Almost a full year ago, I wrote an article on HackerNoon titled NBA Top Shops - Where NFTs Meet Branding. It was one of my earliest forays into writing about crypto, my first proverbial toe in the water. A lot has changed since then.
NFTs have absolutely boomed. They've created an entire industry, seen a summer, a winter, and then another summer. Projects and collections with no brand affiliations (unlike Top Shot) have taken off, while others like BoredApes or CryptoPunks have created affiliations all by themselves.
Because of that, I wanted to take a moment to return back to that original piece that I wrote a year ago and follow up with where Top Shot is today, their place in the larger NFT ecosystem, and whether Dapper Labs choice to launch NBA Top Shot on Flow rather than on Ethereum was the right choice.
What Does NBA Top Shot Look Like Today?
There's no way around it, Top Shot has never again reached those incredible heights of early 2021, and don't look like they ever will. But, they have settled into a reasonable niche and seemed to have built a steady community.
The important part is that they haven't died out. There's a steady user base here with at least 500,000 sales per month and somewhere around 45,000-60,000 unique buyers per month. There's a community here that they've built that's bought into owning a digital collectible. In size and scope, it feels similar to the community that invests in physical trading cards. It's not flashy, but steady and settled business.
Where Top Shot Fit into the Larger NFT Ecosystem
As I was writing this article, I had a conversation with a friend that still believes that Top Shot doesn’t have the same intrinsic scarcity value that a BoredApe or a CryptoPunk do because they are, essentially, replays that anyone can find on YouTube.
But, that’s where I think Top Shot sort of exists outside of the usual NFT ecosystem. They’re really appealing to a different audience slightly on the outside of the traditional NFT audience. They come in with the added advantage of an existing brand, as well as an existing ecosystem for trading and using the NFTs that you purchase. It honestly makes far more sense to consider Top Shot to be a sort of GameFi system with NFTs involved.
This self-contained ecosystem is also significantly easier to access. You can log onto NBA Top Shot right now and buy a top shot with nothing but a credit card. Compared to buying Ethereum, adding it to a wallet, and then using OpenSea to find the right NFT and purchase, this is far more straightforward.
This isn’t necessarily a bad thing per se but shows that the two spaces are somewhat disconnected and can survive without the other.
Was Dapper Right Not to Use Ethereum?
Dapper Labs, the creator of NBA Top Shot, previously released other games and collections like CryptoKitties on Ethereum. Top Shot was the first product they released on their native chain Flow. I talked about Flow’s asynchronous approach to consensus in my earlier article, so I’m not going to really dig deep into it now. If you’re interested, feel free to read that article here, or go through the original Flow documentation here.
To bear honest, the consensus mechanism doesn’t really matter here in this decision. The NFT boom this past summer has seen a spike in Ethereum Gas prices. Blockspace has become a prized commodity with the increase in traffic, and confirming transactions now comes at a solid cost.
I’ve been desperate to find hard numbers to back up this claim, but from what I can see scrolling through the transactions, a number of the top shots sold are in the $10-$100 range. This is incredibly important because this is a price point that isn’t selling all that well in Layer 1 Ethereum. Paying $40-50 in gas for a $30 NFT just doesn’t make sense!
But Flow, having a far more open network with NBA Top Shot being their primary user, means that transaction prices aren’t nearly as high. For this reason alone, I think using their own native blockchain for Top Shot makes mountains of sense.
The second, less prominent reason is that launching on their own network allows Top Shot to control the end-to-end buying experience of NBA Top Shot users. This makes this experience far more friendly for those who aren’t already plugged into the NFT ecosystem.
Conclusion
I concluded my earlier article with the question, “Will these top shots hold their value?” The answer is yes! The NBA has created a robust and deep community around these top shots and convinced a new generation of collectors that these have inherent value. That’s an incredible achievement, even if this is as large as the community ever gets.
Thanks for reading! If you like what you read, I write shorter articles weekly about crypto, DeFi, and Web3. Come check out my substack and give it a follow. New articles in your inbox at 6 AM on Mondays.
If you’d like to reach me on Twitter, follow me @EswarVinnakota.
