Blockchain startup Dapper Labs turned heads when it signed a deal with the National Basketball League more than a year ago to let fans buy collectible video moments from games. Now, it’s proving to be a genius idea with more than $50 million in sales coming through its NBA Top Shot platform in just the last 30 days.
As a simple explainer, the platform allows for something akin to verifiable video trading cards: The NBA selects the best moments from games and then Dapper Labs verifies how many it wants to publish on its blockchain before selling those moments in so-called “digital packs” that fans can buy on its platform just as fans would buy a pack of trading cards.
Each digital pack can sell for $9 to $230 depending on the scarcity level or the star power of the players included. After buying a pack, a fan can store the collectible moments in a digital wallet to potentially sell them later for a profit. Extremely viral moments have already resold on NBA Top Shot for close to $100,000, including one dunk from Los Angeles Lakers star LeBron James that was traded for more than $71,000.
👑HAIL TO THE KING👑@andy8052 acquired this Serial No. 1 Legendary LeBron James Moment from our From The Top Series 1 set for $71,455 🚀 An iconic tribute dunk, indeed 💯
The TOP acquisition for any NBA Top Shot Moment ... so far 📈
Very nice pickup for the collection! 🎉 pic.twitter.com/LQuhgeYr45
— NBA Top Shot (@nba_topshot) January 22, 2021
“At the simplest level it’s like trading cards: people open packs [and] trade cards with their friends in the marketplace,” Dapper Labs CEO Roham Gharegozlou explained in a Yahoo Finance Live interview. “Because they are digital, it’s pretty much instant compared to postal mail. The marketplace and all the trading history is fully transparent.”
After launching its public beta in October, Gharegozlou said the platform has grown so fast it saw $50 million worth of trading activity in just the last 30 days. That’s even more impressive when you consider the platform still has fewer than 50,000 users. Other video cards featuring plays from other NBA players like New Orleans Pelicans star Zion Williamson have re-sold for $100,000. The majority of others cost under $50. But the NBA could just be the start.
More broadly, NBA Top Shot is an exciting and perhaps easier to understand example of a use case that uniquely leverages blockchain’s advantages. Specifically when it comes to memorabilia, there are obvious benefits that stem from a public ledger that can immediately confirm a given digital card is authentic and display its prior history. Everything is uniquely tracked on Dapper Labs’ underlying Flow blockchain, which spent years in development following an earlier experiment called CryptoKitties that let users buy, sell, and trade virtual cats. That same tech gets a little more exciting when you swap out virtual cats with real plays from real NBA games everyone is already watching, but other projects built on the same chain will likely come next.
“Blockchains are public computers,” Gharegozlou explained. “They are infrastructure that you pay to use in the form of a token rather than paying dollars to Amazon or Google to run your operations. That’s what’s happening behind-the-scenes: A user is coming with a credit card, you can come with bitcoin, you can come with any currency you want to come with, but every transaction is being powered by the Flow blockchain, every asset is being authenticated and secured by the Flow blockchain.”
For now, Dapper Labs is focusing on making sure NBA Top Shot continues to expand smoothly, working out the kinks and updating where needed. It’s worked with an impressive slate of partners to gamify the front-facing action specifically for NBA fans, while it’s behind-the-scenes blockchain powers digital card after digital card swap.
“You don’t need to know that in order to play NBA Top Shot. There’s nothing about cryptocurrency, it’s about basketball. The crypto technology is simply what enables the software to exist,” Gharegozlou said.
Dapper Labs has raised more than $50 million from its list of investors which include Coinbase Ventures and Andreessen Horowitz. The company has also signed a deal with UFC to create a platform similar to what it launched for the NBA. But Gharegozlou says he’s most excited about what developers might want to build next with the blockchain Dapper Labs has proven out.
“The Flow blockchain is basically a decentralized computer. You can program anything on top of it,” he said. “Its going to be interesting to see what the community of developers comes up with in the comings years.”
Zack Guzman is an anchor for Yahoo Finance Live as well as a senior writer covering entrepreneurship, cannabis, startups, and breaking news at Yahoo Finance. Follow him on Twitter @zGuz.