of each card. For instance, a legendary card could have 49 mints, while a common card has more than 12,000 or 15,000.
The value isn’t in the card itself but in the serial number.
Because Top Shot creates a scarce amount of cards, owning the serial number of the card is where the value lies. If only 49 of something exists in the world, it’s rare and goes up in value.
Of course, much like trading cards, value is created based on what people are willing to pay for it.
If you have no interest, it has no value. But more than 200,000 people have signed up for NBA Top Shot. Also, one NBA Top Shot card, a LeBron James dunk, sold for $208,000.
There is real money being exchanged. A lot of it. There are 24-hour periods where NBA Top Shot has done something like $40 million in transactions.
Packs are extremely limited and come out in announced “drops” randomly.
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On average, there are about 5,000 packs available with nearly 200,000 people wanting one. Those people get into a line, and it’s extremely hard to get one.
Recently, Top Shot tried to give everyone a pack by opening a four-hour window where everyone gets a pack in two weeks if they get into a line. More than 200,000 people signed up.
If you can’t get a pack, you can buy moments in the marketplace. For Rockets fans, that means getting a video of a David Nwaba dunk could cost you $20 or more. There is a James Harden moment that sold for more than $39,000.
Dapper Labs, which runs NBA Top Shot, believes it’s the future of trading cards. Their next step is historic moments.
Top Shot has a deal with the NBA, the NBA Players Association, and importantly the NBA Retired Players Association, meaning a play like the Mario Elie Kiss of Death could become a Top Shot at some point.
The biggest source of frustration, aside from how difficult it is to get a pack, comes from the withdrawal process. Since NBA Top Shot is still in the beta stage, and it can take up to three weeks to get permission to withdraw your money.
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For people looking for a quick buy and flip, the lack of withdrawal permissions hurts that.
As far as staying power, Dapper Labs hopes that the immersive experience of video highlights keeps fans involved for years, much like trading cards have.
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