NBA Top Shot Solidifies the NFT Use Case With Over $500 Million in Revenue
If you asked a traditional sports card collector a few years ago if a blockchain-based digital sports card would be successful, they would have probably laughed in your face. They might say, “Who would want to buy a digital sports card? Why would anyone want a digital collectible in the first place?” They would have talked about the history of the cards, the physicality of owning a verifiably rare piece, and so on, and at the time, they would have been correct.
Sports card companies like Panini were releasing digital blockchain cards of top players in regular basketball card packs, but they weren’t getting any traction. It was not until NBA Top Shot released, reimagining what sports card collectors would expect from a digital variation, for this idea to become successful. NBA Top Shot is the all-time leading NFT product by sales volume, generating over $500 million in sales since its inception through the release of digital card packs containing short video clip ‘moments’ of players from the NBA. In collaboration with the NBA and NBAPA, NBA Top Shot is the top player in the NFT movement and a project that has proven the efficacy of NFT digital collectibles as a whole.
Dapper Labs Sets the Market Standard Yet Again
NBA Top Shot is an idea from the minds behind CryptoKitties, the first viral NFT game to hit the market. At its peak, CryptoKitties represented almost 25% of all transactions taking place on Ethereum, making it an international sensation. After the problems CryptoKitties experienced with high fees caused by overloading the network with transactions, they created a more functional blockchain to better handle their applications, Flow. With Flow, users can quickly and seamlessly navigate all their NFT games and collectibles, with the user experience upgraded to feel more like a traditional online game than the relatively clunky blockchain alternatives currently on the market.
With NBA Top Shot, Dapper Labs was looking to target a different, more traditional market, one that will value provenance, celebrity, fandom, and real-world fun over digitized cats. They received a lot of support and investment to launch NBA Top Shot, but it was a new concept that no one truly knew how the market would react to.
Starting Off Slow, Then Getting Remarkably Hot
NBA Top Shot launched towards the end of 2020, right as the latest cryptocurrency bull run was beginning to commence, but it took a few more months to reach high levels of mainstream adoption. This low initial user interest led to the first series of cards to reach higher and higher prices as more users entered the market, with the most sought-after moments running six-figure price tags. More users were beginning to understand the capabilities and collectible aspects that NFTs brought forth, and this was compelling amongst a growing number of cryptocurrency speculators and traditional sports card collectors alike.
What started off with packs and individual moments selling for a few dollars turned into an all-out frenzy, with now over 12 six-figure sales in the last three months, including an all-time high sale of a Lebron James moment for a hefty price tag of almost $210,000. After the mania began, many users were pulled into the application by the potential money-making opportunities, but started to enjoy NBA Top Shot for the collectible hobby it is, keeping users for the long term.
This rapid success caused many celebrities and other sports organizations to take notice, and now there is a new race of sports leagues looking to create their own collectible moments. We have now seen a baseball version launched in collaboration with Topps, one of the preeminent sports card brands, and a Dapper Labs collaboration with the UFC, one of the fastest-growing sports organizations globally. If CryptoKitties are the Beanie Babies of NFTs, then NBA Top Shot is the sports cards of NFTs, and with the sports card market projected to hit an almost $100 billion valuation in 2027, they present a viable option for anyone looking to get involved.
What Does This Mean for the NFT Market in General?
It’s undeniable that some of the volume and interest was spurred by greed, as users saw a brand new opportunity for quick flips of sought-after (and even not sought-after) NBA Top Shot moments. Although the excitement and prices have slowed down somewhat, the hype surrounding these NFTs attracted many from outside of the blockchain and cryptocurrency worlds, bringing in basketball fans, collectors, speculators, gamblers, and more who wanted to test the waters of an innovative take on sports cards. Three million transactions later, NBA Top Shot is the current king of NFTs, outselling CryptoPunks by over $100 million, the historically significant first NFTs ever produced.
The fact that NBA Top Shot can bring in so many fans from outside the traditional cryptocurrency industries speaks volumes to the potentials of NFTs as a new technology and asset class. Basketball is a sport beloved internationally, but collectors make up a much smaller portion of this fan base, which still came out in massive droves to get in on the action. With the official open launch of NBA Top Shot taking place in October 2020, the application has generated a staggering amount of sales in less than one year since its inception.
NBA Top Shot proves an important use case around NFTs, one which shows real-world connection, collectability, and interest in verifiably unique and scarce digital collectibles. NBA Top Shot may be plateauing as short term interest wanes and only the true collectors stay, but it shows the colossal interest that the world has in digital assets, paving the way for organizations of all types to continue to utilize NFTs in the future to connect with their users, fan bases, and network of supporters.
