Why is NBA All in Web3?

With a pool of savvy athletes, tech giant owners, and a vibrant sneaker culture, basketball is primed for the implosion of the NFT project.

Why is NBA All in Web3?

When Spencer Dinwiddie was drafted to the National Basketball Association in 2014, he said players’ locker room conversations were usually lighthearted. “It’s usually just talking about girls, luxury cars and stuff,” he said on a Zoom call. But that started to change about five years ago as players became more financially savvy than ever. Suddenly, started advising on their stock portfolio and talking about venture capital funds.

This past season, things took a step further. Dinwiddie said: “It’s boring apes, NFTs and digital assets.”

Dinwiddie’s observation is correct: In fact, the Web3 project has permeated the league’s culture to a degree that remains unrivaled in professional sports. Dinwiddie himself has made several such moves, including an attempt to turn his own NBA contract into a tokenized digital asset. Most recently, he co-founded Calaxy, an open-source platform — a combination of “Creator’s Galaxy” that allows influencers and entertainers to monetize their work, likenesses and brands using blockchain-powered social tokens .

“We call it Web 2.5,” said Dinwiddie of the Dallas Mavericks. “It’s designed with a lot of Web2 look and feel, but it’s all based on Web3.”

Dinwiddie is one of many current and former NBA players pursuing Web3 adventures off the court. LeBron James, Michael Jordan, Steph Curry, Josh Hart, John Wall, and Baron Davis are just some of the names of the major basketball stars behind recent NFT collaborations. The NBA as a league as well as individual franchises are following suit, offering their own NFT collectibles that often come with exclusive perks and rewards.
While almost every major league has tried NFTs and other Web3 attempts, none have come close to widespread adoption across the NBA. Unlike other commodity products, digital assets provide leagues with unique access to the secondary market, earning transaction and sales fees after the first purchase of their licensed products.

While economic gains may be a key driver, other major leagues have the same opportunity to profit. So why is the NBA and its players so far down the adoption curve? The answer depends on who you ask the question to.

Players are free to express themselves and follow their striving spiritual leaders

Dinwiddie believes it has a lot to do with the autonomy of NBA players compared to other professional athletes. While some leagues strictly limit what players can do during their contracts, the NBA has a reputation for being relatively hands-off in this regard. “Whether it’s exploring new technology or empowering players, the NBA tends to be one of the more progressive organizations,” he said. “They let their players speak out on social issues and speak more openly about their entrepreneurial efforts than any other league.” Most notably, in 2020, George Floyd and Breonna After the murder of Breonna Taylor, NBA players put some (pre-approved) civil rights slogans on their jerseys and wore “Black Lives Matter” T-shirts on the sidelines and during warmups. That same year, Colin Kaepernick knelt in protest during the national anthem.

Another major factor, according to Dinwiddie, is the power of role models, the current crop of NBA players growing up with idols.

“LeBron James was the first NBA billionaire; Magic Johnson was a successful businessman; Kobe Bryant, for example, started using the BodyArmor,” he said. “We knew our careers were limited, we knew we could do a lot of things [with our money] like parties or whatever, but Kobe made $400 million from a $6 million investment in BodyArmor sounds like Isn’t it cool?”

One of the most successful early NFT projects is related to the NBA

Another major turning point was the partnership in 2019 between the NBA, its Players Association and Vancouver-based blockchain developer Dapper Labs. This partnership resulted in NBA Top Shot, an NFT marketplace where fans can buy, sell and trade noteworthy digital clips of NBA moments.

Like traditional basketball cards, fans can purchase “packs” of various Top Shot moments — giving them sole (albeit limited) ownership of the video clips. While most are worth a few dollars or less, some top-of-the-line packs are selling for six figures.

Dinwiddie said: “Dapper Labs, NBA Top Shot, this is a catalyst, a major inflection point that validates the advancement of this technology in the minds of many NBA players.”

The NBA cemented its reputation for experimentation and innovation during the Covid-19 pandemic, when it plunged the entire league into a technology-intensive closed “bubble.” The venue, located at Disneyland in Orlando, Florida, uses new technology to keep the virus out of its doors and allow fans to remotely view screens around the stadium during games. It was this embrace of new technology and the league’s reputation as a trailblazer and risk taker that ultimately inspired Dapper Labs to enter the NBA ahead of other major leagues.

Jennifer van Dijk, senior vice president of sports partnerships at Dapper Labs, said: “As a digital forward organization, they are very open to exploring with us, which is critical to the solid foundation we build for Top Shot and the community.” , adding Said professional basketball players are also known for being active on social media. “NFTs take the relationship between players and fans to the next level, as athletes can interact directly with fans through the communities built around these digital collectibles.”

Within eight months of launch, NBA Top Shot had 1 million users and more than $700 million in sales. In its first year, Dapper Labs was valued at over $7.5 billion. Soon, “Top Shot” became a buzzword among NBA players and fans, shorthand for a game worth watching. In total, NBA Top Shot processed more than 25 million transactions, with total sales exceeding $1 billion, according to van Dijk.

“We think it has potential, but I don’t think anyone is fully prepared,” said Matt Holt, head of NBA merchandise partnerships. “Top Shot is one of the early pioneering projects in the history of the NFT space.”

However, Top Shot’s meteoric rise was soon followed by an equally dramatic collapse, with sales plummeting 68% between April 2021 and April 2022. NFT transactions fell to a 12-month low in July from $12.6 billion in January, while the 2022 peak was just over $1 billion last month. However, Holt said the alliance is not too concerned about the wild swings in the NFT market. “It didn’t affect any long-term plans,” he said. “Most of this technology and most of these products are only a year old, and that’s some growing pains and some volatility.”

The sudden drop in value and transaction volume has caused disruption and delays to some NFT projects within the NBA. For example, the Golden State Warriors’ 2022 championship collection is selling for a fraction of what the team has in its less-than-successful campaign in 2021.

Holt added that despite the recent crash, Top Shot’s meteoric rise has helped NFTs go mainstream, generating widespread awareness and validating the market, at least among NBA fans.

NBA fans are already trading digital assets — including sneakers

Another factor driving the rise of Web3 technology among NBA fans, according to Holt, is the video game culture surrounding the league. He explained that there have been recent partnerships with games like Fortnite, Horizon Worlds and NBA All World (with Pokemon Go creator Niantic) — not to mention NBA 2K and NBA All World franchises — to create digital deals An asset that creates a certain level of comfort among fans.

“If you enjoy playing NBA 2K on Xbox or NBA All World on mobile, I think it’s natural to transition to something like NFTs or digital trading cards,” he said. “Digital collectibles are a very important part of our video game business, and Top Shot is just a new, fun, emerging area for fans to interact with the NBA and players.”

When the league and its players became synonymous with another game-inspired product, many basketball fans today have grown up too: sneakers. What started with Michael Jordan’s 1985 collaboration with Nike’s iconic Air Jordan has grown into a strong “sneakerhead” community that remains closely tied to the NBA.

“I do see a shift from sneaker collectors to NFTs, I post in several NFT/sneakerhead chat groups that we’re collecting NFTs and sneakers, so there’s definitely an overlap,” said Josh Ong, who founded Web3 Consulting Agency Bored Room Ventures.

For sneaker enthusiasts, Ong explained, the physical product is often seen as a collection of merchandise rather than something that will actually be worn on the foot. In fact, Ong says the market has become so developed that deals can be made before sellers even have a chance to get their hands on the shoes.

“If I buy a sneaker, but never own it, and I sell it, do I buy and trade digital goods or physical goods?” Ong asked. “As the world becomes increasingly digital, the lines between physical and digital collectibles are starting to blur.”

“It’s our fans and our culture, we’re used to that, we’re used to doing things differently, we’re used to trying to snatch Michael Jordan’s exclusive new shoes, that’s how our demographics work,” Dinwiddie said. Way.”

Tech billionaires are buying NBA teams

Ong has another theory for why the NBA is embracing NFTs more than other leagues, which he believes comes down to high-level decision makers.

Specifically, Ong cited a generation of franchise owners who made their fortunes in the tech industry — including Los Angeles Clippers owner and former Microsoft CEO Steve Ballmer, Golden State Warriors owner and tech VC Jacob Lacob, the Utah Jazz Team owner and Qualtrics CEO Ryan Smith, Dallas Mavericks owner and celebrity tech investor Mark Cuban, to name a few. “There are tech luminaries running these teams now,” he said.

Holt agrees, adding, “There are more tech-savvy owners in the league who have further embraced Web3 technology, starting with Mark Cuban who bought the Mavericks in 2000.”

However, Cuban doesn’t think the Web3 project’s popularity in the NBA is to be commended, telling the outlet by email that he “has no idea how this started.”

NBA has a young, tech-savvy fan base

Cuban believes that the connection between basketball and blockchain is a natural consequence of having a relatively young and tech-savvy fan base. According to a 2017 study, the average age of NBA fans is 42, second only to Major League Soccer (MLS) as the youngest fan base in major league sports.

By comparison, the average NHL fan is 49, the average NFL fan is 50, the average Major League Baseball (MLB) fan is 57, and the average Professional Golf Association (PGA) fan is 64 years old. According to Holt, NBA fans are also under the age of 35.

“We have the youngest and most digitally literate fan base,” Cuban wrote, adding that he’s not surprised that the NBA and its players have embraced NFTs and Web3 projects so readily. “The NBA and our players dominate social media and digital platforms, so having a strong connection with [Web3] makes a lot of sense for them.”

Will other leagues catch up?

The NBA has advantages in adopting Web3 technologies, from a relatively young and tech-savvy fan base to a relatively autonomous and entrepreneurial player base to a franchise increasingly comprised of tech entrepreneurs and investors A community of owners — but no aspect is unique to the NBA. Other leagues also have young, tech-savvy fans, entrepreneurial athletes, and franchise owners starting out in tech. Launched NFT projects are not even unique.

Dapper Labs recently partnered with the NFL for NFL All Day and the Ultimate Fighting Championship for UFC Strike; MLB is partnering with Topps for NFT baseball cards, and the NHL is partnering with Sweet to help launch its answer to Top Shot. The NBA, MLB and NFL have also each partnered with Fanatics to launch digital series.

However, as of now, it’s hard to say that NFTs and Web3 technologies have penetrated the culture of any other league to nearly the same extent as the NBA, and it’s too early to tell if other leagues will catch up.

“I think the NBA has an edge, but all leagues will have the ability to expand their NFT offerings,” Cuban said.

Dinwiddie added: “I think we’re going to continue to be at the forefront of Web3 because we’re going to keep improving, we’re going to keep pushing the envelope, and the whole entertainment industry will probably replicate it in the future, and they’re going to learn from our mistakes, they There may be a more seamless integration, but we will still be the first mover.”

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/why-is-nba-all-in-web3/
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