A Beginner’s Guide to NBA Top Shot NFTs
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NBA Top Shot is a non-fungible token (NFT) marketplace that allows basketball fans to buy, sell, and trade NBA-themed digital collectibles.
These collectibles are “Moments” – NFTs of NBA video clips and digital art – that are available by rarity. In other words, users can trade NFTs offering anything from a winning three-pointer from Luka Dončić to a dunk from Lebron James, depending on availability.
An NBA top shot moment list example. Source: Official Website
The concept is similar to traditional sports collectibles, where fans attempt to acquire the rarest items associated with teams with the goal of either collecting them or later selling them for a higher price. Except in the case of NFTs, these collectibles are digital — unique cryptographic tokens that exist on a blockchain and theoretically cannot be replicated.
How does NBA Top Shot work?
NBA Top Shot is officially licensed by the NBA, NBA Players Association and Dapper Labs. The marketplace runs on the FLOW blockchain, which Dapper Labs built as a developer-friendly ledger to power “the next generation of games, apps and digital assets.”
As explained above, the NBA Top Shot platform works like trading cards. It starts with the NBA licensing their reels and digital art to Dapper Labs. Dapper Labs, in turn, uses the footage to create Moments as NFTs.
Each moment is provided with a unique serial number, guaranteeing its authenticity and showing its rarity. Additionally, the Dapper Labs team only creates a limited number of NFTs to ensure scarcity. As a result, the generally available Moments are cheaper in valuation than the rarer ones. The NBA Top Shot website explains this:
An NFT is a unique, non-fungible cryptographic token that represents a one-of-a-kind digital asset that has no duplicate or substitute. One NFT cannot be substituted for another NFT as each NFT is distinctive and unique in some way. An NFT is not a medium of exchange and is not a convertible virtual currency. Every moment is secured by the blockchain, meaning your moment is unique and licensed by the NBA and NBPA.
Moments come as part of “packs,” much like traditional sports cards come in a bundle. Packs, in turn, are part of the so-called “Series” that is released at the same time as the NBA season. This will allow fans to collect new packs of NFT Moments that include the best highlights of the season.
Also, fans can collect moments from the past based on availability. For example, you can get Magic Johnson’s dunk on May 16, 1980.
NBA packs and moments
Collecting NBA top shot moments is no easy task. Typically, users don’t know what Moments they’re getting when they make a purchase, since the availability of each NFT depends on the type of set or pack it’s from.
NBA Top Shot features four types of moments: Common, Fandom, Rare, and Legendary. There’s also a fifth category called Ultimate, but this moment is only available through auctions. Anyway, here’s how the other four categories work:
Legendary Moments: accounts for 0.09% of the total moments available, making them extremely rare and difficult to acquire. Of course, Legendary Moments are more expensive than most of their counterparts. Rare Moments: Make up 1.6% of total moments and typically feature historic plays by NBA legends. Fandom Moments: Availability is not fixed as Dapper Labs creates them based on particular experiences related to specific events. For example, the company can provide real-time moments only to the users who were available in the arena. Shared Moments: make up 95.8% of total moments, meaning they are readily available and cheaper than other categories.
NBA moments categorized by rarity. Source: Official Website
Dapper Labs groups the top shot moments into packs and presents them as sets. These sets come in two different categories: Base and Non-Base. How they work:
Base Sets: These packs fall into the Shared Rarity category and are released in series and release order, ie Series 1 had 12 releases. They contain three basic moments and are ideal for users who are just starting out with their NBA top shot collection. Non-Base Sets: Unlike base sets, non-base sets come in variations and contain at least one common moment in addition to a rare or legendary moment. This makes the sets more expensive.
Illustration of NBA top shot sets. Source: Official Website
NBA Top Shot Challenges and Quests
Challenges and Quests serve as a parallel path for NBA Top Shot users to earn moments, but as rewards, not sales.
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For example, challenges grant rewards to users who complete a specific task in a specific time frame. In detail, NBA Top Shot can launch a challenge with instructions to collect a certain number of moments in certain hours or days. Users who complete the challenge will receive a freshly minted moment.
Similarly, quests provide users with rewards for completing tasks, except that the tasks are like scavenger hunts in which users are challenged to find and build an exhibit of moments with specific properties. As a result, quests appear to be more difficult than challenges and therefore return greater rewards.
A word of caution
Demand for NBA Top Shot exploded in 2021 as February sales volume reached approximately $224 million from over 80,820 individual buyers. By November 2022, sales volume had dropped from around 10,000 individual buyers to approximately $2 million.
NBA Top Shot Sales Volume Throughout History. Source: CryptoSlam
The slump in demand has been paralleled by similar declines across the NFT space, with many leading projects including Bored Ape Yacht Club and CryptoPunks seeing lower demand. As a result, some analysts have destroyed the NFT market altogether, calling it a bubble.
2022 was the year of the scam:
The NFT bubble burst
Crypto collapsed along with corporations like FTX which were giant Ponzi schemes
Conservative pollsters who made up numbers have been proven wrong
Trump’s company was found guilty of tax fraud
Investors have realized that Elon Musk is not a genius
— Arlen Parsa (@arlenparsa) December 15, 2022
As a result, venturing into the NBA top-shot space to speculate on your moments remains a risky proposition, and prospective collectors should never invest more money than they can afford to lose.
This article does not contain any investment advice or recommendation. Every investment and trading move involves risk and readers should do their own research when making a decision.
