NBA Player’s Contract Tokenization Plan Can Move Forward: Reports (#GotBitcoin?)
Brooklyn Nets guard Spencer Dinwiddie will be able to tokenize his contract after all. NBA Player’s Contract Tokenization Plan Can Move Forward: Reports (#GotBitcoin?)
First reported by The Athletic, Dinwiddie will issue shares tied to his contract beginning Jan. 13, months after the NBA pushed back on his plan to create a tokenization platform for entertainers to essentially issue debt instruments based on their future earnings.
Dinwiddie announced last year that he would tokenize his three-year, $34.5 million contract on the ethereum blockchain, looking to raise $13.5 million for the first year. Essentially, he’d raise his contract’s value as an upfront lump sum, with token holders receiving payouts throughout the season.
The basketball league said in September that Dinwiddie’s plan was barred under the collective bargaining agreement under which NBA players operate. According to Forbes, the specific point of contention was the potential for Dinwiddie to execute an option on the third year of his contract, promising “significant dividends for investors” if he indeed opted out and signed a higher-paying contract.
Dinwiddie told Forbes that removing this clause and offering a flat bond instead would allow the plan to proceed. Accredited investors will be able to purchase tokens for a minimum $150,000 buy-in, giving him his contract’s value up front.
Paxos Trust Company will provide escrow services and facilitate payouts to token holders using its dollar-pegged PAX stablecoin. Securitize CEO Carlos Domingo said on Twitter Friday that his firm would act as the transfer agent and technology partner for the project.
Spokespeople for Dinwiddie and Paxos did not immediately return CoinDesk’s requests for comment. However, Dinwiddie tweeted Friday that “the Spencer Dinwiddie bond launches January 13th.”
The NBA said in a statement the league was reviewing the modified plan, indicating it may not have actually given Dinwiddie the sign-off to go live on Monday as he intends. A spokesperson did not respond to further questions.
NBA’s Kings Continue Reign Over Crypto-Fan Collab with Live Auction Platform
Though their market is small, their reach is mighty. The National Basketball Association’s (NBA) Sacramento Kings are at it again and will tip off a live auction for gear with a blockchain-based app.
On Jan. 15, the team announced its new live auction platform with blockchain development firm ConsenSys. Starting tonight, fans can bid live on in-game sports gear. The platform reportedly authenticates auction items, patching problems that have long bedeviled gear-hungry fans.
How It Works
Fans anywhere can bid on game-worn gear with the new Kings + Golden 1 Center app. The first garb to hit the virtual block tonight will be Kings guard Buddy Hield’s jersey. Proceeds from the virtual auctions will support various charities. Tonight’s will go to Hurricane Dorian relief effort in the Bahamas.
On The Innovation, Kings Cto Ryan Montoya Said:
“We have integrated blockchain technology into our business across multiple platforms […] now our fans will have the opportunity to securely purchase authentic game-worn merchandise in real-time using an innovative blockchain-based solution.”
A Long Line Of Development
For a while now, Cointelegraph has reported on the Kings crypto-vation. In 2014, the franchise began accepting Bitcoin payment for merchandise. By 2018, it had partnered with a mining firm to fund scholarships. Last fall, the team and a maker of virtual toys launched production of Ethereum-based crypto-collectibles.
In 2016, FastCompany Named The Kings The “Most Innovative Team In Sports.”
U.S. sports memorabilia is a $5.4-billion industry. Yet the industry lacks standards for authentication. Fans consequently can get stuck with counterfeit merchandise. The Kings/ConcenSys partnership leverages the secondary sports gear market and the power of the blockchain to engage fans. Treum Product Architect Constantin Kostenko said:
“We chose to design this specific implementation with a Kings fan in mind […] The Ethereum blockchain technology provides transparency, authenticity, and fraud protection to the fan, but the technical details are hidden to offer a familiar user experience.”
NBA & NFL Believe In Non-Fungible Tokens, But Not Contract Tokenization
Cointelegraph was on the ground for NFT NYC, event taking place a couple of hundred feet from Times Square dedicated to non-fungible tokens.
While most of the companies at NFT NYC are early-stage startups still looking for their users, two attending organizations have hundreds of millions of fans around the world.
Adrienne O’Keeffe, associate vice president of partnerships at the NBA, and Sophie Gage, counsel at the NFL Player’s Association, joined a panel to discuss the value of blockchain technology for big brands. Cointelegraph scored an exclusive interview after their public discussion.
NFTs Will Create Greater Fan Engagement
“This is a new way for fans to connect with our games”, says O’Keeffe. But Gage, who is a lawyer, notices “there is a lot of uncertainty: are these utilities, are these securities?” Panini, who is a giant in the traditional players’ cards market, has issued blockchain-based cards for NFL, MLB, NBA as well as for various soccer teams. “It’s a new area for growth. There is a lot of untapped potential”, observes Gage.
NBA Tried Both Public And Private Blockchains
The NBA has experimented with both public and private blockchains, each with its own pros and cons. Public blockchains allow more freedom and greater engagement at the expense of control. Private blockchains give you greater control, but you trade freedom and engagement for it. O’Keeffe also shared her advice to blockchain entrepreneurs looking to sell their products to the NBA:
“We have met with dozens of companies in the space. They were coming to us with capabilities, not products.”
No Player Contract Tokenization
Many NBA and NFL players are into crypto. Perhaps the boldest venture in the area was Nets player Spencer Dinwiddie trying to tokenize his NBA contract. The NBA eventually shut it down — Gage and O’Keeffe both believe we won’t see contract tokenization anytime soon.
Blockchain A Home-Run In The Sports World — Use Cases Climbing In 2020
The new decade has kicked off with blockchain technology finally being utilized in real case scenarios in the world of sports. Many blockchain proponents are enthusiastic about the wide variety of potential use cases, but real-life working examples are often hard to come by.
The potential of the technology to underpin a variety of systems within the sports sector has long been discussed, but just two months into the new year, there have already been several prominent use cases where blockchain technology is being used to improve offerings to fans.
From the football-mad continent of Europe to the world of the NFL and Major League Baseball, blockchain-based applications are being used to improve ticketing, merchandising and interactions between audiences and sports teams and organizations.
Tickets To The UEFA EURO On Blockchain
Every four years, the best international football teams in Europe battle it out in the UEFA European Championship, more commonly known as the Euros to football fans. The 16th edition of the tournament will be hosted by 12 cities across the continent between June and July. The best 24 teams that progress through the qualifiers will battle it out to be crowned the kings of European football.
Ticketing is one of the most challenging aspects for the tournament’s organizers, with over 28 million ticket requests for the 2020 showpiece across 200 countries.
For the first time ever, UEFA has turned to a blockchain-powered mobile app to provide a contemporary ticketing solution for fans. UEFA aims to supply and deliver 1 million tickets through the Euro 2020 app.
There are some benefits to the app-based ticketing system. Firstly, it will rule out the possibility of replicating tickets. Fans won’t need to visit ticketing offices either, they’ll simply have to turn on WiFi on their smartphones when they arrive at the stadium, which will then activate their ticket QR codes and allow entry. The move also eliminates paper waste.
The primary benefit of an app-based ticketing system is the ease of distribution across the sheer number of countries. Ultimately, UEFA’s move to use blockchain technology to power its ticketing operation is a major boon for the industry. Given that football is the most popular sport in the world, the adoption of the technology could set a trend for other service providers to follow.
Vote On Club Matters With Socios
Blockchain-powered fan engagement platform Socios seems to be setting the tone for adoption in the sporting world. As previously reported, the Socios platform allows sports organizations and teams to launch their own tokens that can be used for a variety of activities on the platform. Users can participate in votes for club decisions as well as use tokens to access content and memorabilia.
The platform has collaborated with a number of the world’s biggest football clubs over the last few years — such as Barcelona, Juventus, Paris-Saint Germain, Galatasaray, Atletico Madrid and A.S. Roma among others.
Socios welcomed Barcelona to its platform in February 2020, just a week before announcing its move into the American sports market. Chiliz, the fintech platform that created Socios, has also teamed up with marketing agency Lagardere Sports and Entertainment.
The agency has a major foothold in the United States, and Chiliz is hoping to onboard a number of new teams and organizations to the Socios platforms through Lagardere. Teams involved in the NFL and Major League Baseball are obvious targets.
Fantasy Football Powered By Digital Trading Cards
A number of football teams have also been licensed in the digital collectibles space in a partnership with blockchain platform Sorare, which was announced in February 2020. The platform offers fans blockchain-based player trading cards that are used to play a five-card fantasy football game. The player cards earn points in relation to their actual player’s performance in real-life games.
Cards are tiered, with the rarest cards guaranteed digital scarcity through blockchain technology. Cards can also be transferred to the Ethereum blockchain. According to the platform’s website, over 38 clubs have been officially licensed.
The Sacramento Kings Lead The Way In Blockchain-Based Offerings
A couple of NBA teams have welcomed the cryptocurrency sector by accepting payments in Bitcoin (BTC) over the past few years.
The Sacramento Kings and the Dallas Mavericks have allowed fans to purchase tickets and merchandise using Bitcoin. The Kings have done so since 2014, while the Mavericks began accepting the cryptocurrency in 2019.
The Sacramento Kings are likely the most innovative blockchain adopters in the sporting world. The organization claims to be one of the world’s most technologically advanced sporting brands.
The Golden 1 Center stadium’s roof is covered in solar panels, boasts ridiculously fast WiFi for fans, and has a cryptocurrency mining operation running in its data center — the proceedings from which are donated to local charities.
If that is not impressive enough, the Kings also offer fans exclusive memorabilia and other items on a couple of blockchain-based platforms. In 2019, they launched crypto-collectibles powered by the Ethereum-based platform CryptoKaiju.
Following that, the Kings unveiled a new offering in January 2020 in collaboration with Consensys that allows fans to bid for in-game sports gear worn by Kings players during live games through a mobile-based app.
There’s a massive market for authentic, in-game items, but the authenticity of auctioned items has always been a pitfall. The app provides a solution to this problem by opening an auction marketplace that provides authentic game-worn items in real-time.
Lancashire Cricket Club Looks To Blockchain For Tech-Savvy Ticketing
Following in the footsteps of UEFA, English county cricket club Lancashire announced that it would begin selling tickets through blockchain-based ticketing platform TIXnGO at the beginning of 2020.
The club will sell tickets to both local and international matches at Old Trafford cricket ground after testing out the platform in 2019. As more supporters have started to buy tickets online, the club is using the blockchain-based platform to combat ticket fraud and improve data on ticket distribution.
The technology also makes it far easier for people to resell or transfer tickets to other supporters. Lancashire’s move is thought to be a first in the world of cricket and can be counted as another sports organization beginning to harness the advantages of blockchain-powered technology.
Actual Use Cases Speak Volumes For Adoption
It is encouraging to see a number of organizations actively using blockchain technology to improve their offerings to sports fans. Whether it’s having access to exclusive content and memorabilia or knowing that the purchased tickets are authentically validated, sport enthusiasts are slowly being introduced to blockchain-based solutions even if they are not aware of it.
Major Brazilian Sports Entrepreneur Tokenizes Soccer Players
André Figer, vice president of one of the largest sporting career management companies in Brazil, has his eyes firmly set on tokenizing soccer players.
The well-known entrepreneur told Cointelegraph Brazil that blockchain technology and athlete tokenization has the potential to transform the management of sport worldwide.
The Figer Group has been involved in many significant moves in the soccer world, including the move by midfielder Giovanni to Barcelona, the purchase of Robinho by Real Madrid as well as the midfielder Júnior Urso for Guangzhou R&F of China.
Tokenization Can Support Younger Players
Figer said he is supporting the launch of a platform named Olecoin that will be focused on encouraging new football players who often abandon their careers due to a lack of financial support.
Citing figures from FIFA, he pointed out that more than 265 million people play football in the world and that Brazil accounts for the largest number of soccer stars in the world. However, he said that while millions of dollars are spent on international player transactions, there are countless talents that get lost “along the way”:
“I believe that [blockchain] is a solution to some pains in the market. We see more and more frequently, parents of players offering their children almost as if at an auction between agents. We need to understand that the desperation on the part of the father and the family in general, in being able to help the son to continue his career, causes this to happen.”
Benefits For Investors And Players
That’s where Olecoin can help. According to the project’s developers, the idea is to create an ecosystem in which micro-investors can, through the acquisition of the player’s token, participate in their future receivables, with small participation for a specific period in their future salaries and marketing contracts. Figer said:
“Initiatives like this project that I am part of can give more chances to these players, because some are really good but due to conditions, just do not have the opportunity. If there is a situation where you have a financial incentive so that this player has the possibility to do training, to have his sporting materials, to have adequate food, transportation to the training place, etc. So, through this platform we were able to generate opportunities for the player. ”
The project was a finalist in the Smart Dubai Global Blockchain Challenge 2019. The player platform is expected to launch in the second half of 2020, with a beta version that has 10 players tokenized.
Cred Partners With NBA Star Spencer Dinwiddie To Promote Crypto Lending
Crypto-based lending and borrowing platform Cred is partnering with professional basketball player and entrepreneur Spencer Dinwiddie. A special page has been launched since March 20 for Dinwiddie’s fans to use Cred.
The platform lets users earn interest on stablecoins and other crypto assets, with the company advertising a 10% annual interest rate. Lending is also possible by collateralizing the user’s crypto assets.
The partnership targets Dinwiddie’s fans to let them earn interest on their stablecoins. Commenting on the announcement, he said:
“This partnership comes at a critical time, where I can educate my fans on the power of cryptocurrencies and blockchain while they earn interest on their digital assets.”
Cred spokesmen emphasized to Cointelegraph that using a partner page is the only way of accessing the platform without a concierge.
According to its website, the funds are used to “lend and transact with a variety of customers, including retail borrowers and money managers with well-established track records.”
The highest interest rates currently offered on Dinwiddie’s dashboard are 6% on Bitcoin (BTC) and 8% on TUSD, if not using Cred’s LBA token. The platform requires locking the assets up for at least six months, though the interest payments are monthly and are delivered either in fiat or cryptocurrency.
Part of the revenue from the initiative will be donated to the Dinwiddie Family Foundation, which provides college scholarships to disadvantaged and at-risk youth.
An Unlikely Duo, Or So It Would Seem
While Dinwiddie’s fame comes from his basketball career, the self-styled “Tech guy with a jumper” has already been strongly involved with blockchain.
As Cointelegraph reported in September 2019, he announced the launch of Dream Fan Shares, a tokenization project based on Ethereum. The project seeks to launch “Professional Athlete Investment Tokens,” which give accredited investors the ability to purchase securities tied to the financial success of the athlete.
The project’s first security should have been Dinwiddie’s contract. The NBA did not approve the transaction, however, and it is unclear if the initiative has moved forward since. The website offers no information on that account.
Looking at Dinwiddie’s Twitter feed, the athlete’s sympathy toward the blockchain and crypto world seems clear.
One tweet in particular focuses on what he believes to be structural issues in the world economy, where the total amount of debt exceeds the amount of wealth. He also recently retweeted Anthony Pompliano and Erik Voorhees, both known for their enthusiasm for Bitcoin (BTC) and crypto.
The partnership with Cred, which may seem strange at first, appears to be a reasonable venture for the NBA player.
The Brooklyn Nets’ Spencer Dinwiddie Makes The Bull Case For Tokenizing Entertainers
Brooklyn Nets guard Spencer Dinwiddie knows how to get to the point when he talks about using cryptocurrency to tokenize his basketball contract.
“When you democratize ownership of a contract, or cash flows, there’s two ways that an entertainer really derives his value, you know, he maximizes talent but also the fan engagement is another way,” he said during CoinDesk’s Consensus: Distributed virtual conference on Monday.
Since late 2019, Dinwiddie has been looking to offer a piece of his future cash flows via a crypto token. The deal he’s looking to set up is not finalized yet.
“It’s ongoing and it’s something I’m really excited about, actually,” he said.
His peers in basketball are starting to ask him questions about his approach as well, especially now that COVID-19 has left them idle.
“I can’t speak for anyone specifically, especially not my teammates – don’t want them to kill me when I get in the locker room,” Dinwiddie quipped, but he did acknowledge a lot of them are curious about what he’s doing.
During the crisis, he said, he sees athletes and other entertainers asking themselves “are there more exotic ways to maximize my earning potential especially while I’m sitting at home? The entrepreneurial mind of a lot of these guys is really starting to flourish during the crisis.”
Tokenize Upon A Star
It was not simple for Dinwiddie to get to the point where he could experiment with his contract in this way, he explained. The NBA itself was reluctant to let him.
“I think when you’re dealing with legacy systems, they covet control, quite frankly,” Dinwiddie said, explaining the reluctance of the NBA to allow him to tokenize his contract, largely because league officials didn’t really understand it. “They’re kind of allowing me to do like this pilot, in a sense, and so that’s why some of the more fun things we wanted to do aren’t included.”
He filed his token sale as a U.S. Securities and Exchange Commission Regulation D offering to put his team “in a position of power” when others began looking into the sale.
“By going with accredited investors first it really lets us focus on the meet of the offering and not worry about if there’s a kid down the street who might get ripped off or, yada yada, big bad basketball player type of thing,” he said.
He sees a larger potential beyond sports.
“Anyone with semi-public to public cash flows and has a fan base can participate,” he said.
For sports, he sees it potentially almost making fantasy sports real, but there’s no way it needs to stop there.
“I envision a world where a Kevin Hart token can trade for a LeBron James token can trade for a Serena Williams token, and because we are all our own business, each token will have its own perks attached to it,” Dinwiddie said. “You know there might be a 5% dividend, there might be future value where it could have a truly asymmetrical yield curve. There could be a utility value, maybe Lebron James offering an exclusive camp only for his token holders.”
“I envision a world where a Kevin Hart token can trade for a LeBron James token can trade for a Serena Williams token.”
How He Got Here
With a Twitter bio now that reads, “Just a tech guy with a jumper,” Dinwiddie did not immediately convert to crypto enthusiasm when he first learned about it.
“When I got into the NBA in 2014, one of my friends in finance told me to start looking at bitcoin and cryptocurrency. I was definitely too scared. I just got into the NBA I wasn’t going to be one of those horror stories,” he said.
“Fast forward to 2017, I actually got a little more solidified in the league, had the very same conversation, he showed me the price difference, so naturally I was curious. I put in small amounts of money and I was fortunate to ride the 2017 wave, and also the crash in 2018. And that pretty much led to an education process.”
He started getting curious about how other technologies beyond bitcoin could lead to new and interesting business models.
“Now we’re here and I’ve been an evangelist for both sides of the tree ever since,” he said.
How And Why Major Stars Are Embracing Tokenization
The next step toward blockchain adoption could be tokenized technological solutions implemented as a financial instrument within the entertainment industry.
Over the last two years, the cryptocurrency industry has gone through a paradigm shift, as developers, projects and users have begun applying blockchain technologies to ever more innovative and intriguing use cases.
Among these, the tokenization of entertainers, sports stars and big personalities stands out as one of the most unusual recent trends because traditional sports, entertainment and modern technologies like blockchain seem like an unlikely pairing. However, the tokenization of sports contracts, intellectual property in sports, stars and players is actually the logical next step in the evolution of blockchain use cases.
What Is Tokenization Exactly?
In a sense, blockchain tokenization is a way of creating a digital representation of a right, using a blockchain ledger (the right can be the ownership of an asset or any type of tradable rights). Similar to the way that stablecoins, like Universal United States Dollar (UPUSD) and Tether (USDT), represent the ownership of one asset worth one U.S. dollar held by Tether somewhere, tokenized rights represent rights in/from systems.
These digital representations of tradable rights, known as tokens, can be easily transferred between individuals just as easily as sending a Bitcoin (BTC) payment, essentially allowing anybody to buy, sell and trade the ownership of practically anything without having to go through any market hosts and the original token issuers. Therefore, they highly reduced the market frictions. Furthermore, tokenized rights can be integrated across systems, allowing limitless integration.
These tokens are generally created through smart contracts on the Ethereum blockchain with different smart contract standards — ERC-20, ERC-721, ERC-875, ERC-1155, ERC-1400, etc. Based on the type of rights being tokenized, token issuers choose different smart contract standards for fungible, nonfungible or semi-fungible tokens.
Nonfungible token smart contracts have been used to tokenize real estate, art, stocks, cars, and more; it is rapidly gaining popularity as a way to bring sports personalities and celebrities closer to their fans, while potentially opening up exciting new avenues for investment and entertainment.
Spencer Dinwiddie Tokenizes His Contract
Perhaps the most prominent example of a tokenized sports contract occurred earlier this year when professional basketball player Spencer Dinwiddie tokenized part of his $34-million contract with the Brooklyn Nets, creating a unique tokenized investment opportunity, which was done on a platform known as Dream Fan Shares.
In essence, Dinwiddie split a chunk of his Brooklyn Nets contract into 90 separate SD8 Professional Athlete Investment Tokens, which can be purchased by accredited investors for $150,000 each. By doing this, Dinwiddie is able to access up to $13.5 million of his three-year, $34.4-million contract upfront, while investors are provided a tokenized bond that pays out 4.95% APR — paid out as a single bullet payment at maturity.
By providing an interest rate of 4.95%, Dinwiddie’s three-year bond pays out far more than most other financial instruments and certainly more than most government or corporate bonds, giving investors the potential to generate lucrative returns, while Dinwiddie can extract money from his contract much faster than otherwise possible.
Dinwiddie is currently the first big name to use the Dream Fan Shares platform to launch his own tokenized debt instrument, but there are plans to launch a similar token for both famous artists and influencers — opening up an even wider range of stars to decentralized investments.
The potential to bring fans and their favorite athletes closer together through tokenized investment models goes well beyond simply securing an attractive interest rate for investors. Imagine being able to contribute to a tokenized sponsorship for an up-and-coming athlete and then later share in his or her success, or even outright own part of a popular team — gaining a say in how it operates and the revenues it brings in.
Potential Use Cases
Tokenization in the sports industry is still very much in its infancy, and the kinks are still being worked out. However, a number of platforms offering tokenization services have begun to crop up, offering more exciting use cases.
Among these, the recently launched Socios platform stands out as one of the most successful examples. Through Socios, sports fans are able to purchase a special type of cryptocurrency, known as Fan Tokens, that confers voting rights to holders, allowing them to help make decisions that affect their favorite sports teams. Holders may also be in a position to benefit from a range of special incentives, such as VIP experiences, meeting the players, guided tours, and more.
Through this system, Socios allows fans to truly feel like a part of the club, but they still don’t benefit from the financial success of the team. Because of this, Socios fan tokens are not considered security tokens. Therefore, you don’t need to be an accredited investor to get involved.
Token Stars takes a completely different approach to celebrities and tokenization. Token Stars bills itself as “the first celebrity management platform on the blockchain,” and that’s exactly what it is. Through the platform, celebrities can host their own initial coin offering, allowing themselves to essentially divide their time into tokenized blocks that can be redeemed for activities like an after-party with fans, Skype shows, one-on-one training, among other things.
The flexibility of this system can be adapted to practically any use case, allowing both stars and their fans to establish what each token represents and how it can be redeemed. It can also be used to tokenize performance, allowing players to bankroll themselves at a tournament like the World Series of Poker. In addition, users have the chance to sponsor their favorite players or teams at prominent events, for example, Major League Gaming, and to earn a chunk of the proceeds if their star or team performs well.
Where Is The Tokenization Industry Headed?
One of the main reasons tokenization has become drastically more popular in recent years is that it has the potential to increase the core value of the rights through increased utility and liquidity. Tokenized rights can be traded on the market with less friction, increasing the liquidity of the rights. Tokenized rights integrate across systems, allowing limitless integration, and increase the utility of the rights.
This allows for the formation of entirely new asset classes that were impractical or simply impossible to create prior to the advent of blockchain technology, potentially unlocking hidden troves of wealth stored in physical possessions; creating new investment models that can be accessed by anybody; and allowing brands to become far more decentralized entities.
The future of the tokenized asset industry is clear. Anybody or anything with significant potential to accrue value over a fixed period has the opportunity to be tokenized and sold over the internet. This could be anything, ranging from celebrities to online personalities, up-and-coming athletes, brands, companies, patents, and just about anything that has an attributed value.
With that in mind, now is the time to lay down the framework that will keep investors safe — enabling everyone to participate in the new token economy without running the same risks that burned many investors during the recent ICO craze.
NBA Player Spencer Dinwiddie’s Token Sale Hits 10% of $13.5M Goal
Brooklyn Nets guard Spencer Dinwiddie fought the NBA for months over his plan to tokenize his $34 million contract. Now, with the NBA’s concerns apparently addressed and the sale closed out, Dinwiddie’s plan hit a different obstacle: investor interest.
Dinwiddie’s issuer SD26 LLC sold just nine of the 90 available tokenized contract shares to eight total investors as of Wednesday, according to CoinDesk’s review of Form D regulatory filings and the security’s token’s issuance history on Etherscan.
With shares priced at $150,000, just $1,350,000 (or one-tenth of the target $13.5 million sale) was sold. Project insiders have previously said the sale would last only until the end of July. It now appears to be closed out for good.
The sluggish sale of an innovative crypto-contract project indicates that Dinwiddie, who has become the NBA’s de-facto crypto hype man, will not succeed in garnering the $13.5 million in tokenization revenue he targeted.
Tritaurian Capital CEO William Heyn, whose firm conducted the sale in coordination with Paxos and Spencer Dinwiddie’s Dream Fan Shares, declined a CoinDesk request for comment. Dinwiddie could not be reached for comment.
Dinwiddie first proposed tokenizing his three-year contract in September 2019. But meeting fierce opposition from the NBA and facing threats that he could see his contract terminated, the point guard retooled and delayed his sale. It launched on Jan. 13, 2020. The sale began in March.
The project was recast as a bond sale that raised the contract’s upfront value and allowed Dinwiddie access to more capital sooner, as a business loan. His shareholders (the token holders) would in turn receive payouts as the season progressed.
But Dinwiddie could not have anticipated that the 2019-20 NBA season would not be completed as planned. Less than two months after he apparently started his tokenization sale, the NBA lurched into a virus-induced hiatus that scrapped most of the regular season. The league is only now preparing to return on July 30 with eight games leading into a modified playoff schedule.
Dinwiddie, who has previously tested positive for the coronavirus, will not be there for the Nets’ final push. He has opted out of the remainder of the NBA season.
Still, the global pandemic did not completely derail Dinwiddie’s contract sale. His first sales came during the NBA hiatus, on July 10, according to Form D filings. Etherscan records of the SD26 tokens reveal that nine tokens were sent to eight different addresses on July 12.
NBA’s Spencer Dinwiddie, Andre Iguodala And More Join Dapper Labs $12M Funding Round
Dapper Labs has closed a $12 million funding round led by National Basketball Association (NBA) stars Spencer Dinwiddie, Andre Iguodala, JaVale McGee, Aaron Gordon and Garrett Temple, according to a press release shared with CoinDesk.
The funds will be used for further development of blockchain games including the eventual launch of NBA Top Shot out of private beta, Dapper Labs founder and CEO Roham Gharegozlou told CoinDesk in a phone interview.
“Sports are our most important vertical now,” Gharegozlou said.
NBA Top Shot runs on the developer’s custom Flow blockchain. The firm pivoted off the Ethereum blockchain due to scalability concerns following the 2017 CryptoKitties debacle.
The round was also joined by new venture capital firms such as Coinbase Ventures and existing partners Union Square Ventures and Andreessen Horowitz (a16z) Cultural Leadership Fund – the offshoot’s first investment – among others.
Dapper Labs has raised $51 million to date in seven rounds, according to Crunchbase.
NBA Top Shot
As first reported by The Block, NBA Top Shot broke $1.2 million in revenue three months after Beta trial launch. The app allows basketball fans to purchase officially licensed digital tokens of NBA player rosters similar to a trading-card game.
“Flow can create the vehicle for consumers to enter the space through products like NBA Top Shot where they have fun, but at the same time create a new self-sovereignty,” Dinwiddie said in a statement.
NBA players like Dinwiddie and McGee are not unfamiliar with cryptocurrency investments. Dinwiddie experimented with tokenizing his NBA contract on the Ethereum blockchain while McGee was an early investor in bitcoin, according to Gharegozlou.
Iguodala has found some success as a fintech investor as well; he recognized Zoom’s potential long before it became a pandemic business staple.
“Blockchain technology has the potential to revolutionize consumer ownership on the internet,” Iguodala said in a statement. “Projects like Dapper Labs’ Flow are already driving consumer adoption, with NBA Top Shot proving the experience is not only engaging, but smooth and fan-friendly.”
Leading Brazilian Soccer Team To Tokenize FIFA Player Transfer Fees
Brazilian soccer club CR Vasco da Gama and crypto exchange Mercado Bitcoin are looking to tokenize early-career transfers in the soccer world.
Vasco da Gama, one of the leading teams in Brazilian football, and Mercado Bitcoin, one of the largest cryptocurrency exchanges in Latin America, have announced plans to tokenize the rights of the solidarity mechanism of FIFA.
The FIFA Solidarity Mechanism is a part of the FIFA Transfer Regulation, which acts as a selling right for a player and encourages clubs to develop young players.
Through this mechanism, up to 5% of the total value of each international transfer of an athlete can be shared with all the clubs that an athlete went through during his career until he was 23 years old.
Through this partnership, Vasco and Mercado Bitcoin will tokenize the solidarity mechanism, and holders of the tokens will be entitled to a percentage of the sale value of any player to the athlete’s forming club.
According to information that Mercado Bitcoin provided to Cointelegraph, in total there will be 500,000 tokens, which they hope to sell for a total of R$50 million (around US$ 9 million).
Each token will correspond to a fraction of the solidarity mechanism rights of 12 athletes who joined Vasco da Gama’s youth teams, among them football stars like Philippe Coutinho, Douglas Luiz, Alex Teixeira, and Allan Marques Loureiro, each of them successful in other prominent teams in Europe and Asia.
“We are a club that has traditionally developed great players. Many important Brazilian players emerged in São Januário”, said Alexandre Campello, Vasco’s president, citing the club’s headquarters.
According to Campello, the club has been looking for opportunities to use cryptocurrencies to generate new revenue since 2018. He explained:
“This initiative is part of the strategic planning actions implemented by the current management, with a strong commitment from the financial, legal and football departments, and with the financial assistance of KPMG.”
To achieve its goals, Vasco is also a partner of MBDA, a company in the Mercado Bitcoin ecosystem responsible for the tokenization of several alternative assets. The club has also worked with renowned lawyers specialized in matters related to football, digital currencies and securities regulation.
Also according to the announcement, the team formally consulted with the Brazilian Securities and Exchange Commission to confirm the understanding that the token is not classified as a security.
In addition to making the token available on its platform, Mercado Bitcoin has already guaranteed the pre-purchase of 20% of the 500,000 tokens, whose sale will be credited to Vasco da Gama before the opening of the sales for the average investor.
“This is a token that should change the way football deals with FIFA’s solidarity mechanism. Vasco is the first club in the world to have this token, but we want other clubs to have access to it,” says Reinaldo Rabelo, CEO of the Mercado Bitcoin. “We are confident that we are creating a new source of revenue for football clubs.”
launched his ownSoccer is at the forefront of sports embracing tokenization. Weeks ago, Japanese soccer star Keisuke Honda launched his own fan-engagement crypto.
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