NBA Top Shot 2.0- Supplemental Piece
Additional issues solved and addressing concerns on changes
The last article was approaching a 40 minute read and 10,000+ words without being edited down and the last supporting sections moved here.
In this supplemental article I will be reviewing:
- Some of the weird things about being a collector on NBA Top Shot or any other sports NFT platform that are solved with the Sports NFT 2.0 model
- Embracing Change- addressing some of the concerns that are likely to come from making such a fundamental change to what those sports NFTs currently are to collectors and users.
Additional Top Shot Issues that the Sports NFT 2.0 Model Solves
1. “All I ever pull in packs is garbage! I have the worst luck.”
Luck has always been part of the equation in Top Shot. Who got a pack in the queue? Who pulls the #1 or jersey serial? Who pulled the star player in the drop? But when Dapper went to a blended/loot/gamble pack (whatever you want to call it) model, and it became about who would pull rares or legendaries at all, and who would just pull commons… it became way too much of the equation.
Instead of correcting the root cause that their ‘Collect Only One’ systems are capping demand, Dapper has clearly decided to (using another gambling analogy) double down. The thinking here is clearly “we can sell way more packs than people have demand for and still keep our Rares scarce if we just fill packs with commons no one wants and toss in a couple rares most people won’t hit.” This changed the calculus for users to become “Why try to level up your collection and contribute to the marketplace value of moments if some flipper can just gamble and hit a rare or legendary for the price of a common pack? Why not have that be me??”
Packs for users then become cycles of either:
1) Pay for slightly more expensive common pack, hit all commons, call Dapper greedy for pack price or whine you have bad luck, dump all your commons on the marketplace also to no one who wants them, repeat until you give up in frustration, OR
2) Pay for slightly more expensive common pack, hit a rare or legendary, sell it less than others can justify who paid full rare+ pack price or burned comparable value on player leaderboard, repeat until you turn into user 1
This pack revenue model sacrificed user satisfaction and a clear path to success for a little extra cash selling filler no one wants to gamblers.
So then most people develop this kind of reaction to the product over time:
It’s really hard to retain happy customers when you’re making 90% of them repeatedly feel like losers.
No more. The clear path to user success of TSS gated drops needs to come back. And if you’ve earned that right to reserve Rare or Legendary packs, that’s what you’ll pay for and that’s what you’ll pull- not some lucky gambler who proved there is no incentive to hold moments for faster than they can get to the listing page. And if you’re in the common queue that’s what you’re paying for and you’re happy with what you get.
With example pack prices of $599 for 89 legendary packs per week (99 minted — 10 awarded from burn leaderboards), $59 for 1,080 rare packs, and $5 for 10,800 common packs… that is a pack revenue of $225,540 per week or $11.79 million in annual pack revenue since you can continue it during the offseason with users favorite moments of retired players up for vote and sale. That needs to be enough for Dapper until demand can drive that price higher, without tricking their gambling addict customers into NFT scratch-offs until they give up in frustration.
2. Why are Playoff Redemptions so fun and popular every season, then as soon as the playoffs end we suddenly go back to forgetting they exist and being up in arms about the idea of two moments from a player minted in the same set?
If you watched along with the 2023 playoff series you’d debate “I wonder what Jimmy Butler’s moment from that series is gonna be?? Will it be a reel of that 57 point game or that final shot?” Because then users would see the moment minted a few days later and still be so excited to decide if they wanted to redeem for it, collect it on the marketplace, or hold the previous moment. Users would be collecting the moments everyone was actually talking about at the time! As a business, they were striking while the iron was hot.
Somehow it didn’t matter how many times the player was minted in the set. So then why as soon as the playoffs end, do the system designers pretend the system for redemptions doesn’t exist and prevent users from redeeming an earlier moment they bought in-series when demand drives minting a second one?
Speed to Market with the ability to redeem in cases of potential dilution from user demand for an additional moment to be minted is what makes this platform finally logistically able to be a true voice of fandom and basketball culture.
3. Quality Control Problems and Blunt Instrument Manual Operations
Dapper’s model for Top Shot engagement of drop challenges, master challenges, and flash challenges has always been a very manual model that requires teams of people to run and quality control because of its inherent inconsistency. This is how the flash challenge system needed to be managed (read the whole thing here if you want to laugh at the oblivious back-patting):
FastBreak still suffers from this problem. It’s endemic to the Dapper model for nightly engagement that begun with flash challenges: randomness and ‘finger on the scale’ utility that requires teams of people to devise each time, then quality control the outcomes, then rebalance off the data and complaints. It sacrifices buyer confidence in consistent future utility for the much lower headcount that could come with repeatable process automation.
The 2.0 model instead works like:
- Every player voted for a new moment gets a burn leaderboard for 10% of its supply, no exclusions. Every prior moment for that player can be burned to place based on TSS, no exclusions.
- Every player that would be minted in the base set in prior years gets a locking leaderboard reward: same mint count, same parallels for the same placements, the market decides the price to lock to place on it. These are staggered just like they would be in minting the base set.
- Weekly crafting reward requirements stay the same for every player: burn one rare from that player, burn 10 of any of that player’s commons, burn 10 of any current series common. First 500 to place requirements into the same burn hold system that burn leaderboards run on have those moments burn and they receive the moment /500, those in progress receive their moments back. Code it, not a bunch of manual spreadsheets doing it.
That’s it. Repeatable processes + consistency in utility that creates buyer confidence and ongoing demand drivers for the business from churn… all with probably a quarter of the headcount required from the manual mistakes and constant evaluation and tweaking needed with the 1.0 engagement systems.
4. Remember the Play policy controversy: “Dapper employees are going to be allowed to collect moments, how horrible!” Do you remember why that was a controversy?
Because users knew the product was built in a way where users never knew what moments would be required for a challenge, which sets were going to be rewarded with utility and which not, what moments would be allowed for a burn on a leaderboard (or Playbook challenge for All Day)… so basically which moments would suddenly be valuable. Dapper having inside knowledge of those plans made their ability to play that pump & dump game unfair. This is one of the wins of the move from Flash Challenges to FastBreak.
You may say this problem is gone already with the move from flash challenges random requirements (The Wheel… shudder) to the FastBreak system, but it’s not completely gone. Dapper is still randomly deciding which stat you’ll need each night in FastBreak, and how many to hit the threshold so it can directly manage that not too many people are winning too easily. It is still playing games with what moments it will decide to allow or exclude from burning for burn leaderboards. Sometimes it allows only legendaries or MGLEs for that player, sometimes any rare+ for that player. With the burn leaderboards for packs it’s even weirder:
If these players being the only ones allowed to have burn utility seems random, read here. It’s a complicated logic but just another part of their systems that make no sense on the surface to a user until you realize it is required to prop up some other “collect only one” system, in this case values for game pieces for FastBreak in a revenue system that will dilute that value over time.
They need to throw this whole concept out of random unexpected utility due to Dapper’s finger on the scale. It never should have been there to begin with. It created the weird dynamic that saw users mad at Dapper employees for wanting to use the product and it diminishes trust. Burn leaderboards need to now allow any moment for that player being released to be burned. Period. No changes, consistent.
5. “Scarcity Inflation”- the situation where Dapper is continually forced to shrink the mint size of new moments (and their revenue) to hopefully be more desirable to a non-growing user base or demand.
Scarcity Inflation is an issue necessitated even more by stubbornly clinging to “collect only one of a player for utility” models used previously in flash challenges and currently in FastBreak that limit demand, then being surprised when the market responds like it is saying “why would I want any more of this player, I already have the one that I need?” Instead of letting go of the systems that drive that market behavior, Scarcity Inflation is an attempt to make newly minted moments more scarce each series, thereby generating demand at the expense of your prior holdings by making them look worse to hold by comparison.
The problem with Scarcity Inflation is that it’s like the “Red Queen Theory” of evolution- where in Alice and Wonderland, the Red Queen commanded Alice to keep running to be able to stay in the same place. If you’ve made MGLEs be /499 in an effort to generate demand by making them look better than the previous /699s, well then next year you need to mint and sell only /399 to make them look better than the /499s, then /299, and so on and so on until you can’t sell anything.
It is the other side of the coin to the over-minting issue that Eric “The Collectibles Guru” Whiteback described above: making mint counts higher to sell more when demand is high, instead of raising pack prices to ensure the moments sold retain their collectability over time.
A much healthier model is where mint counts remain consistent series over series, Dapper raises or lowers the prices as demand changes, demand-limiting utility systems that reward ‘collect only one’ are gone, and instead direct utility only exists to reduce circulating supply of old moments. Dapper could then stop limiting new mint counts to generate interest (and limiting the pack revenue it can generate in the process) since users will still consistently have demand for new moments:
1) because crafting will require burning the current series along with old moments
2) because they’re the most affordable for crafting due to increased scarcity of old moments over time
3) to in time see THOSE new moments slowly increase in value due to burn to earns
Embracing Change and Addressing Potential Concerns
When implementing such an enormous fundamental change to what the product is, there are bound to be some concerns. So let’s take a minute to go over some of those potential ones:
“The product is fine! Why do you have to go complaining just because it’s not specifically the product that you want it to be?”
Because it’s not fine. The market cap trend proves it. Thinking that moments themselves are cool or that the tools on a platform in a vacuum are fun to use does not mean the product-market fit is effective for a well functioning economy or its addressable market. The long-term market cap proves that.
Not overleveraging yourself expecting to get rich quick is one thing, but saying “Top Shot is fun if you only throw a couple bucks into it” or worse “I expect to lose money here because it’s just so fun” is an economic failure driving users away over time. It’s unnecessary to give up on the economy to hold in this way because of a lack of understanding in system dynamics and economics.
“Fandom moments again? Yuck! That was a huge failure and I stopped reading after you mentioned that. This will never work.”
That’s because they had how a fandom tier should work backwards. It was almost as if their economist forgot that moments have value inversely tied to mint count, where the more people who completed the challenge and received the reward- the less valuable that reward would be. Almost like they thought flash challenge rewards were being earned by the biggest “fans” instead of just the users stuck holding or willing to buy the most random unrelated stuff.
Flipping it backwards to ‘the most popular by vote is minted to the lowest mint count’ fixes all of these mistakes and correctly connects popularity of the moment itself to its likely value in the marketplace.
And when utility doesn’t need to be an unsustainable ‘collect only one’ model of compelling users to collect what they don’t otherwise want that immediately dilutes previous holders of that player, new supply isn’t quite so scary.
“But now everyone who wanted my moment in the future will go for that second cheaper new moment and the value of mine will plummet.”
That’s not how that would work in practice. Because opening a burn window for a player repeated in the set means some of that first minted moment in the set would be consumed to earn the newest one, making less sellers who don’t want to hold the first moment to compete with.
On top of that, this model leans much higher into driving user demand to lock and burn by returning crafting, making locking rewards accessible but scalable, and opening more players and their moments up to burn utility. The goal is to constantly incentivize churning the supply of moments used for utility.
“How is anyone supposed to win here if you put up all these TSS gates to getting good packs and I can’t get lucky with blended packs anymore?”
Support the marketplace to level up and stop trying to extract it for cheap, then just dumping to repeat. The systems here should support it being a functioning collectibles economy and that’s how you “win”, not by this being a casino. Next question.
“All this refocusing on TSS is just more handouts for the whales and OGs. I like that people can come in from day one and get lucky.”
Handouts of one common moment per year for keeping moments of that player locked? I think we’ll all survive if it means a logical and accessible onramp to new users being rewarded to collect the players they actually like. The existing Top Shot model awards rares and legendaries to top users even if they are dormant accounts. In addition, making the more destructive process of burning the more accessible reward to earn is extremely backwards for how you should ease a user into the product.
The big rewards in this new Top Shot 2.0 model are for burning, and in that case TSS is ‘use it or lose it’ which would now be realigned to value measured by “what is the current rolling median sales price of moments you hold?” putting all holders on equal footing, instead of the old “your moment is valued at what it was when you got it (or at the start of TSS snapshot)” that makes OGs uncatchable.
“Locking Leaderboard rewards that aren’t that scarce have proven almost worthless, those Clamps moments at the 1125 mint are sitting at $3. Why would anyone want more of those? Scarce rewards for the top positions is the only thing that will drive locking.”
This complaint is the opposite of the one above and it has a few problems with its argument. First, a new user that is actually a fan of that player or team would like earning a $3 moment for getting into locking them. It also ignores why those Clamps moment /1125 have dropped in value to $3. Top Shot needs to remember that its systems don’t exist in a vacuum: if you reward users to lock by rewarding them a common non-player team moment then you build a daily engagement game for free packs game that excludes the use of those team moments… you have directly caused their value to tank.
Similarly when you apply game rules that say users only need one common moment to play, you cause the supply of hundreds of thousands of minted commons to suddenly compete for the same utility from only 5,000–10,000 active users. So of course adding an additional common /1500 is not needed. That reward has no value to those users, so the pro-marketplace activity of locking would not successfully be encouraged. It has been undermined by a different system whose designers appear to not be working with each other toward a larger economic strategy. Anything that undermines the marketplace in this way needs to be gone.
“I’m a long-term collector. Doesn’t all this refocus on only the most recent moments push users toward the shiny new thing even more than they do now?”
Yes. And for a good reason. I think of myself as a long-term collector as well, and even I know this has to happen.
Long-term collecting should NOT be directly rewarded on Top Shot, at least definitely not the way Dapper is currently by randomly airdropped rares and legendaries to possibly dormant accounts. Doing it this way is rewarding top accounts to buy once then reap dividends forever. It doesn’t keep the lights on for Dapper as a business. But utility gaming doesn’t keep the lights on either; it seeks to spend as little as possible min/maxing it’s return (look up the actual definition of “rent-seeking”) and be rewarded for its engagement vs economic contribution.
Direct rewards here need to go for users for ongoing economic contribution. For example, long-term holding should be rewarded with a high total TSS allowing the user the ability to enter and buy higher tier pack queues. If they win and secure the pack, paying for those new moments is the ongoing contribution to the business’ revenue. And you can’t incentivize building and retaining that high TSS if the user is going to get unlucky in a pack to some flipper who’s proven they don’t hold moments for longer than they can get to the listing screen.
Directly earning moments works better to reward the ongoing reduction of supply, and to indirectly reward long-term holding with reduced supply in time. Doing so is the only way to truly incentivize users to chase new moments. It’s the best carrot to dangle. And it’s harder to make users burn their old moments to chase new moments if those new moments aren’t even really new. But if users are chasing new moments by burning the old, those that chose to hold the old moments are indirectly rewarded over time through increased scarcity.
To directly reward long-term holding for only those at the top (if they’re lucky) and leave everyone else out is incredibly off-putting to new users or any new locking. Dapper had it completely backwards. Just as backwards as it is to directly reward new moments to those who spend once for as cheaply as they can without reducing any of the new supply their game is generating and running on.
The 10 Commandments of sports NFT system design should be:
1) Utility drives ongoing demand
2) Best rewards are tied to ongoing supply reduction
3) Rewards are clearly and consistently tied to the player the user collects. Fandom in one player is not abused to compel users to collect some other player they do not like
4) Utility measurement systems do not systematically reward older users or older spend over new users and new spend
5) That utility measurement system resists manipulation
6) User demand drives minting decisions
7) New supply minted always removes old supply for that player
8) Players are not excluded at Dapper’s whims from getting utility that other player’s do
9) Luck is not what gets users ahead and they are not manipulated into gambling to get ahead- the clear path to success is through collecting
10) No additional utility system is thrown in that does not directly support the others, or it undermines them all
