NFT Sports Cards Explained (Read Before Buying)

It seems only yesterday when headlines of sports trading cards selling for millions of dollars spotlighted the lucrative world of collectible cards. 

To recap the highest flying sales:

  1. A 1952 Topps SGC 9.5 Mickey Mantle card sold for $12.6 million
  2. A T206 SGC 2 Honus Wagner sold for $7.25 million
  3. The  LeBron James 2003-04 Rookie Patch Auto sold for $5.2 million. 
  4. Patrick Mahomes 2017 Rookie Auto BGS 8.5 sold for $4.3 million.
  5. Luka Doncic 1:1 Logoman Auto sold for $4.6 million

And the list goes on, often to the incredulity of the average person still digesting the idea that even classical art can fetch multi-million dollar price tags.

Throw NFTs, these intangible digital collectibles, into the mix, and it seems people’s incredulity grows to almost shocked disbelief. 

NFT sports cards were inevitable– attach the high value placed on limited edition collectible cards to a 24/7/365 digital marketplace, and you’ve got a powerful combination. 

The following guide explores the ins and outs of NFT sports cards.

NFT Sports Cards 101: A Quick Summary of NFTs

To best understand how NFT sports cards work, it’s essential to firmly grasp the NFT concept. 

A non-fungible token is a cryptocurrency that is unlike any other– hence its non-fungibility. 

For most practical purposes, one bitcoin will always equal one bitcoin, in the same way, one quarter will always equal one quarter. 

However, let’s say we have two houses with identical floorplans– but one is on the beach, and the other is in a regular suburb. In most markets, the beachfront house might be worth triple or even ten times the amount of its less-breezy twin. 

Similarly, the NFT token standard enables tokens to hold unique characteristics– which are priced accordingly by the market. 

The holder of the NFT owns what is essentially the deed to the digital trading card and can sell it whenever.

In more technical terms, the NFT owner holds the token in a cryptocurrency wallet; their private key is what signals to the blockchain that they are the owner of the wallet and its contents, enabling them to trade as they please. 

There are no physical tokens or coins that represent the NFT– it’s all digital, and your private key is what communicates your ownership of the NFT. 

Exploring the NFT Sports Card World

Today’s most popular NFT sports card platforms are essentially the issuers of a specific collection.

For example, NBA Top Shot is the officially licensed platform of NBA collectibles. NBA Top Shot project took the cryptocurrency world by storm when Dapper Labs launched it in October 2020, introducing many of its crypto-savvy collectors to the future of NFTs. 

Dapper Labs is also known for its viral CryptoKitties project in 2017, seeing several CryptoKitties reach six-figure sales. 

In addition to NBA Top Shot, Dapper Labs also has NFL All Day and UFC Strike. 

In just a few short months, NBA Top Shot attracted over $123 million in sales. In 2022, NBA Top Shot Labs reached over $1.03 billion in secondary market trades. 

Dapper Labs takes a 5% royalty fee on secondary NFT sales of its marketplace; so, in theory, Dapper Labs made about $50,000,000 from its users trading its NFTs with each other. 

In contrast to physical sports cards, NFT sports cards are able to include additional rarity features; NBA Top Shot uses different tiers like Legendary, Rare, Fandom, and Common.

NBA Top Shot introduced the most polished NFT sports experience in 2020, paving the road for several new NFT sports card marketplaces today. 

SoRare is a competing NFT marketplace and issuer that initially started with football (of the round ball sort) NFTs, and has expanded to MBA and MLB NFTs. 

However, in addition to purely holding SoRare cards for collection’s sake, collectors can play in twice-weekly global competitions or against friends in private leagues. Using the cards for their collections, players can submit either five-player lineups (for football & NBA) or a seven-player lineup (MLB) in free competitions. 

SoRare players can also earn rewards such as digital player cards, merchandise, match tickets, ETH, or even meeting their star athletes– all based on their squad’s real-life performance– similar to a fantasy league.

NFT Sports Cards: Considerations

Chances are that one top question in your head comes from this line of logic: well, if seemingly anyone can launch an NFT, wouldn’t the market just become supersaturated with NFT sports cards, basically commoditizing the asset class?

Correct. However, this isn’t much different from how real-life companies can start pumping out specific trading cards, provided they have adequate licensing and legal agreements with the organizations.

Similarly, sports organizations tend to sign non-exclusive licensing agreements with NFT platforms– similar to how SoRare and NBA Top Shot are competing companies offering NBA NFTs. However, SoRare offers a gaming aspect, whereas NBA Top Shot seems to be strictly collection-oriented.

We can expect to see more NFT sports card marketplaces and issuers arise with different functionalities. 

Autograph, for example, is a platform that enables famous athletes and celebrities to turn their real-life experiences into NFTs, giving them a direct link to add personal touches to the digital collectibles distributed to fans. 

Rather than a simple static image or . GIF, Autograph NFTs are typically customized high-graphic digital representations, such as interactive posters, digital action figures of iconic game highlights, and more. 

The Autograph team counts a star-studded array of celebrity athlete partners, like Tom Brady, Simone Biles, Tiger Woods, Derek Jeter, Wayne Gretzky, and Tony Hawk. 

However, NFTs come with additional considerations their physical counterparts don’t.

For one, the underlying blockchain adds another distinctive category type. While the bulk of NFT sports cards (in terms of market share, volume, and popularity) are on Ethereum’s blockchain, there are competitors emerging on blockchains like Solana, Polygon, Flow, and even Cardano. 

Final Thoughts: The Future of NFT Sports Cards

Bear or bull market, the underlying value proposition of NFT sports cards remains the same– collect digital assets representing your favorite athletes similar to how you’d collect physical cards. 

With a few billion dollars in primary and secondary volume, NFT sports cards are a smaller yet still dominant representation of NFT’s potential. 

 It’s not a stretch to assume we’re in the early innings of how far NFT sports cards can go; platforms like NBA Top Shot, SoRare, and Autograph have raised and are implementing over a billion dollars of cumulative funding to build their NFT offering

However, potential NFT sports cards holders should be mindful their digital holdings come with more nuanced responsibilities, such as protecting your holdings from hackers (and yourself) with adequate cryptocurrency wallet security and digital hygiene– as well as the underlying risks of the very risky cryptocurrency world.

NBA Top Shot: A Complete Guide to Basketball on Blockchain

NBA Top Shot is the hottest talk on the cryptocurrency of 2021 so far; the collectible, blockchain-based NFT release platform and marketplace enable users to purchase NFTs of NBA highlight reels, and some of them have sold for over $200,000.

It seems like basketball on the blockchain is a slam dunk. Let’s explore. 

NBA Top Shot History: A Dapper Labs Project

NBA Top Shot was launched in July 2019 by Dapper Labs, a blockchain startup specializing in digital collectibles.

Prior to Top Shot, Dapper Labs’ best-known project was the viral CryptoKitties– a staple of 2017 cryptocurrency culture. CryptoKitties is an NFT-based game where users can collect and “breed” collectible cats. 

NBA Top Shot’s Home Page

While NBA Top Shot and Cryptokitties share many similarities due to their non-fungible nature, CryptoKitties is unique in that each CryptoKitty is one-of-a-kind in its design. In contrast, NBA Top Shot sells thousands of copies of an individual moment, although each is marked by a unique-serial number. 

CryptoKitties were frequently being bought and sold for hundreds of thousands of dollars during the 2017/2018 bull run in secondary marketplaces. 

The Dapper Labs partnership team has been incredibly busy since CryptoKitties, forming partnerships with the NBA and NBPA, Warner Music Group, Ubisoft, and the UFC. 

“Dapper Labs’ innovation and expertise make them a perfect partner to introduce this groundbreaking game and what we believe will become coveted digital collectibles for basketball fans around the world,” said Adrienne O’Keeffe, NBA Senior Director, Consumer Products & Gaming Partnerships in a press release regarding the 2019 NBA partnership. 

Dapper Labs raised $52.5M from notable funds such as Andreessen Horowitz, Union Square Ventures, Venrock, GV (formally known as Google Ventures), and Samsung as well as the founders of AngelList, Reddit, Dreamworks, Coinbase, and  Zynga. The team recently announced it is raising $250 million in a Coatue Management-led round in 2021. 

Contrary to popular belief, Dapper Labs doesn’t use the Ethereum blockchain; it uses the Flow blockchain, citing Ethereum’s inability to cost-effectively scale as too significant an obstacle for the trading of digital collectibles. With Ethereum gas fees spiking as high as $150+, Dapper seems to have made a great decision before reaching a critical mass of users and virality.  

How Does NBA Top Shot Work?

NBA Top Shot is designed to emulate the exciting experience of buying packs of trading cards. 

  1. You can create an account at https://www.nbatopshot.com/
  2. You will be required to fill out some basic KYC profile information. You will also be asked to make a Dapper Labs profile, which facilitates the transaction process. 
  3. You will be given the option to select your favorite teams, which will help NBA Top Shot curate your home-page experience. 

Once you’ve created your account, you’ll likely need to wait for a new pack to drop. We recommend signing up for their email list to be notified as to when the packs will go live. 

They sell out very quickly, and showing up on time doesn’t guarantee you’ll get to purchase a pack. 

So far, it seems there are three standard types of pack available:

  • Base Set (Common): For $9, you will get nine common moments. Every moment has a production of 1000+ with no maximum cap. 
  • Premium: For $24, users will receive seven common moments, and one rare moment. The rare moments have a production max of 999 clips. 
  • Legendary: $230 gets you six common moments, three rare moments, and one legendary moment. The legendary moment has a production max of 99 clips. 

There are also pack drops outside of the standard pricing. For example, on March 6th, 2021, “Seeing Stars” packs dropped for $14. 

How Much are NBA Top Shot Moments Selling For?

Taking a gander at the NBA Top Shot Marketplace, you’ll see thousands of Moments being sold for anywhere from $5 to $250,000+. 

One user made waves by purchasing a LeBron James Lakers Highlight Moment for $208,000, citing that he is an enormous fan of James and believes the moment is worth $1,000,000+. 

Sold out packs on NBA Top Shot

There are over 8 NFT moments of James that sold between $48,500 to $100,000. Zion Williamson’s “Holo MMXX” Block Moment sold for $100,000. 

Final Thoughts

Are NBA Top Shot moments worth hundreds of thousands, or potentially millions, of dollars? Is it just a fad that will fizzle out once the hype dies down? 

We’ll let history decide, but for now, it’s worth exploring two antagonizing lines of thought:

  • “NBA Top Shot moments are pieces of sports history! You’ve seen trading cards sell for millions of dollars, this is just like that but maybe even better. Since these moments are NFTs, you can easily track ownership, propriety, and you can transact seamlessly with anyone all over the world. They’re digital, so you don’t have to worry about storing them or experiencing a situation like your mom throwing out your lucrative Pokemon card collection!” 

Well, yes. One can argue that value is determined by how much anyone is willing to pay for a specific item. It is difficult to gauge how well value is preserved in a purely digital ecosystem because it is so new. Speculating with NFTs is very risky, and every ounce of prudence may help in the long-run. 

  • “People are crazy to spend any amount of money on NBA Top Shot Moments. You can just save the video to your computer and watch the moment whenever you want, for free! The marketplace is highly speculative and the true value of NBA Top Shot Moments is probably much less than what people are trying to sell them for.” 

Well, yes. You can also buy a mock imitation of the Mona Lisa for about $100. Heck, the paint on it probably won’t even be chipping. The value of NBA Top Shot Moments and NFTs is in their scarcity and ownership features

In theory, more people watching and saving a particular moment will only increase the value of owning the original– it’s basically free advertising. 

Time will tell how far basketball on the blockchain will go, but it’s worth paying attention to for any sports fan or collector.