NBA TopShot NFT Overview

Collectible summary:
Tiered, mostly limited-edition collectibles of NBA players, each of which features a player highlight like a dunk or an assist. 
After new supply is released through a pack drop, the cheapest collectibles will run $10-100 but the sky is the limit with sales above $100,000 happening almost daily.

Technical summary:
Built on the FLOW blockchain using FLOW Cadence smart contracts.  Payment can be made using credit cards (up to a $5,000 USD daily limit) and cryptocurrency using the Dapper Wallet.  As of now, approval to withdraw funds takes an estimated 30-60 days given the backlog of accounts that have made requests.

Individual cards can be purchased through the Marketplace, and packs typically containing 3-6 cards can be purchased by queueing at pre-announced times.  For a valuable pack, 5-20% of those who want one are randomly selected, and each user only gets one.


Ultra high-end (Top 0.01% of NFTs on platform): Series 1 LeBron James From the Top (the “Kobe Tribute Dunk”)
High-end (Top 5% of NFTs on platform): Series 2 Steph Curry Base 3-Pointer

Overall rating:

Bottom Line:
We believe that the hype and the growth are just starting and that the aggregate market cap has upside to over $10 billion in 3-5 years if not sooner.  For context, the NBA franchises themselves are worth $100 billion-plus and growing at a double-digit clip, and TopShot has already become the primary out-of-game vehicle by which the league communicates with fans.  Why not a perfect score?  Only because some technical hiccups remain to be solved by Dapper Labs and because the days of moonshot early-adopter returns are months behind us for TopShot.

Scarcity rating:

TopShot is a tough NFT to rate on this dimension.  Of course the top ~0.1% of moment/serial-number pairs are individually scarce, but most of the inventory is cards that aren’t all that scarce.  So, if you do your research and figure out what NFTs are truly scarce without risk of dilution by future issues, you can be assured of scarcity albeit at an astronomical price relative to other cards.

IP rating:

This is flawless IP.  In our opinion, the NBA, the NFL, Marvel, and Star Wars are the absolute top of the top and the NBA is the only one of the four that has official NFTs on the market.

Liquidity rating:

The marketplace itself is the most liquid NFT trading exchange in the world by a mile.  Withdrawing your money on the other hand is another matter entirely, as Dapper Labs is currently experiencing a months-long delay in processing customer requests to be able to withdraw.

Additional valuation commentary:

Overall market upside: 1.2-1.4x from March 1, 2021 levels

Additional upside: 2x+ if you’re willing to invest significant capital against a clearly-defined strategy, for example completing the challenges that yield scarce prizes.

Day trading opportunity: Low to moderate due primarily to the 5% transaction fee charged to seller and the active community of collectors who immediately compete for any new mispriced offer.

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