A Beginner’s Guide to NBA Top Shot NFTs
NBA Top Shot is a nonfungible token (NFT) marketplace that enables basketball fans to buy, sell, and trade NBA-themed digital collectibles.
These collectibles are “moments”—NFTs of NBA video clips and digital art—available according to their degree of rarity. In other words, users can trade NFTs that have everything from a game-winning three-pointer from Luka Dončić to a dunk from Lebron James, subject to availability.
The concept is akin to traditional sports collectibles where fans try to acquire the rarest items associated with teams, with the goal of either collecting or selling it later 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, the NBA Players Association and Dapper Labs. The marketplace runs on the FLOW blockchain, which Dapper Labs built as a developer-friendly ledger to support “the next generation of games, apps and digital assets.”
As explained above, the NBA Top Shot platform functions as a trading card. It starts with the NBA licensing its wheels and digital art to Dapper Labs. In turn, Dapper Labs uses the footage to create Moments as NFTs.
Each moment has a unique serial number associated with it, guaranteeing its authenticity and indicating its rarity. Additionally, the Dapper Labs team only creates a limited number of NFTs to ensure scarcity. As a result, the commonly available moments are cheaper in value than the rarer ones. The NBA Top Shot website explains that:
An NFT is a unique, non-fungible, cryptographic token that represents a unique digital resource for which there is no copy or substitute. An NFT cannot replace another NFT as each NFT is distinctive and unique in one way or another. An NFT is not a medium of exchange and is not convertible virtual currency.
Each moment is secured by the blockchain, meaning your moment is unique and licensed by the NBA and NBPA.
Moments come as part of “Packs”, similar to how traditional sports cards come in a bundle. In turn, packages are part of the so-called “series”, which is launched at the same time as the NBA season. So fans can collect new packs of NFT moments featuring the best highlights of the season.
In addition, fans can collect moments from the past depending on availability. For example, they can get Magic Johnson’s dunk from May 16, 1980.
NBA Packs and Moments
Collecting NBA Top Shot Moments is no easy task. Usually, users don’t know what moments they will receive when they go ahead with a purchase, given the availability of each NFT depends on what kind of set or package it comes from.
NBA Top Shot has four types of moments: Common, Fandom, Rare and Legendary. There is also a fifth category, called Ultimate, but this moment can only be obtained via auction. Anyway, here’s how the other four categories work:
- Legendary moments: make up 0.09% of the total moments available, making them extremely rare and difficult to obtain. Naturally, 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 since Dapper Labs creates them based on special experiences related to specific events. For example, the company can make Moments available in real time to only those users who were available in the arena.
- Common Moments: make up 95.8% of the total moments, which means they are easily accessible and cheaper than other categories.
Dapper Labs groups the best moments into packs and presents them as sets. These kits come in two distinctive categories: Base and Non-Base. Here’s how they work:
- Basic set: These packs fall into the Normal Rarity category and are released in order of series and release, i.e. series 1 had 12 releases. They contain three basic moments and are ideal for users just starting their NBA Top Shot collection.
- Non-base set: Unlike base sets, non-base sets come in variants and contain at least one common moment in addition to a rare or legendary moment. That makes the sets more expensive.
NBA Top Shot challenges and missions
Challenges and missions act as a parallel path from which NBA Top Shot users can receive moments, but as rewards not sales.
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For example, Challenges provide rewards to users who complete a given task in a specific time frame. In detail, NBA Top Shot can launch a challenge with directives to collect a certain number of moments in certain hours or days. Users who complete the challenge will receive a newly minted moment.
Similarly, Assignment offer rewards to users for completing tasks, except that the tasks are like scavengers, where users are asked to find and build an exhibit for moments with certain characteristics. As a result, quests appear to be more difficult than challenges and therefore provide greater rewards.
A word of caution
Demand for NBA Top Shot exploded in 2021 with sales volume reaching an estimated $224 million in sales volume from over 80,820 unique buyers in February. By November 2022, sales volume had fallen to around $2 million from around 10,000 unique buyers.
The crash in demand came in line with similar falls across the NFT space, with many leading projects, including Bored Ape Yacht Club and CryptoPunks, witnessing lower demand. As a result, some analysts trashed the NFT market altogether and called it a bubble.
2022 was the year of murder scams:
NFT bubble burst
Crypto collapsed along with corporations like FTX which were huge Ponzi schemes
Conservative pollsters crunching numbers were proven wrong
Trump’s company was found guilty of tax fraud
Investors realized that Elon Musk is not a genius
— Arlen Parsa (@arlenparsa) 15 December 2022
As a result, venturing into NBA Top Shot rooms to speculate on the moments remains a risky proposition, and potential collectors should never invest more money than they can afford to lose.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
