NBA Top Shot is an NFT marketplace where sports fans can buy, sell and trade basketball video clips.
Launched in 2020, NBA Top Shot is a partnership between the NBA and Dapper Labs, the creators of CryptoKitties. High-profile investors include the NBA legends Michael Jordan, Kevin Durrant and Klay Thompson.
The platform is run using Dapper Labs's Flow blockchain, and gives users the ability to trade digital assets based on video clips from NBA games. The Flow blockchain supports transactions on a range of other sports NFT marketplaces, like NFL All Day and UFC Strike.
What Are NBA Top Shot Moments?
Moments are the video highlight clips sold as NFTs on NBA Top Shot. Much like conventional sports trading cards, Moments increase value based on their rarity. The rarer the video clip, the higher its potential value as a collectible.
On its surface, a Moment is simply a video clip of a specific play—a LeBron James dunk or Steph Curry layup, for example. So why would anyone pay money for video highlights they can watch for free on YouTube?
Moments are more than highlights. Like other NFTs, which represent real-world items from art to in-game items to music, each Moment is an NFT that's officially licensed by the NBA and minted with a unique serial number and data, including game and player stats.
There's also the cachet of owning a piece of basketball history. NFTs are like a certificate of authenticity: The technology behind them makes it difficult to replicate or counterfeit them.
What Can You Expect to Pay for NBA Top Shot Moments?
Like all NFTs, a Moment is only worth what a buyer is willing to pay in the secondary market. Rare Moments from top players can go for hefty sums, while others sell for just a few dollars.
A Moment of a LeBron dunk against the Houston Rockets, for instance, fetched $387,600 last year.
Of course, not all Moments are that expensive. NBA Top Shot users can purchase a starter pack of Moment NFTs for $9, giving the buyer a 0.024% chance of getting a more valueable “Legendary NBA All-Start Classics” Moment.
Like trading cards, Moments are finite, and NBA Top Shot determines how many to release at once. So, getting a Moment that's 1 in 49 is more valuable than one that's 1 in 11,000.
The scarcity is somewhat manufactured since NBA Top Shot releases Moments on its website in digital packs via limited events called “Drops.” Drop times vary, so users have to stay tuned for announcements.
How to Buy NBA Top Shot Moments
Wondering how you can snag a Moment of your own? First, you need to sign up and get verified on the official NBA Top Shot marketplace.
Only verified users can make purchases with a credit or debit card (Visa or Mastercard) or their crypto wallet with Ether, Bitcoin and Bitcoin Cash, and the Ethereum variations of Dai and USD Coin.
NBA Top Shot also hosts a healthy secondary marketplace where fans can buy, sell, trade, or gift packs or individual Moments.
Advantages of NBA Top Shot
Ease of use. Dapper Labs designed NBA Top Shot with people new to cryptocurrency and NFTs in mind. You don't need to know anything about blockchain or crypto investing to use the marketplace. All you need is a love of basketball and a healthy understanding of supply and demand.
Great collecting experience. When you collect physical trading cards, you have to properly preserve and store them, and also potentially verify their authenticity. Moments are digital and stored online, so they can't be damaged or stolen, nor will they degrade over time like physical cards. Their authenticity is already verified on the blockchain—there's no need for a costly grading process.
Downside protection against oversupply. NBA Top Shot mints and licenses all of the Moments it creates, controlling the supply of products in the marketplace.
This should help prevent flooding the market with duplicate products, preventing the sort of market oversupply that was seen in baseball cards in the 1990s.
Lowers the barrier to entry for new NFT collectors. The price of collectibles in many categories, including NFTs, has seen major spikes higher in recent years. NBA Top Shot makes collecting NFTs accessible.
Disadvantages of NBA Top Shot
Lengthy verification process. Dapper Labs' lengthy verification process could cause collectors attempting to profit from a quick sale to lose out. Moments' values fluctuate, so that delays could be costly.
Risk of losing money. As with any investment, it's entirely possible to lose money on NBA Top Shot's NFTs. Some collectors have reported purchasing packs, then discovering the Moments inside are worth less than the cost of the pack itself. In addition, there are no guarantees that a seller will be able to sell their Moments to a buyer willing to pay the asking price.
NFT values depend on market demand. Like all NFTs, NBA Top Shot's Moments are only worth what someone else is willing to pay for them. On their own, they have no real intrinsic value—basketball fans drive the prices. It's impossible to predict when prices will fluctuate, rendering some formerly valuable Moments worth much less.
