With the rising popularity of NFT in the past couple years, the NFT marketplace has transformed from a niche market to become a multibillion-dollar global phenomenon. Promoted by a passionate, enthusiastic group of internet society and embraced by celebrities, it’s just a matter of time for big brands to launch their own NFT project. One such brand is the NBA with their NBA Top Shots.
Imagine a sport trading card market in which you can buy, sell, and trade sport cards. However, instead of physical cards, the products are highlights of NBA moments, and instead of in a public basketball court, the trade happened in a digital marketplace. That is essentially what NBA Top Shot is.
Like most NFT marketplace out there, a Top Shot is a blockchain based NFT trading platform. However, instead of an art trade, the system operates like your typical high school trading card deals, but instead of actual, physical cards, you are trading short videos known as Moments.
Moments video highlights minted as NFTs were created from reels licensed by NBA to a third-party company. Each Moments possess their own unique digital number indicating their rarity and authenticity.
Dapper Labs is a Canadian based blockchain company responsible for minting those NBA reels into NFTs. In fact, the Top Shot project itself is the output of a deal they made with the NBA back in July 2019. However, nothing of major concern happened until the 2021 season, when Jack Settleman, SnapBack Sports founder, arranged a purchase of LeBron’s iconic slam dunk for $47,500 just days after a Ja Morant highlight was sold for $35,000.
These fantastic numbers of sales resulted in Dapper Labs securing $305 million in private funding of which a portion of it came from former NBA players, including Michael Jordan, as well as active players including Kevin Durant, Kyle Lowry, and Klay Thompson.
Up until March 2022, the Top Shot project had rounded up about $7 million worth of sales. The head-turning sale of both Ja Morant’s and LeBron’s highlights leads to the platform witnessing more than $1 million in sales on a daily basis. In total, Top Shot has rounded up $500 million in sales with more than 800,000 accounts registered to the marketplace.
The value of a Top Shot is based on at least two things: rarity and scarcity, both are provided by Dapper Labs. Just like regular sport cards, Top Shot rarity and scarcity are interconnected and divided into several tier:
1. Common: making up 96.6% of all Moments, Common Moments has the biggest edition sizes in circulation. They are easy to get and widely available. In NBA’s own words, Common Moments are meant to be like basketball itself, a shared experience for fans around the globe.
2. Rare: with only 2.25% of total Moments in circulation, Rare Moments are more exclusive and not as widely available. Typical Rare Moments feature historic plays from NBA legends like shoulder shimmy three-pointers by Trae Young from the Eastern Conference Finals.
3. Legendary: the highest rarity, with only 0.11% of total Moments in circulation. The NBA designed this rarity to feature “only the best plays from the best players in NBA history…making them extremely coveted and special.” One such moment is Giannis Antetokounmpo’s mind blowing block in the NBA Finals.
4. Fandom: this rarity is like a special edition Moments designed to commemorate certain occasions, like the one Fandom tier sold during Las Vegas Summer League. However, when it comes to the amount in circulation, there are only as many Fandom Moments as there is demand for it.
Considering their 72% growth in January 2022 despite the crypto market showing signs of potential crash at the time, the short answer would be yes, Top Shot is still growing, both in terms of sales and popularity. As long as the NBA as a league is still active and popular, more highlights can be turned into Moments circulated in the marketplace.
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If we are talking about players featured in the Moments circulated on Top Shot marketplace, then the answer is uncertain, as new Moments could be created at any time featuring different active or retired players. In theory, every NBA player throughout history will enter Top Shot at some point if they have a memorable highlight during their professional NBA career. If that’s the case, then we’re talking about at least 4,000 players entering Top Shot if the NBA and Drapper Labs are willing to do so.
The top 10 biggest Top Shot sales to date features four different players: LeBron James, Fred Vanvleet, Zion Williamson, and Ja Morant. Out of the top ten sales, seven of them are LeBron James’s Moments. The King of NBA’s legendary slam dunk to the rim of Miami Heat during 2020 NBA Finals currently holds the title of the most expensive NBA Top Shot to date, valued at $230,023.
Interestingly, not all of them are Legendary Moments three of the top ten sales are of Common rarity. Fred Vanvleet’s three-pointer against the New York Knicks is the highest-valued Common Moments to date, cashing in at $140,190. The second highest Common Moments, valued at $110,623, is of LeBron James’s two-handed reverse windmill slam against Houston Rockets on February 6, 2020.
The highest valued Rare Moments is ranked as the 11th most expensive Moments to date. However, it’s actually the Rare-tier version of the aforementioned February 6, 2020 LeBron James’s slam dunk. It’s worth noting that with a $100,000 price tag, it is actually cheaper than the Common version.
NBA Top Shots might be a new marketplace, but it sure gained a lot of popularity and growth over a short time period. It is also one of the few marketplaces that’s actually growing amidst the recent crypto bubble burst, showing that the fans of the sport are as loyal as ever.