NBA TOP SHOT 101: A BEGINNER’S GUIDE
Have you ever dreamed of paying money to own something which you could access for free? Now you can, with NBA Top Shot! But it’s not as silly as it might sound – in fact, it’s part of a growing craze surrounding what’s known as NFTs, and could just be the best investment you’ve ever made.
What is Top Shot? Why the Hype?
NBA Top Shot is an online platform where you can buy highlights of NBA players doing NBA things. Each of these highlights – known as a moment – is an NFT, or non-fungible token, which basically just means that it’s a unique digital asset.
Source: NBA Top Shot Youtube Channel
You’re probably thinking that it doesn’t sound very unique at all – in fact, it sounds a lot like a replica, which is literally the exact opposite of unique. What makes it one-of-a-kind, however, is that each replica is given a serial number, meaning it is the only moment in the world with that exact number assigned to it. I might have the 7,658th version of a certain LeBron dunk and you might have the 7,659th version of that same dunk, and while they’re similar assets, they’re not the same.
On the Top Shot platform, you can buy, sell and collect these unique moments. It’s all part of a joint venture between the NBA, NBA Players Association and Dapper Labs, and uses what’s known as the Flow blockchain to record transactions.
Side note for those unfamiliar with the concept of a blockchain: all you need to know is that it’s a digital ledger of transactions which is recorded in blocks on an entire network of computer systems. As it relates to NBA Top Shot, this means that info about each and every transaction ever made on the platform is publicly available.
Screenshot of the NBA Top Shot Marketplace with some of the most valuable and rarest Moments…don’t worry, there are many moments to purchase with far less zeroes (Source: NBA Top Shot Website)
How Do You Get Involved?
To get involved with NBA Top Shot, all that you need is an account on the website – after that you’re free to purchase moments to your heart’s content. The simplest way to do this is to head to the marketplace, which functions basically like a real-life marketplace but without the crowds and bad smells. More detail about that below.
Alternatively, you can try to purchase a pack. Remember when you were a kid (or an adult – who am I to judge?) and you’d get a pack of NBA player cards, or Pokémon cards, or whatever it may have been. You’d have no idea what was inside and would rip it open like the excitable teenager that you were. Packs on NBA Top Shot are basically the same concept – you buy a pack of moments, and whatever is inside is yours to do what you will with.
Packs aren’t just available to purchase at any time though. They come via intermittent releases known as pack drops, and only a finite number of each is available. Demand for these packs significantly outweighs supply, so Top Shot introduced a queue system to decide who gets one. But this is not the orderly queue to which you may be accustomed – instead of heading to the back of a single-file line like a good student, you’re assigned a random place in it by the powers that be. If you get to the front before all the packs all sold out, it’s all yours; if not, bad luck.
Once you purchase a moment or pack, you own it. Is that fun in and of itself? For some people maybe, but for most the enjoyment will come from the investment aspect – the ability to watch it hopefully rise in value, or to sell it on the marketplace and use the funds to buy something else which you think will.
Demand for NBA Top Shot Packs is high (regardless of price) and supply is extremely limited (Source: NBA Top Shot Website)
What is the Marketplace and How Does it Work?
The marketplace is where all of the action happens. Aside from pack drops, this is the only place where you can accumulate moments, and it’s also where you go to sell moments that you already own.
Unlike many physical marketplaces though, there’s no bartering here. When someone decides to sell a moment, they and they only decide how much it should sell for. Often, they’ll be way off the mark and nobody will ever buy their moment for the price at which they’ve set it. If you see somebody trying to sell a random Ish Smith assist for $200,000, don’t panic – that’s not really the going price, and it will stay listed at this inordinate amount until the buyer takes it down.
If you’re interested in buying a moment, you can either perform a search or simply click on the relevant image when you come across it. You’ll then be taken to a page on which every unique version of that moment which is for sale is listed – from the cheapest, known as ‘lowest ask’, through to the most optimistic. Generally we’d recommend sticking to the cheapest for reasons which are hopefully obvious, though it can be worth paying a little extra for certain serial numbers – most notably low ones.
If you’re on the other side of the counter and are looking to offload a moment, all you need to do is set an asking price and put it up for sale. It’ll stay listed either until somebody buys it, or, if you’re the person trying to sell Ish for $200k, until you take it down.
Who and What Decides How Much a Moment is Worth?
To put it simply, a moment is worth however much somebody is willing to pay for it, and it’s up to the seller to figure out how much that is. The way that Top Shot illustrates the general worth of a moment is through the aforementioned ‘lowest ask’ feature, which simply tells you what the lowest listed selling price of each moment is at any given time. Often there will be a handful of serial numbers for each moment for sale either at or just above the lowest ask. Other times you might stumble across a bargain when someone either wants to get rid of something quickly, or doesn’t know what they’re doing.
There are a plethora of things which the NBA Top Shot community is currently debating as potentially adding value to a moment. Some of these make a lot of sense – basic things like how good the player is, how good the moment is, and whether it has a particularly low serial number. Other ideas floating around are a little more speculative – a Mason Plumlee moment probably won’t skyrocket in value overnight just because he plays well in a random Tuesday night game, despite what some would have you believe. There’s an almost endless number of ways this valuation can be approached, and we’ve got plenty of theories of our own, too.
A Lebron James NBA Top Shot Moment (Source: NBA Top Shot Website)
Who Else is Getting Involved?
Or should we say, who isn’t getting involved!? Just kidding – there are lots of people who aren’t, but there is also an increasing number of high-profile figures waxing lyrical about NBA Top Shot, and that number only appears to be trending upwards.
Unsurprisingly, most of these high-profile figures are involved in the NBA in some capacity, some directly and others on the periphery. Dallas Mavericks owner Mark Cuban has been open in his enthusiasm for the concept, though it’s safe to say the moments he’s looking to buy are probably out of the price range of regular folk like you and me. Recently he claimed that he would pay $1 million for Luka Doncic’s 3-point buzzer-beater against the Clippers in the bubble playoffs – I understand that he likes the Mavs and Doncic is really good, but wow.
There are also a whole heap of NBA players getting involved. The NBA Top Shot home page proudly displays a list of these players, which includes Andre Iguodala, CJ McCollum, Dwight Howard and plenty more. Josh Hart and a handful of others have even been live streaming themselves opening packs, something which drummed up plenty of excitement among the masses.
“NFTs in general, of which Top Shot is the first and a leader, could turn into a top 3 revenue source for the NBA over the next 10 years.”
Where is This Going?
There are advocates and naysayers for NFTs in general, each as stubbornly staunch as the other, but the weight of opinion is firmly trending towards seeing them as an area with massive potential growth. Assuming that proves correct, NBA Top Shot is perfectly positioned to enjoy the ride.
Not only is it a pioneer within the basketball world; NBA Top Shot is laying the foundation for sports all around the world to follow. Already Dapper Labs is partnering with the UFC to create a similar product – just wait until the concept spreads to the likes of the NFL. And even more exciting, Top Shot is still in its relative infancy.
Despite all of the hype, NBA Top Shot is still in beta stage, and marketing of the product has thus far been very limited. Once they’re ready to go all-out in attempting to attract new customers, it seems likely there’ll be a huge boom in interest. As we know, it’s the buyers who dictate the market, so when there’s exponentially more people scouring the marketplace, those Series 1 and 2 moments you’re holding onto are going to look pretty valuable.
