A brief quantitative history of NBA Top Shot

The meteoric rise earlier this year of NBA Top Shot, a blockchain-based platform for buying and selling one-of-a-kind basketball highlight videos, was reminiscent of the first digital collectible craze to emerge from the world of cryptocurrency.

When CryptoKitties launched in late 2017, the collectible cartoon cats were an immediate sensation. Within a week of the launch, all the buying, selling, and breeding of CryptoKitties created enough congestion to nearly slow the Ethereum network to a halt. Within a month, the colorful collectibles, which are based on non-fungible tokens (NFTs), made the New York Times.

Just over three years later, Dapper Labs, the team behind CryptoKitties, realized it had another hit on its hands: tradeable highlights from professional basketball games, officially licensed by the National Basketball Association. Soon after launching in the fall of 2020, tens of millions of dollars worth of digital trading cards, called “moments,” were changing hands every week. By January, weekly sales were a cool $224 million. 

Back in 2018, interest in CryptoKitties dissipated nearly as quickly as it had appeared. Likewise, in recent months Top Shot sales volumes have fallen precipitously. But they had a lot further to fall. Last month’s volume was a tenth of the volume at the peak — and it was still $22 million.  

Now, volumes appear to be stabilizing or perhaps even growing once more. 

Can Top Shot stick around in a way that CrypoKitties did not? There is already a huge market for sports trading cards, after all.

Besides that, whereas NFT collectibles were still a niche novelty in 2018, in 2021 they appear to have gone mainstream.

A volatile debut

Top Shot opened to the public in October 2020. By January, the platform was already generating over $40 million in monthly sales. What followed were several weeks of even more eye-popping growth. 

When Dylan Cooper, co-founder of NFT data analytics platform MomentRanks, joined Top Shot earlier this year, it only had a few thousand daily active users. He says the user base exploded almost overnight because moments were cheap and it was easy to make money flipping them. 

“I had friends that weren’t super into blockchain or basketball but were into free money,” Cooper says.

The free money era did not last long, however. Soon “hardcore collectors” willing to pay much heftier sums had elbowed out the casual users looking for cheap moments, says Cooper. 

In April, sales volume dropped from $208 million to $82 million and total users fell to 120,000. By July, volume was just $22 million and the number of users was down to around 50,000. 

Collect ‘em all!

According to MomentRanks, Top Shot has issued 16.5 million moments in total, and the overall transaction size has been about $78. The top account on the platform owns moments valued at nearly $33 million, and 82 users own more than $1 million worth of moments.

There are three tiers of Top Shot moments: Common, Rare, and Legendary. Common moments are the most abundant and are also generally the most affordable with many priced at less than $10. Rare moments are less common and they are all limited-edition. Legendary moments are the rarest and most valuable. Many Rare and Legendary moments have sold for six figures. 

Another thing that differentiates a moment is its “series,” which refers to the season during which it was issued. Series 1 moments are from the 2019-2020 season and Series 2 covers the 2020-2021 season.

To encourage collecting, in late June Top Shot rolled out a “collector score” feature that gives users with high scores — a point value that reflects the various items in a user’s collection, accounting for their tier and  — access to exclusive pack drops as well as bonuses for collecting all the moments in a given set. The collector score is meant to be a point value sum of the moments a user owns, taking into account their tier and series. 

The table below shows the top 10 most expensive moments purchased so far. Los Angeles Lakers forward LeBron James is featured in seven of them.  

NFT collectibles = a thing

Despite the steep declines in volume and users since Top Shot’s peak, it’s still on pace to generate nearly $30 million in sales in August — which would be a small increase relative to July.  

So even though activity on the platform has slowed significantly since it was at its busiest, there are still plenty of money-changing hands.

Perhaps more importantly, there appears to be a large appetite for NFT-based collectibles — at least if the past several weeks are an indication. As rich as Top Shot’s trading volumes are, they’ve been overtaken by other NFT projects including Axie Infinity, CryptoPunks, Art Blocks, and Bored Ape Yacht Club.

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