NFT Revolution: NBA's "Top Shop" Token Marketplace Rakes in $230M in Sales
- NBA's non-fungible token (NFT) trading 'packs' have been selling out like hotcakes.
The same company that started the CryptoKitties craze is at it again: Dapper Labs, creator of nun- Fungible Fungible Fungibility is a term that describes how interchangeable a certain asset is with other assets of the same kind.If an asset is fungible, one unit of that asset is interchangeable with another unit of that asset. Of note, fungibility differs from liquidity. A good is said to be liquid if it can be easily exchanged for money or another good. However, a good is fungible if one unit of the good is substantially equivalent to another unit of the same good of the same quality at the same time and place.By this analog, money is considered to be fungible. For example, one $20 banknote is interchangeable with any other authentic banknote like it.It is also interchangeable with two $10 banknotes, or twenty $1 banknotes, or any other combination of banknotes and coins adding up to $20. Fungible Versus LiquidSimilarly, different issues of a government bond are also fungible, which may have been issued at different times. This is only if these issues carry precisely the same rights and any of them is equally acceptable in settlement of a trade.Fungibility does not imply liquidity, and vice versa. Certain commodities such as diamonds for example can be readily bought and sold. However, while the trade is liquid, individual diamonds are unique and not interchangeable. Cryptocurrencies are often considered to be fungible assets, as one coin is equivalent to another. However, a notable exception occurred after a major breach in Japanese exchange Coincheck, during which token developers for cryptocurrency NEM added a special flag to hacked coins to indicate they are not to be traded or used. Fungibility is a term that describes how interchangeable a certain asset is with other assets of the same kind.If an asset is fungible, one unit of that asset is interchangeable with another unit of that asset. Of note, fungibility differs from liquidity. A good is said to be liquid if it can be easily exchanged for money or another good. However, a good is fungible if one unit of the good is substantially equivalent to another unit of the same good of the same quality at the same time and place.By this analog, money is considered to be fungible. For example, one $20 banknote is interchangeable with any other authentic banknote like it.It is also interchangeable with two $10 banknotes, or twenty $1 banknotes, or any other combination of banknotes and coins adding up to $20. Fungible Versus LiquidSimilarly, different issues of a government bond are also fungible, which may have been issued at different times. This is only if these issues carry precisely the same rights and any of them is equally acceptable in settlement of a trade.Fungibility does not imply liquidity, and vice versa. Certain commodities such as diamonds for example can be readily bought and sold. However, while the trade is liquid, individual diamonds are unique and not interchangeable. Cryptocurrencies are often considered to be fungible assets, as one coin is equivalent to another. However, a notable exception occurred after a major breach in Japanese exchange Coincheck, during which token developers for cryptocurrency NEM added a special flag to hacked coins to indicate they are not to be traded or used. Read this Term tokens extraordinaire, signed on last year to help National Basketball Association (NBA) to create a non-fungible token (NFT) set of its own. Recently, the NBA’s NFT marketplace announced stunning sales figures: buyers have purchased more than $230 million worth of NFT goods.
However, CNBC reported that the packs have become so popular that they are almost always sold out. This was also true at press time. There were packs available for pre-order, but all previously available packs were sold out. As such, most of Top Shot’s revenues come from secondary market sales in its marketplace. Notably, a LeBron James game highlight recently sold in this secondary market for $200,000; a Zion Williams highlight sold for 'a little less than that'.
Bringing Old-School Sports Trading Cards into the Modern World
NBA Top Shop’s eye-popping sales figures are part of a much larger trend for the NFT space. CNBC previously reported data from a study by NonFungible and L’Atelier that found the total value of NFT transactions quadrupled last year, reaching past $250 million.
During the same time period, the number of digital wallets trading them almost doubled to over 222,179. NBA Top Shop has been one of the largest contributors to the rise of NFTs.
Nadya Ivanova, L’Atelier’s Chief Operating Officer, said at the time that: “we’re seeing a new generation of traders within the NFT market; people who are digitally native looking for digital native asset classes outside of established asset markets. These are people who have amassed reputation and wealth and want to invest it in purely virtual assets like NFTs.”
Mark Cuban, the owner of the Dallas Mavericks, explained that he sees the NFT marketplace as a modern-day iteration of the sports trading card craze. However, unlike paper trading cards, buyers do not need to worry about the risk of physical damage or theft. “And, the value is still set by the same laws of supply and demand,” he wrote on his blog in January.
“One of the Things That Have Defined the Digital Era Is We’ve Moved from a World of Scarcity to a World of Abundance with All Kinds of Media Assets and Products.”
The marketplace is a new source of revenue for the NBA, though it is not clear exactly how much cash the league earns from the trades.
However, Tom Richardson, a digital media professor at Columbia University, told CNBC that the league can expect to solicit 10% to 15% of sales from any company that leverages its intellectual property. Additionally, Richardson previously served as the Head of Publishing at the National Football League.
“One of the things that have defined the digital era is, we’ve moved from a world of scarcity to a world of abundance with all kinds of media assets and products,” Richardson explained.
However, “the thing that defines the trading card business is a physical scarcity of the cards. So, (Dapper) created these NFTs with the idea of scarcity combined with authenticity because of the way the blockchain works.”
Moreover, the NFT trend has expanded beyond the world of sports. CoinTelegraph reported that: “NFTs are beginning to permeate the creative arts:” A digital NFT art platform called Async Art recently secured $2 million in seed investment capital.
Several hours before press time on Monday, Binance Chief Executive, Changpeng Zhao tweeted that: “#crypto will unlock the true commerce potential for arts and culture globally. #NFT”
#crypto will unlock the true commerce potential for arts and culture globally. #NFT
— CZ 🔶 Binance (@cz_binance) March 1, 2021
The same company that started the CryptoKitties craze is at it again: Dapper Labs, creator of nun- Fungible Fungible Fungibility is a term that describes how interchangeable a certain asset is with other assets of the same kind.If an asset is fungible, one unit of that asset is interchangeable with another unit of that asset. Of note, fungibility differs from liquidity. A good is said to be liquid if it can be easily exchanged for money or another good. However, a good is fungible if one unit of the good is substantially equivalent to another unit of the same good of the same quality at the same time and place.By this analog, money is considered to be fungible. For example, one $20 banknote is interchangeable with any other authentic banknote like it.It is also interchangeable with two $10 banknotes, or twenty $1 banknotes, or any other combination of banknotes and coins adding up to $20. Fungible Versus LiquidSimilarly, different issues of a government bond are also fungible, which may have been issued at different times. This is only if these issues carry precisely the same rights and any of them is equally acceptable in settlement of a trade.Fungibility does not imply liquidity, and vice versa. Certain commodities such as diamonds for example can be readily bought and sold. However, while the trade is liquid, individual diamonds are unique and not interchangeable. Cryptocurrencies are often considered to be fungible assets, as one coin is equivalent to another. However, a notable exception occurred after a major breach in Japanese exchange Coincheck, during which token developers for cryptocurrency NEM added a special flag to hacked coins to indicate they are not to be traded or used. Fungibility is a term that describes how interchangeable a certain asset is with other assets of the same kind.If an asset is fungible, one unit of that asset is interchangeable with another unit of that asset. Of note, fungibility differs from liquidity. A good is said to be liquid if it can be easily exchanged for money or another good. However, a good is fungible if one unit of the good is substantially equivalent to another unit of the same good of the same quality at the same time and place.By this analog, money is considered to be fungible. For example, one $20 banknote is interchangeable with any other authentic banknote like it.It is also interchangeable with two $10 banknotes, or twenty $1 banknotes, or any other combination of banknotes and coins adding up to $20. Fungible Versus LiquidSimilarly, different issues of a government bond are also fungible, which may have been issued at different times. This is only if these issues carry precisely the same rights and any of them is equally acceptable in settlement of a trade.Fungibility does not imply liquidity, and vice versa. Certain commodities such as diamonds for example can be readily bought and sold. However, while the trade is liquid, individual diamonds are unique and not interchangeable. Cryptocurrencies are often considered to be fungible assets, as one coin is equivalent to another. However, a notable exception occurred after a major breach in Japanese exchange Coincheck, during which token developers for cryptocurrency NEM added a special flag to hacked coins to indicate they are not to be traded or used. Read this Term tokens extraordinaire, signed on last year to help National Basketball Association (NBA) to create a non-fungible token (NFT) set of its own. Recently, the NBA’s NFT marketplace announced stunning sales figures: buyers have purchased more than $230 million worth of NFT goods.
However, CNBC reported that the packs have become so popular that they are almost always sold out. This was also true at press time. There were packs available for pre-order, but all previously available packs were sold out. As such, most of Top Shot’s revenues come from secondary market sales in its marketplace. Notably, a LeBron James game highlight recently sold in this secondary market for $200,000; a Zion Williams highlight sold for 'a little less than that'.
Bringing Old-School Sports Trading Cards into the Modern World
NBA Top Shop’s eye-popping sales figures are part of a much larger trend for the NFT space. CNBC previously reported data from a study by NonFungible and L’Atelier that found the total value of NFT transactions quadrupled last year, reaching past $250 million.
During the same time period, the number of digital wallets trading them almost doubled to over 222,179. NBA Top Shop has been one of the largest contributors to the rise of NFTs.
Nadya Ivanova, L’Atelier’s Chief Operating Officer, said at the time that: “we’re seeing a new generation of traders within the NFT market; people who are digitally native looking for digital native asset classes outside of established asset markets. These are people who have amassed reputation and wealth and want to invest it in purely virtual assets like NFTs.”
Mark Cuban, the owner of the Dallas Mavericks, explained that he sees the NFT marketplace as a modern-day iteration of the sports trading card craze. However, unlike paper trading cards, buyers do not need to worry about the risk of physical damage or theft. “And, the value is still set by the same laws of supply and demand,” he wrote on his blog in January.
“One of the Things That Have Defined the Digital Era Is We’ve Moved from a World of Scarcity to a World of Abundance with All Kinds of Media Assets and Products.”
The marketplace is a new source of revenue for the NBA, though it is not clear exactly how much cash the league earns from the trades.
However, Tom Richardson, a digital media professor at Columbia University, told CNBC that the league can expect to solicit 10% to 15% of sales from any company that leverages its intellectual property. Additionally, Richardson previously served as the Head of Publishing at the National Football League.
“One of the things that have defined the digital era is, we’ve moved from a world of scarcity to a world of abundance with all kinds of media assets and products,” Richardson explained.
However, “the thing that defines the trading card business is a physical scarcity of the cards. So, (Dapper) created these NFTs with the idea of scarcity combined with authenticity because of the way the blockchain works.”
Moreover, the NFT trend has expanded beyond the world of sports. CoinTelegraph reported that: “NFTs are beginning to permeate the creative arts:” A digital NFT art platform called Async Art recently secured $2 million in seed investment capital.
Several hours before press time on Monday, Binance Chief Executive, Changpeng Zhao tweeted that: “#crypto will unlock the true commerce potential for arts and culture globally. #NFT”
#crypto will unlock the true commerce potential for arts and culture globally. #NFT
— CZ 🔶 Binance (@cz_binance) March 1, 2021